4 Ps of Marketing Mix: Elements and Sub-Elements

Everything you need to know about 4 P’s of marketing mix. The elements of marketing mix are popularly known as 4Ps of Marketing.

The social marketing “product” is not necessarily a physical offering. A continuum of products exists, ranging from tangible, physical products (e.g., condoms), to services (e.g., medical exams), practices (e.g., breastfeeding, ORT or eating a heart-healthy diet) and finally, more intangible ideas (e.g., environmental protection).

Place decision or distribution decisions are concerned with decisions relating to the smooth flow of goods from the producer to consumer and thereby create time, place and possession utilities. Place decision include channel of distribution decision and physical distribution decisions.

The combination of different ‘price related variables’ chosen by a firm to fix the price of its product is called price mix.

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Promotion is the fourth important element of marketing mix and hence a part of marketing mix strategy. Promotion is that activity which deals with the responsibility of informing and persuading the customers about the product and creating an image about the product in the minds of the customers.

Learn about 4 Ps of Marketing Mix:- 1. Product 2. Place 3. Price 4. Promotion.

4 Ps of Marketing Mix: Product, Price, Place and Promotion

4 Ps of Marketing Mix – Product, Place, Price and Promotion with Various Sub-Elements

Element # 1. Product:

Product is an important component of marketing mix without which there would be no business. A product can be anything. It can be an object, an organization, service, place, idea or people. It is not only the tangible product that we see but also the benefits and services that are associated with it.

When a customers buys a product it is the want satisfying attribute or benefit or warranty of services that he buys and not only the tangible product. Great care, therefore, needs to be taken to manage the product. Managing the product includes planning and developing the right product, product line, product range, branding, labelling packaging, new product development, guarantees, service etc.

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Thus, an organization should develop the product in the light of various factors like needs and wants of the target customers, their buying behaviours, age, income, taste, values, competitive conditions, trade practices, legal considerations etc.

Various sub-elements of product are:

i. Product Features:

Decisions relating to product features include incorporating those features in the product which are required by the target customer. It includes the benefits which the customer seeks from the product.

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ii. Product Quality:

It is very important for the manufacture to see that the product confirms to quality standards specified. Control of quality standard is a basic requirement. Different quality standards are established for different type of products by the law or manufacture themselves.

iii. Product Design:

Product design is an important marketing decision, which helps in increasing sales. Good design helps in value additions to the product, by way of attractiveness, convenience, utility and safety.

iv. Product Variety:

Customers are no longer satisfied with the same product for a long time howsoever good it may be. The present day customer wants variety in the products that are offered to them. Newness in the product is a must to satisfy the customer these days.

v. Product Size:

Availability of the product in various sizes not only suits the different requirements of different target groups but also the varying requirements of an individual customer at different points of time.

vi. Branding:

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A brand is name, term, symbol, sign, mark or a combination of these used to identify the products of the firm and differentiate it from competing brand. The managerial process of giving a brand name to a product is called branding. It is essential for the marketer to brand his product because it is the brand name which the market buys today and not only a simple product. Brands are often used as proxy for quality and dependability.

vii. Labelling:

Labelling is an important component of product decision. It is a silent informer, and also works a promotional tool. It provides the customer, with every detail about the product like composition of the product, net contents, benefits, how to use it properly and safety, how to preserve it, expiry date etc. As a promotional tool, it carries attractive graphics and design, strong and deep colours etc. to attract the customers.

viii. Packaging:

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Packaging refers to the activities of providing a wrappers or container for a product. It protects the products, so that it can travel safely through the channels of distribution from producers to the consumers and can also be stored easily. It also helps in preserving the freshness and quality of the product.

Further, it serves as a marketing tool and helps in promoting the product. Attractive package design, colours, shapes, materials, etc. cast a distinct image about the product in the minds of the consumers.

ix. After Sale Service, Guarantees and Warranties:

Increasing industrialization has resulted in more use of electronic gadgets appliances, machinery etc. all of which require after-sale services. Guarantees, warrantees, repairs, spare parts etc. increase the value of the product. Better are the after-sale services, better is the response of the customers towards the product.

Element # 2. Place:

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Various sub-elements of place are:

i. Transportation:

Transportation as a component of physical distribution is very essential for the firm as it increases the market for the product. Decisions relating to transportation includes choice of mode of transport to be used, whether to own vehicles or hire them, how to schedule deliveries, who will bear the transport cost from manufactures to wholesaler and them to retailer.

Different modes of transport are there vis. Roadways, Railways, Waterways, Airways, and Pipelines. Normally a combination of these modes is chosen by the company. It is important to note here that choice of particular mode of transport affects the condition of the goods and its pricing which ultimately affects customers satisfaction.

ii. Warehousing:

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Warehousing provides storage function to the firm and thereby creates time utility. The long-time gap between production and distribution, seasonal production of certain commodities continuous demand for the products and such other factors have made it necessary for the firm to store its products. Warehousing decisions mainly include decisions relating to choice of public or private warehouse or cold storages, and number of places where goods have to be stored to be released quickly in time of demand.

iii. Inventory Level:

It is very necessary for a firm to carry enough stock of goods to meet the demand as and when required. It involves decisions as to how much to stock, who long to stock and at how many places to stock.

Since inventory has a cost and can affect the whole business, decisions regarding it should be taken very carefully. Inventory decisions are taken in light of various factors such as mode of transportation, location of warehouse, communication facilities available etc.

iv. Channel Level and Intermediaries:

Marketing channels are characterized by different channel levels. Depending upon the number of intermediaries, there can be different channel levels viz. direct marketing where manufactures sells directly to the consumers, one level channel where goods are sold through one intermediary and so on. Firm has to also decide the number and type of intermediaries to be employed.

Element # 3. Price:

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Pricing hold a key place in every organization as it facilitates transactions by providing a medium of exchange. It is a revenue generating element of marketing mix. A right product at right place with effective communication cannot make a sale possible unless it is suitably priced. Growth and survival, prosperity and profitability, image of the brand and of the firm to a great extent are influenced by the price.

The decisions regarding price are influenced by a number of factors such as production cost, demand and supply, nature and type of competition, government rules and regulations, product, promotion, channels, of distribution etc.

The various sub-elements of pricing are:

i. Pricing Policies and Strategies:

Pricing policies and strategies provide the guidelines and framework within which the firm can determine its price. Varying pricing policies are there like one price policy, flexible price policy, skimming price policy, penetration price policy, full-line pricing policy, psychological pricing, uniform pricing, zonal pricing etc.

ii. Target Customers and Competition:

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Pricing is affected by the selection of the target market by the firm. The capacity of target customers to buy the goods at varying prices influences pricing decision. The number of competitors and degree of competition also forces the firm to charge a lower price.

iii. Government Rules and Regulations and Social Responsibility:

Number of restrictions are imposed by the government on pricing activities. Public enterprises base their pricing policies on the directives of the government. Welfare of the society is important for price determination. Society’s short term and long term interest has to be protected and promoted.

iv. Terms of Delivery:

Timely delivery of the goods to the intermediaries is very significant. The various terms and condition in this regard like the quantity of goods to be delivered, time of delivery, place and condition of delivery should be decided in explicit terms. The policy of the firm in this regard should be clear.

v. Terms and Credit:

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Credit is the base of the business activities these days. No firm can think of marketing its products purely on cash basis. Credit not only helps in greater sales but also in expansion of market. In other words it is a tool of sales promotion. However it should be maintained at proper level. Most of the goods are sold under hire-purchase system and instalment method by the manufacturer under indirect channel system.

Credit is granted by manufacturer to wholesaler, from wholesaler to retailer and from retailer to final consumer. The credit level has to be decided by the firm after taking into account various factors like nature of the product, position of the customers, competitor’s terms and condition and credit facilities available through banks and financial institutions.

vi. Margin:

The difference between the actual price paid by the consumers and the total cost of the product is the margin. Margins are set for manufactures, wholesaler and retailers. The level of margin for the intermediary depends much on the nature of product. Industrial products have higher margin levels as they require more services and maintenance whereas consumer goods have low margin levels as they are used on mass scale.

Element # 4. Promotion:

A well designed product which has been priced attractively and made accessible to the target customers will not be sufficient to ensure success for the firm unless the firm communicates effectively to the customers that product is available at the right place and at right price and has certain specific advantages and benefits.

Various sub-elements of promotion are:

i. Advertising:

Advertising is a very popular method of promotion. It is a paid form of non- personal presentation of goods, ideas or facts to the consumer by an identified sponsor. This non-personal presentation is made through different media like print media, electronic media, etc. Newspapers, magazines, radio, television, cinemas, leaflets, poster, billboards, direct advertising, etc. are important medium of advertising.

Advertising decisions include decision relating to determination of advertising objective, advertising media, advertising theme, advertising appeal, advertising budget, advertising agencies, advertising copy and layout and measuring advertising effectiveness.

ii. Personal Selling:

Personal selling can be described as the oral presentation of the goods to one or more prospective buyers for the purpose of selling the goods. Mostly used for industrial marketing it is a very distinctive form of promotion as it involves a personal contact resulting in two-way communication.

It is based on persuading the customer rather than pressurizing him to buy the product. It is very flexible and adaptable method as the seller has the opportunity to adjust his sales, talks, as per the changing needs and desire of the customer. At the same time salesman gets the required feedback from the customers. However, it is an expensive method of promotion.

iii. Sales Promotion:

Sales promotion refers to short-term incentives offered to encourage the sale of goods and service. It refers to all inducements offered at the place and time of purchase, such as coupons, premium, contest, free goods, discount, gifts etc. Though it is an effective tool of promotion it is supplementary to advertising and personal selling.

iv. Public Relations:

Public relation is a planned and serious effort on the part of the organization to develop and maintain understanding and good relations between the firm and public consisting of its prospective customers. It is an attempt by the firm to raise its goodwill amongst its customer, shareholder, employees, government, general public and society. Different programmes like opinion, research, literature, films, conference, tours etc. are conducted to develop public relations.

v. Trade Fairs and Exhibitions:

Trade fairs and exhibitions occupy a significant place as an element of promotion mix these days. They bring with them the advantages of having the buyers and seller face to face i.e. personal contact between the two parties is there. Proper planning with regard to location of trade fairs and exhibitions, their size, demonstration and display arrangements, sales staff etc. has to be made to make it successful.

Development of marketing mix is a crucial task before marketing managers. It is beneficial to the firms in many ways. An appropriate marketing mix helps in proper allocation of limited resources of the firm, helps in maximizing profits and customer’s satisfaction. The requirements of customers are different and therefore different combinations of various elements and sub-elements of marketing mix help the firm in having a consumer oriented marketing. Different needs of the customers can be satisfied in alternative ways.

4 Ps of Marketing Mix – With Factors: Product, Price, Physical Distribution and Promotion

1. Product:

As the name suggests it means the product which is available for purchase or the product offered for sale. The important fact in this context is meaning of the word “Product” which includes physical object or service or even an idea. The decisions related to (i) quality, (ii) design, (iii) size, (iv) branding, (v) packing, (vi) warranties, (vii) sales service, etc. are included in product mix.

This element makes sure that good quality products are offered for sale in market. The products should have distinct identity and should stand apart from the rest. Simple but catchy brand name and attractive ‘n’ easy to handle convenient packing can help brand name to gain popularity. Goods packing must be protective as well as economical. If these things along with after sales services are provided, it really help the products sale gain momentum.

2. Price:

In order to buy any product, or to get any service one has to pay the price. This is a fundamental rule of business. In order to achieve maximum profits one may price goods highly but with high prices, the demand decreases and thus the goal is not achieved. Thus we see that pricing the product helps in the product becoming popular and favourite among consumers. The price should be cost effective i.e., directly related to the utility derived from the product. Let’s see the factors determining the price of any product or service or an idea.

(i) The Cost of Production:

The price should cove all manufacturing, administration and selling expenses. The cost should also include profits.

(ii) Demand:

If the demand is high and supply low, the price charged could be high and vice versa. Demand has to be assessed accurately before setting the price.

(iii) Objectives:

If the objectives of firm or concern are to capture market it may price the goods low as compared to the concern whose objective is to earn maximum profits.

(iv) External Factors:

The prices of other goods which are similar in utility also affect the price of product. Government policies also affect the price. The goods in fashion are charged more than goods out of fashion.

All these factors help in taking decisions related to price of the goods or service or the idea.

3. Place (Physical Distribution):

No doubt if the quality of goods is spectacular, the price is cost effective but if the product is not easily available, the product wouldn’t be sold. Usually what happens is the producers do not sell their products directly to consumers but the job is done through a proper channel of wholesalers, retailers and several other agents. Proper channel through which the product is to be sold and where and when is to be decided in this element of marketing mix.

The relevant factors which help in making a choice of channels of distribution are:

(a) Nature of Product:

If the product is perishable, it requires maximum agents in its way to reach the final consumers. If the product is very technical and costly then there may be direct purchases from producers by consumers, say in field of aeroplanes, ships etc.

(b) Comparative Costs Offered:

It may be that manufacturers use the same channel as other competitors but offer comparatively low cost so that their product sells more.

(c) Cost to be Paid:

The channel requiring minimum payment and maximum coverage is ideal for any business concern.

(d) Government Regulations:

Government may put some regulations in using a channel for some product. Say, if wine’s advertisements are banned on radio or more agents for wine supply are not given permission in city. Then manufacturers will have to look for a new channel.

(e) Producer’s Financial Resources:

There established producers who may have their own showrooms to sell their products. Vimal, Raymond’s, etc. have their own showrooms in the heart of big cities.

4. Promotion:

Until and unless goods are properly promoted and people are made aware of the product and services, the goods won’t be sold. An appropriate combination of various promotional tools is required for effective promotion of products. This depends upon the scale i.e., the budget and the various tools and their costs. Many factors influence the choice of tools as type of product, the target market and so on.

The four tools or elements of this “P” i.e., Promotion Mix are as follows:

(i) Publicity

(ii) Sales Promotion

(iii) Advertising

(iv) Personal Selling.

Let’s discuss each of these tools individually.

(i) Publicity:

This type of promotion mix has a peculiar feature that this is not a paid form. Actually speaking, publicity refers to the mention of company/product in any published or non-published media. For instance, a new product is launched, and due to some or the other feature which is not a part of other goods of same category, the product may become a point of discussion among various groups.

This mention adds to the promotion and hence, the product gets publicized. This publicity is mainly due to good response from customers, or due to quality or can be even due to some controversies. Anyway, these publicities form a crucial part of promotion mix. If a product is able to draw a lot of attention by mention in journal and market circles, company need not spend more on advertising the product.

(ii) Sales Promotion:

“Sales promotion includes those marketing activities, other than personal selling, advertising and publicity, that stimulate consumer purchasing and dealer effectiveness such as displays, shows and expositions, demonstrations and various non-recurrent selling efforts not in the ordinary routine.” American Marketing Association.

Sales promotion includes activities as distribution of free samples, premium on sales, fairs, exhibitions, dealer incentives, fashion shows, etc.

A point which requires a mention here is that sales promotion is different from advertising (which is done through media, owned and controlled by others); personal selling (face to face selling) and publicity (which are non-paid form).

4 Ps of Marketing Mix – Additional Marketing P’s: Partnership and Policy

Element # 1. Product:

In order to have a viable product, people must first perceive that they have a genuine problem, and that the product offering is a good solution for that problem. The role of research here is to discover the consumers’ perceptions of the problem and the product, and to determine how important they feel it is to take action against the problem.

Element # 2. Price:

“Price” refers to “what the consumer must do in order to obtain the social marketing product. This cost may be monetary, or it may instead require the consumer to give up intangibles, such as time or effort, or to risk embarrassment and disapproval. If the costs outweigh the benefits for an individual, the perceived value of the offering will be low and it will be unlikely to be adopted.

However, if the benefits are perceived as greater than their costs, chances of trial and adoption of the product is much greater. In setting the price, particularly for a physical product, such as contraceptives, there are many issues to consider. If the product is priced too low, or provided free of charge, the consumer may perceive it as being low in quality. On the other hand, if the price is too high, some will not be able to afford it.

Social marketers must balance these considerations, and often end up charging at least a nominal fee to increase perceptions of quality and to confer a sense of “dignity” to the transaction. These perceptions of costs and benefits can be determined through research, and used in positioning the product.

Element # 3. Place:

“Place” describes the way that the product reaches the consumer. For a tangible product, this refers to the distribution system – including the warehouse, trucks, sales force, retail outlets where it is sold, or places where it is given out for free. For an intangible product, place is less clear-cut, but refers to decisions about the channels through which consumers are reached with information or training. This may include doctors’ offices, shopping malls, mass media vehicles or in-home demonstrations.

Another element of place is deciding how to ensure accessibility of the offering and quality of the service delivery. By determining the activities and habits of the target audience, as well as their experience and satisfaction with the existing delivery system, researchers can pinpoint the most ideal means of distribution for the offering.

Element # 4. Promotion:

Finally, the last “P” is promotion. Because of its visibility, this element is often mistakenly thought of as comprising the whole of social marketing. Promotion consists of the integrated use of advertising, public relations, promotions, media advocacy, personal selling and entertainment vehicles. The focus is on creating and sustaining demand for the product.

Public service announcements or paid ads are one way, but there are other methods such as coupons, media events, editorials, “Tupperware”- style parties or in-store displays. Research is crucial to determine the most effective and efficient vehicles to reach the target audience and increase demand. The primary research findings themselves can also be used to gain publicity for the program at media events and in news stories.

Additional Marketing “P‘s”:

1. Partnership – Social and health issues are often so complex that one agency can’t make a dent by itself. You need to team up with other organizations in the community to really be effective. You need to figure out which organizations have similar goals to yours – not necessarily the same goals – and identify ways you can work together.

2. Policy – Social marketing programs can do well in motivating individual behavior change, but that is difficult to sustain unless the environment they’re in supports that change in the long run. Often, policy change is needed, and media advocacy programs can be an effective complement to a social marketing program.

The issues addressed by social marketing programs are often controversial or complex, such as safer sex or violence, and may need some political diplomacy with community organizations to gain support, to get access to the target audience or to head off potential adversaries at the pass.

As an example, the marketing-mix strategy for a breast cancer screening campaign for older women might include the following elements:

The product could be any of these three behaviors – getting an annual mammogram, seeing a physician each year for a breast exam and performing monthly breast self-exams. The price of engaging in these behaviors includes the monetary costs of the mammogram and exam, potential discomfort and/or embarrassment, time and even the possibility of actually finding a lump.

The place that these medical and educational services are offered might be a mobile van, local hospitals, clinics and worksites, depending upon the needs of the target audience. Promotion could be done through public service announcements, billboards, mass mailings, media events and community outreach.

Partnerships could be cultivated with local or national women’s groups, corporate sponsors, medical organizations, and service clubs or media outlets. The policy aspects of the campaign might focus on increasing access to mammograms through lower costs, requiring insurance and Medicaid coverage of mammograms or increasing federal funding for breast cancer research.

Politically, the groups you would want “on your side” in the campaign would depend upon the way you frame the campaign. Some possible allies to cultivate are physicians, insurance companies, women’s health organizations, or the American Cancer Society. Each element of the marketing mix should be taken into consideration as the program is developed, for they are the core of the marketing effort. Research is used to elucidate and shape the final product, price, place, promotion and related decisions.

4Ps of Marketing Mix – Product, Price, Place and Promotion Mix: With Types

The elements of marketing mix are popularly known as 4Ps of Marketing.

They are:

1. Product (Mix)

2. Price (Mix)

3. Place (Mix)

4. Promotion (Mix)

1. Product (Mix):

The combination of different ‘product related variables’ chosen by a firm to produce its product is called Product Mix.

Product related variables include the features of product, quality, packaging, labelling and branding.

Goods or services or ‘anything of value’ which is offered to the market for sale are called Product. Example-Tooth paste, Soap etc.

Types of Products:

Consumer product- Goods which are purchased by the ultimate consumers for personal needs. Example- Soap, toothpaste, textile etc.

Industrial products-Goods used as inputs in producing other products Example: raw materials, toots etc.

2. Price (Mix):

The combination of different ‘price related variables’ chosen by a firm to fix the price of its product is called Price Mix.

Price related variables include pricing objectives, cost of product, competitor’s price, profit margin etc.

Price is the amount of money customers have to pay to obtain the product. Pricing occupies an important place in the marketing of goods and services by a firm.

Pricing is considered to be an effective competitive weapon.

3. Place (Mix)/ Physical Distribution (Mix):

The combination of different ‘place (physical distribution) related variables’ chosen by a firm to make its products available to the target customers is called Place Mix.

Place related variables include the channel of distribution, place of production and consumption, storage and warehousing, transportation etc.

Place or Physical distribution include activities those make a firm’s products available to the target customers.

Physical Distribution includes all the activities required to physically move goods from manufacturers to the customers.

There are two important decisions relating to Physical Distribution:

a. Physical movement of goods from producers to consumers.

b. Regarding the channels of distribution to be selected.

4. Promotion (Mix):

The combination of different ‘promotional variables’ chosen by a firm to persuade the customers to buy the product is called Promotion Mix.

Promotional variables include advertising, personal selling, sales promotion and public relation.

Promotion is the process of informing the customers about the products and persuading them to buy the product.

Various tools of communication are used by the marketers to inform and persuade customers about the products.

These Include:

(i) Advertising

(ii) Personal Selling

(iii) Sales Promotion

(iv) Public Relation.

4 Ps of Marketing Mix – Additional 4 Ps: Packaging, Processes, People and Physical Evidence

Four more “Ps” are now added to enlarge the horizon of marketing.

They are:

1. Packaging

2. Processes and

3. People

4. Physical evidence

1. Packaging:

Packaging of consumer goods play an important role in marketing plan. Packaging refers to, the wrapping and carting of the goods before they are delivered to the customer. Before the goods are dispatched to the customer, they are placed in suitable small packages.

Advantages of Packing:

i. It protects goods against possible damages

ii. It helps in keeping goods pure and clean

iii. Proper packages enable uniformity in the size of goods

iv. Brands are usually promoted through good packaging. E.g. tea, coffee etc. cannot be branded unless they are put into suitable packages

v. Packaged goods can be handled easily

vi. Goods which are packed properly creates faith in the minds of people in terms of quality and quantity

vii. A good package attracts customers. Therefore, good package would help the organization to increase sales volume

2. Process:

Process refers to the system by which the customer receives delivery of the services. For example, in a fast food restaurant the process consists of buying coupons at one counter and packing the food against coupons at another counter. In service the process mainly involves adding value or utility for customer. Activities should be arranged in a logical and sequential form.

Following are the steps involved in process:

i. Identify the steps involved in delivering the service to the customer.

ii. Arrange the steps in the most logical and proper sequence

iii. Minimize the customer’s contact in the process

iv. Using automation to speed up the delivery process

3. People:

Person rendering service play vital role in the marketing of services. Their attitudes and behaviour exercise a major influence on the customer’s perception of the service and the company. Persons involved in the process should ensure complete consumer satisfaction.

Wherever possible automation and computerization should be used to reduce the need for personal contact. Careful selection and training, neat and consistent appearance of service personnel are necessary. In addition rules and norms can be laid down to ensure consistent behaviour.

4. Physical Evidence:

Tangible elements in a service play a significant role in influencing the image of the service in the minds of customers. For example, seating arrangements and interior decoration of the theatre are physical evidence. Essential physical evidence can be used to build a strong image and to differentiate the services from those of the competitors.

Coca-Cola considers marketing mix as the artistic balance of seven ingredients- (i) Product, (ii) Price, (iii) Promotion, (iv) Place, (v) Potential, (vi) Penetration, and (vii) Profit. These seven ‘P’s of marketing can easily assure quality, availability, satisfaction, brand equity and repeat purchases.

Marketing management has to perform the following chief functions of marketing:

(a) Knowledge of demand, i.e., customer needs unmet so far, and how the demand can be developed.

(b) Obtaining demand i.e., getting orders,

(d) Ensuring satisfaction of customer needs, i.e., aiming at new and/or repeat business.

Marketing management cycle involves:

a. Determination of the present and potential customer through marketing research,

b. Formulation of the marketing plan and policy,

c. Development of product and its adaptation to specific customer needs through product planning and development.

d. Channel choice and channel management,

e. Physical distribution arrangement,

f. Generation and stimulation of demand through all devices of promotion,

g. Determination of selling prices and discounts,

h. Selling activities i.e., personal selling, contract negotiation, payment provisions,

i. After-sales activities,

j. Feedback of information from the market on post-sale reactions and usage,

k. Re-planning on the basis of feedback information from the environment and the market.