Select your language

Suggested languages for you:
Log In Start studying!
StudySmarter - The all-in-one study app.
4.8 • +11k Ratings
More than 3 Million Downloads
Free
|
|

All-in-one learning app

  • Flashcards
  • NotesNotes
  • ExplanationsExplanations
  • Study Planner
  • Textbook solutions
Start studying

Marketing Mix

Save Save
Print Print
Edit Edit
Sign up to use all features for free. Sign up now
Business Studies

What is one of the most commonly used marketing tools? The marketing mix! The marketing mix can be applied to all types of products and services and it encompasses all key aspects of selling them. Let's explore how it can provide a basis for marketing strategy.

Marketing mix elements

The marketing mix is a set of marketing tools employed by a company to promote its products or services in the market. It includes the 4Ps which stand for Product, Price, Place, and Promotion. In simple terms, the marketing mix helps businesses deliver the right product in the right place, at the right price, and at the right time.

The concept of marketing mix revolves around the 4Ps — Product, Price, Place, and Promotion.

The 4Ps of Marketing Mix, Studysmarter.deThe 4Ps of Marketing Mix. StudySmarter

Product

The Product is a good or service a company produces that also satisfies the customer’s needs and wants.

Product decisions have to be made by marketers before producing and distributing a product.

Important product decisions

  • Analysing the value of the product portfolio.

  • Determining the position of the product on the product life cycle.

  • Evaluating the influences and importance of new product development.

Find out more in Product Decisions!

Price

Price is the amount set for the sale of a product. It is also described as the customer’s sacrifice of time and money to acquire a product.

To set a fair price, marketers should match the product’s real value with its perceived value by the market. They also need to take into account the supply costs, competitors’ prices, and the customer’s willingness to pay.

Common pricing strategies include:

Price skimming

The price strategy where the company starts with a high price then lowers it over time. The idea is to increase the product’s perceived value and generate higher profit margins. (Learn more at Price Skimming.)

Price penetration

The price strategy where the company starts with a lower price, then increases it over time to attract price-conscious individuals. (Learn more at Price Penetration.)

Place

Place is the distribution method or location the company uses to get access to the right customers.

Companies can distribute their products directly through their own stores, websites, e-commerce platforms, mail order, or door-to-door. For wider distribution, they can reach out to a third party like a retailer or wholesaler who then resells the products to customers.

Another aspect of place is market coverage which refers to how far and wide a company wants to distribute its product or service.

There are three types of market coverage:

  • Intensive distribution.

  • Selective distribution.

  • Exclusive distribution.

Learn more about this in Distribution Decisions.

Promotion

Promotion is the set of activities that raises awareness about a product and gets it sold to the right customers.

Companies can adopt various promotional tactics, both direct and indirect, to capture the audience’s attention.

The five most common types of promotion are:

  • Personal selling.

  • Advertising.

  • PR.

  • Direct marketing.

  • Sales promotion.

Find out more in Promotional Decisions!

Marketing mix examples

To see the marketing mix in action, let’s consider the example of Starbucks, one of the most prestigious coffee brands in the world.

Marketing Mix, Starbucks example, StudySmarterExample Marketing Mix - Starbucks. StudySmarter

An integrated marketing mix

An integrated marketing mix combines and harmonises different elements of the marketing mix.

Here’s an example to help you understand this better.

Low-price airline brands offer affordable tickets targeting price-conscious individuals (pricing). There are also numerous promotional campaigns with deep discounts to encourage more travel (promotion). The service is also kept at the essential to avoid the extra costs (product). Customers can book the ticket directly from the airline’s website or travel agents; the latter tend to provide a lot of money-saving deals (place).

All elements of an integrated marketing mix blend in well with one another to provide the customer with an enticing offer. From the company’s perspective, it also helps with planning and executing the marketing strategy properly to maximise the financial gains. Furthermore, an integrated marketing mix ensures harmonious cooperation between different departments within the company such as production, research and development, accounting, and marketing.

Of all elements of the marketing mix, the product is believed to be the most important as, if a product doesn’t meet the customer’s need, it doesn’t matter if the company has the best price, promotional campaigns, or location in town.

Influences on an integrated marketing mix

It is important to understand the various factors that impact a marketing mix. These include:

The position on the product life cycle

A product life cycle is the amount of time that a product exists on the market, from the moment it is introduced to the end of life. There are four stages in a product life cycle: Introduction, Growth, Maturity, and Decline. Knowing where it is on the product life cycle can help the business to implement the right marketing strategy at the right time.

Marketing Mix graphing the Product Life Cycle StudySmarterThe Product Life Cycle Model. StudySmarter

The Boston Matrix

This is the model that allows a business to develop its product portfolio and branding. The matrix includes 4 categories of products: Dogs, Stars, Cash Cows, and Question Marks.

Marketing Mix the Boston Matrix, StudySmarterThe Boston Matrix. StudySmarter

Product marketing

Product marketing is a business function that bridges the gap between product management and communications. It is the foundation for an integrated marketing mix to be formed.

Marketing objectives

Without an overall marketing objective, no decisions can be made about the product as well as its pricing, promotion, and distribution.

The target market

The understanding of the customer’s needs and wants is crucial to designing an effective marketing mix. Many businesses nowadays direct different products in their product portfolio to different customer segments to maximise revenues.

Competition

The level of competition in the market can determine a company’s marketing strategy. For example, in a highly competitive market, the business should focus more on differentiating itself through unique branding, original product ideas, and continuous innovation.

Brand positioning

The product’s value proposition determines its pricing, promotional strategies, and distribution methods which form the marketing mix. It is one of the first steps to developing an integrated marketing strategy.

Extending the marketing mix – 7Ps

In service marketing, the 4Ps marketing mix is extended into the 7Ps, which comprises the original 4Ps, plus People, Process, and Physical evidence.

People

People refers to anyone who engages in marketing activities in a company, either directly or indirectly.

It includes the staff, customer service team, salespeople, and even customers. They not only help with selling the product but also contribute to the company’s positive image. For example, customer service has a direct influence on customer satisfaction. If the customer service is positive, it will leave a good impression on the customer and entice them to come back. Customers can also act as brand ambassadors who spread the word about the business and win referrals.

Processes

Processes are activities that help the company deliver the promised product or service.

The standard process is developed to ensure customers receive the same quality product repeatedly. Having the right processes also increases your business efficiency, thus saving time and money.

Physical evidence

Physical evidence is what the customer sees while interacting with the business.

This includes the business layout, interior design, branding, packaging, staff, or uniform. The physical evidence should convince the customer to invest their time and money in the service. It’s also crucial to match reality with the promise you make to ensure high customer satisfaction.

Marketing Mix - Key takeaways

  • The marketing mix is a set of marketing tools employed by a company to promote its products or services in the market. It includes the 4Ps which stand for product, price, place, and promotion.
  • Product means the item that satisfies the customer’s needs or wants, which can be tangible or intangible.
  • Price is the amount customers pay for a product. Two popular pricing strategies are price skimming and price penetration.
  • Place includes the distribution methods and location a company uses to access the target customer.
  • Promotion is the set of activities to raise awareness about a product and sell it to the right customers.
  • In service marketing, the 4Ps marketing mix is extended into the 7Ps. These comprise the original 4Ps, plus Process, People, and Physical evidence.

Marketing Mix

The marketing mix is a set of marketing tools employed by a company to promote its products or services in the market. It includes the 4Ps which stand for product, price, place, and promotion. In service marketing, the 4Ps marketing mix is extended into the 7Ps. These comprise the original 4Ps, plus process, people, and physical evidence.

Promotion is the set of activities that raises awareness about a product and gets it sold to the right customers. Companies can adopt various promotional tactics, both direct and indirect, to capture the audience’s attention. These are often grouped into four categories: advertising, PR, direct marketing, and sales promotion. Some examples include giving free samples, sponsoring sports events, holding contests, and offering prizes.

The marketing mix helps the company determine whether their product fulfils a need in the market, which is crucial for developing an enticing offering. It also helps with planning and executing a marketing strategy properly – to market the right product to the right people at the right time and the right place.  Finally, as the marketing mix considers various aspects of the business, it ensures harmonious cooperation between different departments within the company, including production, research and development, accounting, and marketing.  

Final Marketing Mix Quiz

Question

What are pricing decisions?

Show answer

Answer

Pricing decisions are decisions to be made regarding the price of a product or service that a company provides

Show question

Question

What factors influence pricing decisions?

Show answer

Answer

  • Production costs
  • Competitor price
  • Customer’s willingness to pay
  • Market conditions
  • Brand image
  • Product quality.

Show question

Question

What is price skimming? 


Show answer

Answer

Price skimming is the technique of setting a high price at the product’s launch, then lowering it when the demand drops and the market becomes saturated.

Show question

Question

Brands adopt the price skimming method to...

Show answer

Answer

capture consumer surplus and exploit its monopolistic position before competitors enter.

Show question

Question

What type of product works well with a price skimming strategy? 


Show answer

Answer

Products with an inelastic demand curve.

Show question

Question

At which stage of the product life cycle is the price skimming method often adopted?

Show answer

Answer

The introduction stage

Show question

Question

Price skimming strategies work best when...

Show answer

Answer

Products are of low quality

Show question

Question

What are some advantages of price skimming?

Show answer

Answer

  • High returns on investment.
  • Prestigious brand image.
  • Revenues from different customer segments.
  • Testing and free promotion from early adopters.

Show question

Question

Why is price skimming not a long-term strategy?

Show answer

Answer

When other companies enter, it’s harder to compete if your price remains high. Keeping the price high for too long also alienates price-sensitive customers. 

Show question

Question

How do you define the marketing mix?

Show answer

Answer

The marketing mix is a set of marketing tools employed by the company to promote its products or services in the market. It includes the 4Ps which stand for product, price, place, and promotion.

Show question

Question

​How is the marketing mix used?

Show answer

Answer

Tactics derived from the marketing mix are used to put the right product in the right place, at the right price, and at the right time.

Show question

Question

What is not included in the marketing mix 4Ps? 


Show answer

Answer

Product    

Show question

Question

What is the difference between tangible and intangible products?


Show answer

Answer

Tangible products are goods that can be touched and felt (e.g. a car, house, or computer), whereas intangible products are solutions customers can benefit from but cannot touch or feel (e.g. consulting services or health insurance).

Show question

Question

What are some product decisions in the marketing mix?


Show answer

Answer

- Product types and features

- Branding: logo, packaging, labelling

- Additional service and support: warranties, guarantees, returns.

Show question

Question

What is price skimming?


Show answer

Answer

Price skimming is a price strategy where the company starts with a high price then lowers it over time. This is done to increase the product’s perceived value and generate higher profit margins.

Show question

Question

What is price penetration? 


Show answer

Answer

Price penetration is the opposite of price skimming, which starts with a lower price, then increases over time. The benefit of this strategy comes from price competitiveness.

Show question

Question

What is the difference between price skimming and price penetration?


Show answer

Answer

Price penetration charges products at a lower end or with little margin, whereas price skimming charges new products at a higher end or with a large margin. Price skimming works well for innovative or luxury goods and targets status-conscious customers willing to pay higher prices. By contrast, price penetration is often used for less exclusive goods such as cosmetics and groceries.

Show question

Question

What is 'place' in the marketing mix? 


Show answer

Answer

 Place is the distribution method or location the company uses to access the right customers.  

Show question

Question

What are some common types of promotion? 


Show answer

Answer

Personal selling, direct marketing, public relations (PR), sales promotion, advertising.

Show question

Question

Name 3 elements of the 7Ps of the marketing mix 7Ps (in addition to the 4Ps):


Show answer

Answer

People, Processes, Physical evidence

Show question

Question

What are some examples of the physical evidence of a business?


Show answer

Answer

Business layout, interior design, branding, packaging, staff, and uniform.

Show question

Question

What are processes in marketing mix 7Ps?


Show answer

Answer

Processes are activities that help the company deliver the promised service. The standard process is developed by the company to make sure all customers receive the same quality repeatedly.

Show question

Question

Who are the 'people' in the 7Ps of the marketing mix?


Show answer

Answer

People in the 7Ps of the marketing mix includes anyone involved in marketing activities either directly or indirectly. These are the staff, salespeople, customer service agents, and also customers.

Show question

Question

What are product decisions?

Show answer

Answer

Product decisions are decisions to be made about the product or service a company wants to sell.

Show question

Question

Name three product attribute decisions

Show answer

Answer

  1. Core benefit of product
  2. Nature of product
  3. Augmented features

Show question

Question

What is a product life cycle?

Show answer

Answer

Product life cycle is the length of time between when the product is first introduced and when it is removed from the market. 

Show question

Question

What are 4 stages of product life cycle? 


Show answer

Answer

Introduction, Growth, Maturity, Decline

Show question

Question

What are the disadvantages of the skimming pricing strategy?

Show answer

Answer

Not a long-term strategy

Show question

Question

The opposite strategy of price skimming is...

Show answer

Answer

Price penetration

Show question

Question

Give examples of products with an inelastic demand curve. 

Show answer

Answer

electricity, medicines, gas

Show question

Question

Price skimming differentiates super fans and early adopters from price-sensitive customers.

Show answer

Answer

True

Show question

Question

By pricing the product at a higher end, you can build a ... brand image to attract ... consumers.

Show answer

Answer

prestigious, status-conscious

Show question

Question

Decisions on products are made by 

Show answer

Answer

Marketers

Show question

Question

Marketing mix helps a business deliver product in the right place, at the right ...... and uses........ to raise awareness. Fill in the gap

Show answer

Answer

Price and Promotion

Show question

Question

The 4Ps of marketing mix has an extension which makes it 7ps of marketing namely Process, people and 

Show answer

Answer

Physical evidence 

Show question

Question

Marketing mix is a tool used to promote goods and services. True or False

Show answer

Answer

True

Show question

Question

.......... Is what a company uses to satisfy a consumer's needs and wants

Show answer

Answer

Product

Show question

Question

What should a marketer do to match the actual value of a product to its perceived value?

Show answer

Answer

Set a fair price

Show question

Question

Zara Plc enters the fashion industry setting its prices high and later makes a business decision to lower its prices. This strategy is called.........

Show answer

Answer

Price skimming

Show question

Question

Lidl known for selling at low prices, if Lidl decides to set its prices high. What strategy would you say Lidl is adapting?

Show answer

Answer

Price penetration

Show question

Question

What is the Boston matrix used for?

Show answer

Answer

Develop product 

Show question

Question

What is Place used to define in the Ps of marketing?

Show answer

Answer

Distribution methods and locations

Show question

Question

An integrated marketing mix combines and harmonises all elements of marketing mix. True or False

Show answer

Answer

True

Show question

Question

The following are common types of promotion except

Show answer

Answer

Public relations (PR)

Show question

Question

Price skimming and Price penetration are ......... strategies 

Show answer

Answer

Pricing strategies 

Show question

Question

Augmented features are extra services that come with the core product. 

Show answer

Answer

True

Show question

Question

Name two common pricing strategies used in the introduction stage of the product life cycle. 

Show answer

Answer

  1. Price skimming
  2. Price penetration

Show question

Question

In the introduction stage of a product, sales are high and growth is noticeable. 

Show answer

Answer

True

Show question

Question

In the growth stage of a product, sales will grow...

Show answer

Answer

exponentially 

Show question

Question

In the maturity stage of a product, sales growth is...

Show answer

Answer

declining

Show question

60%

of the users don't pass the Marketing Mix quiz! Will you pass the quiz?

Start Quiz

Discover the right content for your subjects

No need to cheat if you have everything you need to succeed! Packed into one app!

Study Plan

Be perfectly prepared on time with an individual plan.

Quizzes

Test your knowledge with gamified quizzes.

Flashcards

Create and find flashcards in record time.

Notes

Create beautiful notes faster than ever before.

Study Sets

Have all your study materials in one place.

Documents

Upload unlimited documents and save them online.

Study Analytics

Identify your study strength and weaknesses.

Weekly Goals

Set individual study goals and earn points reaching them.

Smart Reminders

Stop procrastinating with our study reminders.

Rewards

Earn points, unlock badges and level up while studying.

Magic Marker

Create flashcards in notes completely automatically.

Smart Formatting

Create the most beautiful study materials using our templates.

Sign up to highlight and take notes. It’s 100% free.