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Business_Marketing
- Module
- Institution
The Marketing strategy for your business to continue in the market, this case will help you to choose your marketing plans and mix.
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MODULE-5Marketing
Notes
20
MARKETING MIX
I n the previous lesson you learnt that marketing identifies consumers’ needs and supplies
various goods and services to satisfy those needs most effectively. So the businessman
needs to: (a) produce or manufacture the product according to consumers’ need; (b)
make available it at a price that the consumers’ find reasonable; (c) supply the product to
the consumers at different outlets they can conveniently approach; and (d) inform the
consumers about the product and its characteristics through the media they have access
to.
So the marketing manager concentrates on four major decision areas while planning the
marketing activities, namely, (i) products, (ii) price, (iii) place (distribution) and
(iv) promotion. These 4 ‘P’s are called as elements of marketing and together they constitute
the marketing mix. All these are inter-related because a decision in one area affects decisions
in other areas. In this lesson you will learn about the basic aspects relating to these 4‘P’s
viz., product, price, place and promotion.
OBJECTIVES
After studying this lesson, you will be able to :
• explain the concept of marketing mix and its components;
• explain the meaning of product and its classification;
• state the various factors affecting pricing decisions;
• describe different methods of pricing;
• state the meaning of channels of distribution;
• identify the various channels of distribution;
• state the factors affecting choice of a channel of distribution; and
• explain the concepts of promotion and promotion mix.
Business Studies 101
, MODULE -5
Marketing
20.1 CONCEPT AND COMPONENTS OF MARKETING MIX
Marketing involves a number of activities. To begin with, an organisation may decide on
Notes its target group of customers to be served. Once the target group is decided, the product
is to be placed in the market by providing the appropriate product, price, distribution and
promotional efforts. These are to be combined or mixed in an appropriate proportion so
as to achieve the marketing goal. Such mix of product, price, distribution and promotional
efforts is known as ‘Marketing Mix’.
According to Philip Kotler “Marketing Mix is the set of controllable variables that the firm
can use to influence the buyer’s response”. The controllable variables in this context refer
to the 4 ‘P’s [product, price, place (distribution) and promotion]. Each firm strives to
build up such a composition of 4‘P’s, which can create highest level of consumer satisfaction
and at the same time meet its organisational objectives. Thus, this mix is assembled keeping
in mind the needs of target customers, and it varies from one organisation to another
depending upon its available resources and marketing objectives. Let us now have a brief
idea about the four components of marketing mix.
Product : Product refers to the goods and services offered by the organisation. A pair of
shoes, a plate of dahi-vada, a lipstick, all are products. All these are purchased because
they satisfy one or more of our needs. We are paying not for the tangible product but for
the benefit it will provide. So, in simple words, product can be described as a bundle of
benefits which a marketeer offers to the consumer for a price. While buying a pair of
shoes, we are actually buying comfort for our feet, while buying a lipstick we are actually
paying for beauty because lipstick is likely to make us look good. Product can also take
the form of a service like an air travel, telecommunication, etc. Thus, the term product
refers to goods and services offered by the organisation for sale.
Price: Price is the amount charged for a product or service. It is the second most important
element in the marketing mix. Fixing the price of the product is a tricky job. Many factors
like demand for a product, cost involved, consumer’s ability to pay, prices charged by
competitors for similar products, government restrictions etc. have to be kept in mind
while fixing the price. In fact, pricing is a very crucial decision area as it has its effect on
demand for the product and also on the profitability of the firm.
Place: Goods are produced to be sold to the consumers. They must be made available to
the consumers at a place where they can conveniently make purchase. Woollens are
manufactured on a large scale in Ludhiana and you purchase them at a store from the
nearby market in your town. So, it is necessary that the product is available at shops in
your town. This involves a chain of individuals and institutions like distributors, wholesalers
and retailers who constitute firm’s distribution network (also called a channel of distribution).
The organisation has to decide whether to sell directly to the retailer or through the
distributors/wholesaler etc. It can even plan to sell it directly to consumers. The choice is
guided by a host of factors about which you will learn later in this chapter.
102 Senior Secondary
, MODULE-5
Marketing
Promotion: If the product is manufactured keeping the consumer needs in mind, is rightly
priced and made available at outlets convenient to them but the consumer is not made
aware about its price, features, availability etc, its marketing effort may not be successful.
Therefore promotion is an important ingredient of marketing mix as it refers to a process Notes
of informing, persuading and influencing a consumer to make choice of the product to be
bought. Promotion is done through means of personal selling, advertising, publicity and
sales promotion. It is done mainly with a view to provide information to prospective
consumers about the availability, characteristics and uses of a product. It arouses potential
consumer’s interest in the product, compare it with competitors’ product and make his
choice. The proliferation of print and electronic media has immensely helped the process
of promotion.
Marketing Mix : A bird’s eye view
Price
Target
Product Promotion
Customer
Place
(Distribution)
Having acquainted ourselves with the broad nature of the four components of marketing
mix, let us now learn some important aspects of each one of these in detail in the following
sections.
INTEXT QUESTIONS 20A
1. List the four components of marketing mix
(a) ___________________________________________________________
(b) ___________________________________________________________
(c) ___________________________________________________________
(d) ___________________________________________________________
2. Give one word/phrase for the following statements :
(a) The crucial decision area of marketing that has direct effect on demand for the
product and profitability of the firm.
Business Studies 103
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