Blog / Marketing mix: fundamentals for optimal marketing decisions
Marketing mix: fundamentals for optimal marketing decisions
Maurice – October 21, 2023 – 10 min read
The business world is more competitive than ever before due to globalization and digitalization. Competitive products from all countries have become a matter of course. To combat this tide, a sophisticated marketing mix is of paramount importance.
But: What exactly is the marketing mix? To get to the bottom of this question, we took a closer look at the topic for this guidebook article. We’ll give you tips and tricks to help you understand and apply the marketing mix.
After reading this article, you’ll know what the marketing mix is and what the 4Ps are all about. Marketing is an essential area in almost any business, and without it, it’s impossible to succeed against stiff competition these days – read on to learn the basics of how you can still succeed.
Marketing mix: definition
The marketing mix refers to the optimal combination of different marketing tools that companies use to achieve their marketing goals. These tools are often known as the “4 Ps” of marketing:
- Product: This refers to the physical product or service that a company offers, including all the features, benefits and characteristics it possesses. This also includes product development, product design, packaging and functions.
- Price: This refers to the pricing strategy a company sets for its product or service. It takes into account aspects such as costs, competitor prices and customers’ willingness to pay.
- Place (Distribution): This concerns the place and method of delivering products or services to customers. This includes the distribution channel, logistics and location.
- Promotion (communication): This includes all activities that help raise awareness and image of a product or service and promote sales. This includes advertising, sales promotion, public relations and personal selling.
The marketing mix helps companies coordinate and effectively tailor their marketing strategies to their target audiences.
As a classic concept in marketing, it is taught in every business administration course. (Alumni) Business students will agree with us at this point, because even in the first semester of marketing, diligent lecture-goers eventually get the term out of their ears after thousands of mentions.
Thus, the marketing mix is one of the basics that every marketer should know and rightly so, because it helps in making key marketing decisions.
The 4P Model: A Framework for Key Marketing Decisions
Let’s do a quick history loop to explain the added value of the model.
Jerome McCarthy introduced the concept of the four Ps in 1960 in his book “Basic Marketing: A Managerial Approach.” He created this model to simplify and structure marketing decisions. The model is designed to help marketing managers divide the many aspects of marketing strategies into a manageable number of decision areas.
The issues facing marketing managers that are addressed by the 4P model are:
- Product decisions: What should be offered to meet the needs and desires of the target group? What features should the product have? These include issues related to product development, product life cycle, product quality, design, packaging and branding.
- Pricing decisions: At what price should the product or service be offered? This includes considerations of cost structures, pricing strategies, discounts, payment terms, and other price-related issues.
- Place decisions: How should the product best be delivered to the end customer? This includes issues related to channel selection, warehousing, logistics, market coverage and other aspects of distribution.
- Promotional decisions: What is the best way to promote and publicize the product? These decisions include issues related to advertising strategy, sales promotion, public relations, media selection and budgeting, and sales techniques.
McCarthy recognized that marketing managers are faced with the challenge of making decisions in all of these areas. His 4P model is therefore intended to provide a framework for systematically considering and managing these decisions.
Thus, an effective marketing mix based on this enables products or services to be successfully marketed and previously set goals, such as sales figures or profit margins, to be achieved.
Now that we have dealt with the origin and background of the 4P model, the question arises: What are actually the goals of the marketing mix?
Marketing Mix Goals: What are the goals of the marketing mix?
Product – Price – Place – Promotion: The marketing mix pursues several core objectives to help companies operate successfully in the dynamic marketplace:
- Effective strategy development: the main objective is to design a coherent marketing strategy that will enable a company to compete in the market and achieve its goals.
- Optimal product presentation: Through a deep understanding of the product element, companies can: Develop innovative and engaging products or services, responding precisely to customer needs and expectations.
- Effective pricing: A targeted pricing element can be used to define a pricing strategy that maximizes customers’ willingness to buy. This enables companies to both increase their profits and add value for their customers.
Overall, a balanced combination of the 4P’s enables companies to intensify their marketing activities and make the best use of their resources.
In addition, if the price element is understood, the right pricing policy can be applied to encourage customers to buy as much as possible.
Having highlighted the traditional 4 Ps of the marketing mix and their goals, it’s important to recognize that the marketing landscape is constantly evolving. In light of this, experts have expanded the classic approach and added three more P’s. Let’s now take a look at the “3 new P’s” and thus get to know the extended marketing mix with a total of 7 P’s.
The 3 new P’s – Marketing Mix with 7 P’s
Marketing has evolved steadily over the past few decades. While the traditional 4 Ps from the 1960s cover many fundamental aspects of marketing, they are no longer fully relevant in some areas in today’s world. Especially in the service sector, where physical products are absent and customer experience is central, three other Ps have become established. These address modern aspects and ensure that the customer feels comfortable throughout the process.
People (Human Resources Policy):
In times of the “War for Talents”, companies are increasingly placing value on their employees. Talented employees are in high demand; attracting and retaining them requires an appealing corporate culture. In the service sector, satisfied employees are crucial: they ensure satisfied customers through commitment and professionalism. Across all sectors, employees must demonstrate expertise to customers and other stakeholders. Thus, an employee becomes a figurehead of the company and another instrument for marketing.
The following questions arise in the People section:
- What measures can companies take to attract and retain talented employees?
- How can employee satisfaction be measured and increased?
- How can the competence of employees be ensured towards customers?
Process Management (Process Policy)
In the service sector, customers should not only use services, but experience them. Business processes must be customer-oriented, always focusing on the needs of the customer.
The following questions arise in the Process area:
- How can business processes be regularly reviewed and optimized?
- Which tools and methods are suitable for analyzing and optimizing processes?
- How to ensure that the customer experience always remains in focus?
Physical Facilities (Equipment Policy)
The physical environment in which products and services are presented plays a crucial role. A good example is the Apple Store, which provides a positive customer experience. Especially in the service sector, where there is no tangible product, atmosphere and ambience are of central importance.
The following issues arise in Physical Facilities:
- How can the physical presentation of products and services be improved?
- What factors positively influence the ambience and atmosphere? How can
- company ensure that the physical environment matches the brand identity?
Overall, the three new Ps complement the classic marketing mix and enable a more comprehensive and contemporary customer approach.
But how can you find the optimal mix of all these marketing tools?
The optimal marketing mix – tips to find the optimal combination
Optimizing your own marketing mix is not easy. Small businesses in particular often lack the financial resources to invest in all areas of marketing – so marketers in such small businesses often focus on individual elements before they are able to optimize the others as well.
However, there are some important factors you need to understand in order to be able to optimize your marketing efforts in the first place:
- The target group :
You need to know your target audience like the back of your hand. If you don’t know exactly what your customers want, even the most supposedly sophisticated marketing strategies will most likely miss the mark. You should know the characteristics and attributes of your target audience inside and out – only then can you find the best combination of products, prices, sales channels and promotional activities.
- The competition:
To find the ideal marketing mix, you should always keep an eye on the market situation and especially your immediate competition. Understand how they approach marketing their products, feel free to learn from your competitors, and selectively improve the strategies you’ve analyzed to stand out.
Finding the optimal marketing concept right away is hardly possible. Instead, you should try different combinations of products, prices, communication channels and distribution channels. Companies should never rely on a single strategy and should be prepared to make changes at any time if a strategy is not delivering the desired results.
Use marketing tools to record and evaluate the results of your marketing activities. Analyzing your marketing data is an important tool that helps you understand your own strengths and weaknesses and make targeted improvements. Companies should track metrics such as revenue, market share and customer satisfaction to assess how effective their marketing strategy is.
- The three new Ps :
Depending on what area you’re in with your business, the three new Ps can have varying degrees of importance. Especially if you are providing a service, you should not disregard personnel policy, process policy and equipment policy.
Online marketing and marketing mix
The Internet as a marketing platform is enormously important nowadays. Products and services are advertised and sold via the Internet – every day and billions of times. In addition, the Internet offers numerous opportunities to communicate with customers, for example via social media or e-mail.
This makes it all the more important that your marketing mix includes online marketing strategies that tap into the Internet in your favor. Especially with regard to younger target groups, it is indispensable to master and apply online marketing. A marketing strategy that incorporates both traditional and online marketing tactics will help your business remain successful and achieve its business goals.
A balanced, sophisticated marketing mix should be priority number one on your way to the top in your field. To ideally market your product or service, you need comprehensive knowledge in four areas in particular, as well as sufficient resources to not only have plans in the drawer, but to be able to execute them. These four areas are product policy, pricing policy, communication policy and distribution policy – the 4Ps.
In the service sector in particular, three other points are also becoming increasingly important: personnel policy, process policy and equipment policy. You should not lose sight of these either if you want to use a modern strategy to compete with your competitors.
In order to reach your target group in the best possible way, you need ideal coordination of all four or seven points as well as appropriate measures for implementation.
What are the 4 marketing tools?
The four marketing instruments (four Ps) are Price (pricing policy), Product (product policy), Place (distribution policy) and Promotion (communication policy). It is important for every company to master these four marketing tools.
What are the 7 marketing tools?
The seven marketing instruments (seven Ps) are Price (pricing policy), Product (product policy), Place (distribution policy), Promotion (communication policy), People (personnel policy), Process Management (process policy) and Physical Facilities (equipment policy).
What is the goal of marketing mix?
The primary goal of the marketing mix is to efficiently shape the company’s own marketing strategy and thus help the company to hold its own against the competition in its own market as well as to achieve corporate goals.