Marketing Mix – The 4Ps
The term ‘Marketing Mix’ is a foundation model for businesses, traditionally cantered around the product, price, place, and promotion (popularly known as the “4 Ps”). The marketing mix has been described as the “set of marketing tools that the firm uses to pursue its marketing objectives in the target market”. Thus, the marketing mix describes four broad levels of marketing decisions: product, price, place, and promotion. Let us understand the components of the marketing mix one by one.
“But WHEN IT COMES to QUESTIONS of TASTE AND, ESPECIALLY, AESTHETIC PREFERENCE, CONSUMERS DO NOT like AVERAGES. . .. THE LURE of A UNIVERSAL PRODUCT IS A FALSE ALLURE.” – KENICHI O” HMAE, Corporate strategist and author.
The product is the core of the marketing mix. when a business is unable to design the product according to the needs of consumers, no amount of promotion, price-cutting, or convenient distribution will persuade people to buy. Consumers will not repurchase a detergent, for instance, if clothes do not come out as clean as commercials say they will.
In formulating product strategies, international marketing managers must remember that the product is more than a physical object. The total product, which is what the customer buys, includes the physical product, brand name, accessories, after-sales service, warranty, instructions for use, company image, and package. That means product adaptation can be less expensive and easier than altering the product’s physical characteristics. Different package sizes and promotional messages, for instance, can create a new total product for a distinct market. This is one reason that products sold globally are more standardized physically than we might expect. They can be localized by changes to the package, brand name, accessories, after-sales service, warranty, instructions for use, and company image.
Price is simply the sum of money that the customers need to pay in exchange for the product or service. After the product, pricing plays a major role in the marketing mix. The reason for the same is interesting and the fact. Except for the price, the rest of the elements in the marketing mix are the cost originators and the price is a major source of revenue for the business. Through pricing, the business operates to support the cost of production, the cost of distribution, and promotion.
Fundamentally, pricing is a complex element, which requires to indicate supply and demand conditions in the economy, the actual value of the product, and the perceived value of it in the mind of the consumer.
Any price that does not reflect these aspects would lead to the failure of marketing teams. That is the reason, the top management of any business pays higher attention to the pricing policy. It is like a double-edged sword. Low prices may hit the margins of the business and hinder business growth. The higher price would lead to loss of market share and prospective clients.
Promotion, one of the key elements of the marketing mix, is communication between a firm and its publics to bring about a favourable buying action and achieve confidence in the firm and the product or service it provides.
In international marketing, a promotional strategy applied in one country could be unlawful/unethical when used in another. Every edge of promotional briefing needs to be analyzed considering the sentiments of people in a region.
For instance, the Chinese believe red to be a lucky colour and the same colour is also worn by Indian brides. Likewise, white is worn by mourners in India though, brides in the United Kingdom and China wear white for the celebration. Therefore, often it is disastrous to use the same promotional strategy across various countries. Therefore, before entering the international markets, a company must do the PEST analysis (Political, Economic, Social, and Technological) to understand the marketplace better.
Distribution mix is also known as place mix. The development of distribution strategies is challenging in the home country and also internationally. marketing managers must consider two functions – getting the products to foreign markets (exporting) and distributing the products within each foreign market.
Distribution decisions are often interdependent with the other marketing mix variables. For instance, if the product requires considerable after-sales servicing, the firm will want to sell through dealers with the facilities, staff, and capital to purchase spare parts and train service people.
Channel decisions are critical because they are long-term decisions. Once the channel decisions are established, they are comparatively less easy to be changed than those made for the price, product, and promotion. Coca-Cola made a major decision to change its channel system in China at great cost. It moved from using a traditional channel, where competing interests of the channel members were slowing up the company’s connection to the market, to building relationships with its small retail sellers.
Application of Marketing mix to Harshey- American Chocolate Producer in the world
Let us understand the marketing mix with examples. In this article let us see how Hershey Foods uses the 4Ps in its marketing strategy.
Hershey is one of the biggest American chocolate producers in the world. The company is based out of Hershey, Pennsylvania. The company was promoted by Milton S. Hershey in the year 1894 hence named the Hershey Chocolate Company. At that time, chocolate was generally loved by the upper-class society which triggered a strong motive for the company to begin the operations in producing a wide variety of chocolates. Later, the company began producing chocolates keeping for lower-income groups. Currently, the company produces and distributes chocolates in more than 70 countries across the world. The company has effectively utilized the 4Ps of the marketing mix ineffective implementation of marketing strategy. The marketing mix has carefully nailed form the point of production to the point of consumption. Let us briefly discuss each of the components in the 4Ps of the marketing mix in detail.
Hershey’s Product Mix: Hershey food manufacturing company employs a micro-marketing strategy to its businesses. It requires that it markets specific products to minor target audiences, altering its products to meet up with these consumers’ special demands. Hershey seeks to offer its clients a greater range of products under a premium pricing structure. Hershey produces more than one hundred different chocolate varieties and each product comes in unique shape, taste, colour, flavour, size, and specifications. Hershey’s offers chocolates, syrups, and sweet sauces in a variety of flavours and tastes. The products are positioned as healthy and delicious for growing kids of various age groups. The company expanded its marketing reach by enlarging its product base. Symphony, Moulds, Bliss, Pot of Gold, Kisses, York Peppermint, and Drops helped the company to touch the consumers of multiple age groups. Continuous innovation in products helped the company grow in different dimensions.
Hershey’s Price Mix: Hershey’s Chocolate company began its operations keeping upper-class society in consideration and hence positioned as a premium brand. The company charges a premium price for many of its products targeting foreign tourists, upper class, and urban population (Buck, 2016). Though the company prefers to go for premium prices for market positioning, often the company is forced to follow this price just to pass on the rising cost of production and increase the margins. Still, the consumers continue to be price-sensitive despite the company’s cost pressure or any other economic situation. Yet, the company has a wide range of products targeting lower class income groups with due care for the basic product features. Since the company has its strong footprints across the globe, now the company is enjoying the economies of scale. Hershey has acquired an ability to sell its products much lesser than the new entrants and is able to provide steep discounts and offers to retain the existing client base. However, Mars, Nestle, Godiva, and Modelez give tight competitors to Hershey’s in terms of product offerings and prices.
Hershey’s Place Mix: Hershey’s food products are available worldwide in departmental stores, malls, retail outlets, medical stores, grocery stores, vending machines, gas stations, fuel stations, hospitals, and tourist locations. Hershey’s follows both direct and indirect marketing channels to promote the products. A few food products reach directly from Hershey’s production facilities to the consumer’s point of consumption without any intermediaries. In many cases, however, they make the best of their supply chain network to connect with the end-users. Hershey’s product can also be purchased online on Amazon, eBay, and Big basket. The company has a strong supply chain network which brings competitive advantages over its rivals. Many of Hershey’s manufacturing facilities are located in the North America region to take care of many factors including client base, economic conditions, production process, and nature of customers. The company also set-up manufacturing units to reach a geographically dispersed client base. In case the company persists to grow globally, it is likely they would set-up more overseas production facilities to reduce the lag time in production and distribution activities. The company’s market share in the food product industry is expanding despite a tight competition from global giants like Neste, Mondelez, Mars, and Ferrero.
Hershey’s Promotion Mix: Hershey promotes products on television channels, print and social media advertisements, and radio events. Hershey’s milk booster advertisement showcases itself as a wholesome product for growing children and an alternative to conventional milk powders. Another identical approach followed by Hershey with an advertisement in which a cute kid plays with her mother and underscores how almond improves a kid’s nourishment and can be used in daily food calendars. Hershey’s chocolate world is also a tourist fascination destination in Pennsylvania, USA. People across the world tend to visit this place with their families and kids to have food and fun. The company hosts various promotional activities like trolley tours, the 4D chocolate mystery which describes the chocolate story to everyone. The kids are encouraged to design their candy in the chocolate-making process. Kids can exhibit their creative abilities in making their candy which is mostly appreciated by their parents.
Hope the marketing mix and its application in real-time is now clear to you. To know more about marketing mix modelling and its implications on the marketing strategy of a business, check this article. Also, feel free to share your thoughts in the comments section below.
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