Category : Banking
Marketing mix is an important concept in modern marketing. It is the crux of marketing process. It refers to the set of actions or tactics, that a company uses to promote its brand or product in the market. It includes almost everything that a firm uses to affect consumers perceptions favourably towards its products or services, so that the consumer and organisational objectives can be achieved. However, the 4Ps remain the most popular classification in terms of marketing mix. In 1990, Robert F Lauterborn proposed a 4Cs classification, which is a more consumer-oriented version of the 4Ps.
The elements or components of marketing mix may be grouped broadly under the following four heads
Product refers to the goods and services offered by the organisation for sale to the consumer for a price. In other words, a product is a bundle of utilities consisting of various features and accompanying services.
Product can be broadly classified as follows
Based on use, the product can be classified as
Products that are purchased for personal consumption by the households or ultimate consumers are known as 'consumer goods5. Clothing, food, automobiles and jewellery are all examples of consumer goods.
Based on consumer's buying behaviour, the consumer goods can be further classified as
(i) Convenience Goods Goods which are brought frequently without much planning or shopping effort and are also consumed quick, are called convenience goods.
(ii) Shopping Goods these are the goods which are purchased less frequently and are used very slowly and choice for these products are made considering its suitability, price, style, quality and products of competitors and substitutes, if any like clothes, shoes, household appliances.
(iii) Speciality Goods Speciality goods have particularly unique characteristic and brand identification for which a significant group of buyers are willing to put generally special efforts to buy them.
These goods are meant for use as inputs in production of other products or provision of some service and include raw materials, machinery, components and operating supplies. These are meant for non-personal and commercial use.
Based on durability the products can be classified
Durable goods are products which are used for a long period. Examples of such goods are capital goods such as refrigerator, car, washing machine, etc.
Non-durable goods are products that are normally consumed in one go or last for a few uses. Examples of such products are soap, salt, pickles, sauce; etc.
Based on tangibility, the product can be classified as
Tangible goods have a physical form, that can be touched and seen e.g., groceries, cars, raw materials, machinery, etc.
Intangible goods refer to services provided to the individual consumer or to the organisational buyers. Medical treatment, postal, banking and insurance services, after sales services, performance and goodwill of product.
These are intangible, inseparable, variable and perishable products that normally require more quality control, supplier credibility, adaptability which satisfies wants and needs, Examples include haircuts, legal advice and appliance repairs.
It is the amount charged for a product or service. In other words, price is the consideration in terms of money paid by consumers for the bundle of benefits, he derives by using the product or service. It is the exchange value of goods and services in terms of money. Various factors that have to be kept in mind while fixing the price are demand for a product, cost involved, consumer's ability to pay, prices charged by competitors for similar products, government restrictions, etc. Price is the only element in the marketing mix of a firm that generates revenue. Rest of them generate only cost. Price and volume of sales together decide the revenue of any business.
The various factors affecting the pricing policies and decision are
Internal factors are categorised as
(i) Organisation Factors The marketing managers role is to assist the top management in price determination and administer the pricing within policies laid down by top management.
(ii) Marketing Mix Price is one of the important element of the marketing mix and therefore must be coordinated with the other elements: product, promotion and distribution.
(iii) Product Differentiation The price of the product also depends upon the various characteristics offered by the product.
(iv) Cost of a Product Cost and price of a product are closely related. The most important factor is the cost of production. In deciding to market a product, a firm should also try to decide what prices are realistic, considering current demand and competition in the market.
External factors are categorised as
(i) Product Demand the market demand for a product or service has a big impact on pricing. Since, demand is affected by the potential buyers, their capacity and willingness to pay, their preference, etc. are taken into account while fixing the price.
(ii) Competition The prevailing information about what price the competitors are charging for similar products and what possibilities lay ahead for raising or lowering prices, also effect pricing.
(iii) Behaviour and Nature of Buyers The nature and behaviour of the consumers and users, for the purchase of a particular product or services, do affect pricing, particularly if their number is large.
(iv) Government Rules and Regulations the regulatory pressures, and price rise and control measure effectively discourage companies from cornering too large a share of the market and controlling prices.
Goods and services 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. Place is concerned with various methods of transporting and storing goods and then making available for the customer. Getting the right product, to the right place, at the right rime, involves the distribution system and the choice of distribution method depends on a variety of circumstances. Making the products available, it involves a chain of individuals and institutions like distributors, wholesalers and retailers who constitute company's distribution network.
Promotion is an important ingredient of marketing mix as it refers to a process of informing, persuading and influencing a consumer to make choice of the product of the company in question. Promotion is done through 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.
In case of services, the producer-oriented model of marketing mix consist of 7Ps. Including the above 4Ps, there are additional 3Ps and they are
Factors affecting marketing mix are
4Cs consumer-oriented model of marketing mix are as follows
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