Skip to main content
Business LibreTexts

13.4: Marketing MIx Introduction

  • Page ID
    3675
  • What you’ll learn to do: explain the marketing mix

    The value proposition explains why a consumer should buy a product or use a service and how the product or service will add more value, or better solve a problem, than other similar offerings. Once you get the value proposition right, you still have to actually deliver value to your target customer. The marketing mix describes the tools that marketers use to create value for customers.

    learning objectives

    • Define product
    • Define promotion
    • Define place
    • Define price
    • Give examples of the marketing mix
    • Evaluate how marketing strategies align with corporate strategies

    Defining the Marketing Mix

    Reaching Customers through the Marketing Mix

    The value proposition is a simple, powerful statement of value, but it is only the tip of the iceberg. How do marketing professionals ensure that they are reaching and delivering value to the target customer?

    Take yourself, as a “target customer.” Think about your cell phone. What would make you want to buy a new one? How might the following issues affect your purchasing decision?

    • Features: A company has just released a new phone with amazing features that appeal to you.
    • Price: You’re concerned about the price—is this phone a good deal? Too expensive? So cheap that you suspect there’s a “catch”?
    • Information: How did you find out about this phone? Did you see an ad? Hear about it from a friend? See pictures and comments about it online?
    • Customer service: Is your cell service provider making it easier for you to buy this phone with a new plan or an upgrade?
    • Convenience: Could you easily buy it online in a moment of indulgence?

    You can see there are multiple factors that might influence your thinking and decision about what to buy—a mix of factors. Taken together, these factors are all part of the “marketing mix.”

    Organizations must find the right combination of factors that allow them to gain an advantage over their competitors. This combination—the marketing mix—is the combination of factors that a company controls to provide value to its target customers.

    The following video illustrates how the marketing mix changes depending on the target customer:

    Evolving Definitions of the Marketing Mix

    There are a few different ways the marketing mix is presented. During the 1950s the components of the marketing mix were conceived as the “four Ps” and were defined as follows:

    1. Product: the goods and services offered
    2. Promotion: communication and information
    3. Place: distribution or delivery
    4. Price: ensuring fair value in the transaction[1]
    A graphic showing “Target Market” as the central piece of the 4 Ps surrounding it: Product, Price, Promotion, Place.

    Today, this categorization continues to be useful in understanding the basic activities associated with marketing. The marketing mix represents the way an organization’s broad marketing strategies are translated into marketing programs for action.

    Over time, new categories of the marketing mix have been proposed. Most are more consumer oriented and attempt to better fit the movement toward a marketing orientation and a greater emphasis on customer value. One example is the four Cs, proposed by Robert F Lauterborn in 1990:

    1. Customer solution: what the customer wants and needs
    2. Communication: a two-way dialogue with the customer
    3. Convenience: an easy process to act or buy
    4. Cost: the customer’s cost to satisfy that want or need[2]

    The four Cs include a greater focus on the customer but align nicely with the older four Ps. They also enable one to think about the marketing mix for services, not just products. While it is difficult to think about hotel accommodations as a distinct product, it is much easier to think about a hotel creating a customer solution. You can see how the four Ps compare with the four Cs in the chart below:

    Four Ps Four Cs Definition
    Product
    Consumer solution
    A company will only sell what the consumer specifically wants to buy. So, marketers should study consumer wants and needs in order to attract them one by one with something he/she wants to purchase.
    Promotion
    Communication
    Communications can include advertising, public relations, personal selling, viral advertising, and any form of communication between the organization and the consumer.
    Place
    Convenience
    In the era of Internet, catalogs, credit cards, and smartphones, often people don’t have to go to a particular place to satisfy a want or a need, nor are they limited to a few places to satisfy them. Marketers should know how the target market prefers to buy, how to be there and be ubiquitous, in order to provide convenience of buying. With the rise of Internet and hybrid models of purchasing, “place” is becoming less relevant. Convenience takes into account the ease of buying the product, finding the product, finding information about the product, and several other factors.
    Price
    Cost
    Price is only a part of the total cost to satisfy a want or a need. For example, the total cost might be the cost of time in acquiring a good or a service, along with the cost of conscience in consuming it. It reflects the total cost of ownership. Many factors affect cost, including but not limited to the customer’s cost to change or implement the new product or service and the customer’s cost for not selecting a competitor’s product or service.

    Whether we reference the four Ps or the four Cs, it is important to recognize that marketing requires attention to a range of different approaches and variables that influence customer behavior. Getting the right mix of activities is essential for marketing success.

    Competitors and the Marketing Mix

    The challenge of getting the right marketing mix is magnified by the existence of competitors, who exert market pressures using strategies defined by their marketing mix alternatives. Remember, the purpose of the marketing mix is to find the right combination of product, price, promotion, and distribution (place) so that a company can gain and maintain advantage over competitors.

    Components of the Marketing Mix

    Product

    Purple hexagon with the following text in the center: Product: What solution does the customer want and need. Outside the hexagon, to the right, is a list of considerations: features, design, user experience, naming, branding, differentiation

    In the marketing mix, the term “product” means the solution that the customer wants and needs. In this context, we focus on the solution rather than only on the physical product. Examples of the product include:

    • The Tesla Model S, a premium electric car
    • A Stay at a Holiday Inn Express, a low-price national hotel chain
    • Doritos Nachos Cheese, a snack food
    • Simple, an online banking service

    Each of these products has a unique set of features, design, name, and brand that are focused on a target customer. The characteristics of the products are different from competitors’ products.

    Promotion

    Green hexagon with the following text in the center: Promotion: What is the dialogue between customer and company? Outside the hexagon, to the right, is a list of considerations: Message; method of delivering message, timing of delivery; communications by customers and influencers; competitor promotions.

    In the marketing mix, the term “promotion” refers to the communications that occur between the company and the customer. Promotion includes both the messages sent by the company and messages that customers send to the public about their experience. Examples of promotion include:

    • An advertisement in Cooking Light magazine
    • A customer’s review of the product on Tumblr
    • A newspaper article in the local paper quoting a company employee as an expert
    • A test message sent to a list of customers or prospects

    Marketing professionals have an increasingly difficult job influencing promotions that cannot be controlled by the company. The company’s formal messages and advertising are only one part of promotions.

    facebook logo plus their slogan: "Like us on facebook."

    Marketers often run social media campaigns, rewarding customers who “Like” the company on Facebook.

    Place

    Orange hexagon with the following text: Place: how does the customer act or buy? Outside the hexagon, at the right, is a list of considerations: location of purchase, ease of transaction, access to distribution channels, sales force, competitor approaches

    In the marketing mix, the term “place” refers to the distribution of the product. Where does the customer buy the product? “Place” might be a traditional brick-and-mortar store, or it could be online. Examples include:

    • Distribution through an online retailer such as Amazon.com
    • Use of a direct sales force that sells directly to buyers
    • Sales through the company’s Web site, such as the shoe purchases at Nike.com
    • Sales by a distributor or partner, such as the purchase of a Samsung phone from Best Buy or from a Verizon store

    In today’s world, the concept of “place” in the marketing mix rarely refers to a specific physical address. It takes into account the broad range of distribution channels that make it easy for the target customer to buy.

    Price

    Turquoise hexagon with the following text in the middle: Price: what is the cost to the consumer? Outside the hexagon, at the right, is a list of considerations: value to buyer, price sensitivity, existing price points, discounts, competitor pricing

    In the marketing mix, the term “price” refers to the cost to the customer. This requires the company to analyze the product’s value for the target customer. Examples of price include:

    • The price of a used college textbook in the campus bookstore
    • Promotional pricing such as Sonic Drive-In’s half-price cheeseburgers on Tuesdays
    • Discounts to trade customers, such as furniture discounts for interior designers

    Marketing professionals must analyze what buyers are willing to pay, what competitors are charging, and what the price means to the target customer when calculating the product’s value. Determining price is almost always a complicated analysis that brings together many variables.

    Sonic.PNG

    Sonic offers discounts on cheeseburgers on Tuesday, which is typically a low sales day of the week. Source: https://www.sonicdrivein.com

    Finding the Right Marketing Mix

    Photo of row of salon shelves full of hair-care products.How does an organization determine the right marketing mix? The answer depends on the organization’s goals. Think of the marketing mix as a recipe that can be adjusted—through small adjustments or dramatic changes—to support broader company goals.

    Decisions about the marketing-mix variables are interrelated. Each of the marketing mix variables must be coordinated with the other elements of the marketing program.

    Consider, for a moment, the simple selection of hair shampoo. Let’s think about three different brands of shampoo and call them Discount, Upscale, and Premium. The table below shows some of the elements of the marketing mix that impact decisions by target customers.

    Discount Upscale Premium
    Product Cleansing product, pleasant smell, low-cost packaging Cleansing product, pleasant smell, attractive packaging Cleansing product, pleasant smell created by named ingredients, premium packaging
    Promotion Few, if any, broad communications National commercials show famous female “customers” with clean, bouncy hair Differentiating features and ingredients highlighted (e.g., safe for colored hair), as well as an emphasis on the science behind the formula. Recommended by stylist in the salon.
    Place Distributed in grocery stores and drugstores Distributed in grocery stores and drugstores Distributed only in licensed salons
    Price Lowest price on the shelf Highest price in the grocery store (8 times the prices of discount) 3 to 5 times the price of Upscale

    A number of credible studies suggest that there is no difference in the effectiveness of Premium or Upscale shampoo compared with Discount shampoo, but the communication, distribution, and price are substantially different. Each product appeals to a very different target market. Do you buy your shampoo in a grocery store or a salon? Your answer is likely based on the marketing mix that has most influenced you.

    An effective marketing mix centers on a target customer. Each element of the mix is evaluated and adjusted to provide unique value to the target customer. In our shampoo example, if the target market is affluent women who pay for expensive salon services, then reducing the price of a premium product might actually hurt sales, particularly if it leads stylists in salons to question the quality of the ingredients. Similarly, making the packaging more appealing for a discount product could have a negative impact if it increases the price even slightly or if it causes shoppers to visually confuse it with a more expensive product.

    The goal with the marketing mix is to align marketing activities with the needs of the target customer.

    Creating and Aligning the Marketing Strategy

    Inputs That Inform Marketing Strategy

    To a great extent, developing the marketing strategy follows the same sequence of activities used to define a corporate strategy. The chief difference is that the marketing strategy is directly affected by the overall corporate strategy; that is, the marketing strategy needs to work with—not apart from—the corporate strategy. As a result, the marketing strategy must always involve monitoring and reacting to changes in the corporate strategy and objectives.

    In order to be effective, a marketing strategy must capitalize on the resources at its disposal within the company, but also take advantage of the market forces that are outside the company. One way to assess these different factors, or inputs, is by conducting a situation analysis (also called a SWOT analysis). As you recall, a SWOT analysis includes a review of the company’s internal strengths and weaknesses and any external opportunities and threats that it faces.

    Centering on the Target Customer

    The marketing strategy defines how the marketing mix can best be used to achieve the corporate strategy and objectives. The centerpiece of the marketing strategy is the target customer. While the corporate strategy may have elements that focus on internal operations or seek to influence external forces, each component of the marketing strategy is focused on the target customer.

    Recall the following steps of determining who your target customer is:

    1. Identify the business need you will address, which will be driven by the corporate strategies and objectives;
    2. Segment your total market, breaking down the market and identifying the subgroup you will target;
    3. Profile your target customer, so that you understand how to provide unique value;
    4. Research and validate your market opportunity.

    Focusing the marketing strategy on the target customer seems like a no-brainer, but often organizations get wrapped up in their own strategies, initiatives, and products and forget to focus on the target customer. When this happens the customer loses faith in the product or the company and turns to alternative solutions.

    Aligning Corporate and Marketing Strategies

    The Market Planning Process: vertical Flowchart with 7 layers. From top, Layer 1 “Corporate Mission” [highlighted in gold] points to Layer 2 “Situational Analysis” [blue], points Layer 3 “Internal Factors: Strengths & Weaknesses” and “External Factors: Opportunities & Threats” [blue], points to Layer 4 “Corporate Strategy: Objectives & Tactics” [blue]. Layers 2-4 are connected with gray lines, as one sub-unit. This points to Layer 5 “Marketing Strategy: Objectives & Tactics” [blue], to Layer 6, a graphic showing “Target Market” as the central piece of the 4 Ps surrounding it: Product, Price, Promotion, Place [all blue]. The final layer is “Implementation & Evaluation” [blue]. Layers 5-7 are connected with gray lines, as a second sub-unit.Objectives can create alignment between corporate and marketing strategies. If the corporate objectives are clearly defined and communicated, they can guide and reinforce each step of the marketing planning process.

    How would good corporate-level objectives inform the marketing strategy and objectives? Consider the following examples:

    1. Imagine completing a market segmentation process. You find a target market that will find unique value in your offering. The decision to pursue that target market will depend on whether that segment is large enough to support the corporate objectives for market growth.
    2. How many new products should the company launch this year? The answer should be informed by the corporate objectives for growth and profitability.
    3. The marketing function has identified a customer relationship management campaign that would create greater customer loyalty. Does the cost of the campaign and its expected returns align with the company objectives?

    As you can see, company objectives provide important guidance to the marketing planning process. Likewise, marketing objectives ensure that the goals of the marketing strategy are defined, communicated, and measured.


    1. McCarthy, Jerome E. (1964). Basic Marketing. A Managerial Approach. Homewood, IL: Irwin.
    2. Lauterborn, B. (1990). New Marketing Litany: Four Ps Passé: C-Words Take Over. Advertising Age, 61(41), 26.