Marketing Mix Fundamentals: What is in your recipe for corporate growth?

Feature Image_BlogFundamentals Author: Bradley G, Public Relations Intern


So you want to start a new company. If you read our pieces on how to conduct your social media marketing strategy, you’re a few steps ahead of the game. However what about the other aspects of your business marketing plan? It’s important to know how to coordinate the rest of your operation so you can figure out what to sell, how to sell it, who to sell it to, and where to sell it. This is the very purpose of what Michigan University Professor E. Jerome McCarthy deemed to be the “Marketing Mix.” [1] The Marketing Mix can briefly be defined as “the set of actions, or tactics, that a company uses to promote its brand or product in the market.” [5] Quite simply, it’s how a company ensures that its product, whether good or service, sells.

The concept is simple enough, but the execution of it has a wide variety of methods of approach and analysis. To save you some time, we’ll summarize the concepts that you’ll need to know here. The “Marketing Mix” is divided into four core categories with two subsidiary points of concern:
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To make the above concepts we’ll clear, we’ll elaborate using an easily understood assumed example: a startup company based around a newly discovered way to make cheap, sweet, Raspberry wine.



Product: What are you selling?


Feature Image_Wine_1 The simple question that starts at the beginning of every business venture is: “What are you selling and what is its value?” Finding the answer to this seems relatively simple, but it’s important to take into consideration more of the deeper issues brought up by the latter part of the question.

Say your product is this Raspberry Wine. Well, that’s all fine and good, but let’s consider for a moment the qualities of what you’re selling.

  • Is it a sweet or dry wine?
  • How are you going to package the product?
  • What is the cost of production?
  • Where are the berries from and how will that affect the quality of the wine?
  • Does the wine have a long shelf life?
  • Is there existing evidence that this wine would be lucrative?
With these and more factors in play, the question of what you’re selling becomes more complex than it seems initially. You may love the idea of your product, but if you don’t solidify on paper what it is and what it’s worth, then you’ll have a lot of trouble realistically planning out the rest of your company’s marketing scheme.




Price: How much are you charging for it?

Feature Image_Wine_2 It’s tempting, depending on your temperament, to say either “My product will be $1 and everyone will buy it, covering all of my costs!” or “My product will be the most expensive of its kind, a luxury for millionaires, whose leagues I am surely soon to join!” The reality, as we all know, has to lay somewhere far in between.

The concept of supply (how much of a product there is available) versus demand (how much people want the product) is crucial here, in addition to covering the cost of your production, shipping, marketing, and general operations. You need to make sure that your product is hitting the market at the right pace so you can make as much off of every sale as possible while ensuring the amount of sales at minimum will cover costs.

If there’s been a horrible virus hitting grape crops the world over and alternative wines are on the rise, it may be a safe bet that your Raspberry Wine could sell pretty well. In the current climate, if someone publishes a popular article suggesting Raspberries may be bad for one’s liver, it’d be best to shoot low for a while. Always keep an eye on the market, and be realistic about how much people already pay for products similar to your own.



Place: Where are you trying to sell your product?

Anytime you sell a product, you need to keep in mind where you’re distributing it and how. This aspect changes based on your awareness of who is buying your product, how much you can afford to ship, what retailers are willing to sell your product, among a plethora of other things to keep in mind.

For simplicity's sake, we’ll return to our Raspberry Wine example. Let’s say you’re local to the Lawrenceville neighborhood of Pittsburgh, and you’re aware that as a startup, you don’t have a lot of funds to make a lot of wine or ship it across the country. With that in mind, you become aware that your item is MOST popular with (in this example) college students and artists. From here, we would have you research where these college students are buying their wine or other such goods, and you make sure your product retails there-- for artists, submit your wine to gallery events, theater shows, perhaps the lobbies of a few theaters throughout Pittsburgh. With these coordinated moves, you are ensuring that your product is available to the people that you can predict will be buying it in places where they are inclined to buy, all without breaking your bank!



Promotion: How do you encourage people to buy your product?

This is where agencies such as ours really come into play. Promotion, put elegantly, is:

    “[...] all the activities undertaken to make the product or service known to the user and trade. This can include advertising, word of mouth, press reports, incentives, commissions and awards to the trade. It can also include consumer schemes, direct marketing, contests and prizes.” [5]
Feature Image_Wine_4 Promotion is branding, graphic design, advertising, and public relations all in one package. The way you present your product, the places that you publish advertisements, the way that you fundamentally design your logo all factor into your promotion.

The key question you have to ask yourself for this category is, “Where and when can you get across your marketing messages to your target market?” [2] Let’s apply this question to our theoretical Raspberry Wine startup.

So, to appeal to your assumed demographic of artists and college students, let’s assume market trends suggest that these demographics enjoy the idea of naturally produced, down to Earth products with a folksy feel. For that reason, you make your product feel natural by marketing it as “Raspberry Hills”-- to compliment the name, you get a graphic designer to create a rustic logo in semi-fancy text over some hills that look like a nice painting. Thus, it appears natural, down-to-Earth, and just that little bit of folksy while still holding the class of wine.
Your product is now being sold at the distribution centers that were listed above, but how do you encourage people to buy it while they’re there? Let’s use what we learned from our Social Media research, and work knowing that most people in your target demographic are on Facebook and Twitter-- start making quirky content and target ads to appear to people in the area interested in wine and art, especially those between the ages of 21 and 29 (the ages we can assume people in college to largely be). As well, buy ad space and put some money in local plays and exhibitions, get a spot in their programs-- “Raspberry Hills” proudly sponsoring art will work wonders for you.

From this, you’ve established a quirky company that exists for college students and artists, understands what they enjoy, and supports their endeavors and gives back to the community-- “Raspberry Hills” is now sounding like a pretty solid brand, isn’t it?



The Other 3 P’s - Physical Environment/Evidence, People, Process


We’ve covered the primary four, but the other three factors are all things a little bit too important to ignore here:

  • Physical Environment/Evidence - The leftover evidence from your work is powerful. For instance, if the area where your product is being made is left as a tattered industrial ruin, you’re not going to be able to market yourself as a “green” corporation. Likewise, if the area is left pristine, and your product comes in a recyclable container, then people can take note of your environmental conscientiousness.
  • People - You should never forget the way that your employees behave. If your representatives are out at promotional events or in stores harassing customers, your brand is likely to fall down in public perception. However, if your employees are warm, friendly, fun and visible, then people will take comfort interacting with your business, customers and fellow business-people alike.
  • Process - The way by which you create your product or run your service is vital. If you’re known for a destructive business process that stands as a hazard for employees and doesn’t pay enough, you’ll get a bad corporate reputation. Likewise, should you be using outdated fax machines for communication, then your distribution routes and abilities to promote and communicate with customers and other businesses will be stunted. It’s best to be conscious of both available modern technology and humane business standards when evaluating and coordinating your business process.



The Right Size For Your Company - Small, Medium, or Large?


For a rough, quick illustration combining the primary points of the big 4 P’s of the Marketing Mix, let’s create a quick chart for how company like “Raspberry Hills” should structure its mix, depending on its size.

Small Company Medium Company Large Company
Product Raspberry Wine - local and delicious, small reputation in Pittsburgh area Raspberry Wine - Folksy and delicious, native to Western Pennsylvania, sold in the Pennsylvania tri-state area Raspberry Wine - Folksy and wonderful, native to Western Pennsylvania, reputed throughout the United States
Price $10 - Perfect for a local price, not too expensive for new customers [6] $13 - Well known, slightly more expensive but not extravagant $17 - Not extravagant, but worth it for this new sensation
Place Selling at galleries, theaters, and local alcohol distributors in Pittsburgh The small company’s example, in addition to a few more mainstream wine distributors in the tri-state area The medium company’s example, but on a national scale, and at higher-grade theaters and performance halls across the country
Promotion You don’t need to pay a lot to advertise-- in play and gallery programs there should be some ads, and be active on Facebook and Twitter Take what’s in the small company example, and expand it to more social media like YouTube, Instagram, and Pinterest. Make sure to expand targeted ads to the tri-state area! This is the point where you do what the medium company would do, but buy adspace on targeted websites in addition to social media, and maybe sponsor a few TV ads.*
* Depending on if you think any of your target demographic is watching TV. Remember, for 21-29, there aren’t a lot who still do-- do your research into what your demographic is seeing before investing money in advertisements!




Conclusion

Feature Image_Cheers A Marketing Mix, when you strip away the extensive elaboration, is really just the preparation of a company where you identify what you’re selling, who you’re selling to, what you should charge them, where they’ll be buying it, and how you can encourage them to buy it. A Marketing Mix is just a mix of things to make sure you actually sell what you’re trying to make.

A lot of this list can seem intimidating, but try to remember the main Four P’s (and the subsidiary Three P’s, if you can): Product, Price, Place, and Promotion. If you coordinate them all, you should have a solid product that’s reaching the audience you want, makes more than enough money to cover your production costs, and holds a good reputation within the community of your target demographic. And if you need more information after looking at this article, don't worry: there are a variety of sources out there that can help elaborate on it, such as this one from Toggl. If a lot of people buy your product frequently for a price that works for you, your company will do fine. Your business can easily work just as well as “Raspberry Hills.”

Cheers!


Questions?

Contact Us by email at alliaudrey@idesigncollaborative.com.


  [1] https://en.wikipedia.org/wiki/Marketing_mix
[2] https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/marketing-strategies-and-planning-2/steps-to-creating-a-marketing-plan-28/creating-a-marketing-mix-154-7234/
[3] https://www.mindtools.com/pages/article/newSTR_94.htm
[4] https://www.cleverism.com/understanding-marketing-mix-concept-4ps/
[5] http://economictimes.indiatimes.com/definition/marketing-mix
[6] http://www.masslive.com/entertainment/index.ssf/2013/08/wine_prices_whats_the_magic_nu.html
[7] https://toggl.com/marketing-mix-4ps