Marketing Mix and Marketing Environment
The term marketing mix is a popular phenomenon in the principle of marketing management. And it refers to the combination of the four inputs or factors that constitute the major components or ingredients or pillars upon which marketing system rests.
The term is popularly known as the 4ps’ i.e. the product, the price structure, the promotional activities (communication strategies) and the place (distribution strategies). McCarthy in 1976 was the first professional marketer acclaimed to have referred to product, price, promotion and place as 4P’s of marketing.
Meaning Of The Marketing Mix
The term ‘mix’ as defined in the dictionary means… to get along together……and it is synonymous to the following words: combine, blend, compound, mixture, union, association etc.
Marketing mix refers to all marketing decisions and activities which may stimulate, enhance and promote sales. It is the combination of policies, procedures, processes, programmes, strategies, techniques and methods adopted from period to period by an organization in its marketing programmes and activities which will help to best achieve and actualize the mission, vision, goals and objectives within a certain period of time.
Four P’s Of Marketing
McCarthy popularised a four-factor consideration called the four Ps: product, place, promotion and price.
These are regarded as the variables under the control of an organisation which can influence the ratio or extent of customer’s level of patronage. It refers to the amount and kinds of marketing variables or tools that an organization uses to effect sales.
This connotes a broad concept that encompasses the satisfaction of all consumers needs in relation to a good , service or idea. It includes making decisions about customer service, package design, brand names, trademarks, warranties, product development, quality, feature and packaging.
It includes element of marketing decision which are made with a view to making and developing the right good or service for company’s customers. Strategies used to make a company’s product attractive and inviting to customers to promote and enhance patronage.
Price is the amount that is used to facilitate exchange. And of all the four p’s, price is the most sensitive one because customers respond more to price strategy than other three p’s. The following among others are the pricing strategies: least price, discount, payment period, credit terms etc. one of the factors that influence a marketer’s pricing strategy is competition.
Naturally consumers’ perception about the quality or inferiority of a product is on the monetary value or worth placed on it.
iii. Pricing Policies and Strategies
i. Discount: This involves the offer of reductions from a base price.
i. Cash discount: It means reduction I deduction accruing to buyers for making payments within a specific period.
ii. Quantity discount: It connotes discount reduction I deduction made to encourage) influence customers to buy in large quantity or bulk or wholesales.
iii. Trade discount: It refers to deduction given to the customers in payment for the marketing functions he/she is expected to discharge. Whichever strategy a marketer employs, pricing decisions should be tailored to meet the following conditions:
(a) support a product marketing strategy;
(b) achieve part of the financial objective of a firm;
(c) conform with the realm of the market environment.
iv. Place: This is otherwise refers to as distribution, time/possession utilities and they are conditions that enable consumers and business users to have products available for use when and where they want them.
It also connotes the network or distribution strategy which an organisation provides to make its product accessible to the prospective customers. Place or a distribution decision involves modes of transportation, warehousing, inventory control, order processing and selection of marketing channels.
i. From Manufacturer → Consumer e.g. food vendors and eateries
ii. From Manufacturer → Retailer → Consumer e.g. bread bakery
iii. From Manufacturer → Wholesaler → Retailer → Consumer e.g. industrial products
iv. From Manufacturer → Jobber → Retailer → Consumer
Factors influencing decisions on marketing channels
i. Number of customers
ii. Geographical location
iii. Purchasing pattern of buyers
iv. Nature of the products
v. Availability of resources (men, material, method, money, machine) etc.
v. Promotion: This relates to all marketing activities/efforts made to convince potential customers that the ‘right’ product is available at the ‘right’ place and at the ‘right’ price through publicity, advertisement, sales promotion and other promotion techniques.
It could also be described as any technique or strategy that persuasively communicates favourable information about a seller’s product to potential buyers.
The major/ main goal/objective Of every promotional strategy is to inform, persuade, educate, enlighten, orientate or remind the target audience about the availability of a product.
Promotion strategies could be employed to achieve the following communicating factors:
a. Communication as persuasion;
b. Communication as transmission of information;
c. Communication as personal expression, social interaction and relationship; and
d. Communication as a vital instrument of social and political change (Bordeariavo 1977).
Forms of Promotion Strategies
i. Publicity: This has been described as a technique or method of informing the public or consumer of a company’s product or service with a view to generating interest and creating favourable public opinion through extensive commendatory notices in press and on air.
ii. Sales promotion: The objective and target of sales promotion is to enhance and entice potential customers to purchase immediately. As put by Schewe (1987) “sales promotion is typically used at the point of purchase to motivate consumer to complete an exchange. It complements personal and mass selling efforts”.
According to American Marketing Association (AMA), Sales promotion refers to those marketing activities other than personal selling, advertising and publicity that stimulate consumer purchasing and dealer effectiveness such as displays, shows and exposition, demonstrations and various non- recurrent selling efforts not in ordinary routine”.
iii. Advertisement: This is a paid for, non-personal communication through various media about a business, firm, product, idea or services by an identifiable sponsor. Its intention is to persuade or influence members of a particular audience. Advertising primarily involves the use of mass media such as newspapers, television, radio, magazines etc.
iv. Public relations: This relates to how a company relates to its various public or customers. These publics include customers’, suppliers of raw materials, mass media, government, community where the business is located etc. Organs of public relations / communication components are:
newsletter, house Organs, bulletins, special journals, notice boards, company/official websites and wares, etc. Community Social Relationship (CSR) is a key Io component in corn munity relations.
Marketing environment relates to both internal and the external factors that affect an organization’s ability to develop and maintain successful transactions and relationships with its target customers.
Businesses do not operate in a vacuum; hence, decisions are made in line and response to changes in an organization’s internal (micro) and external (macro) environments.
Classification of Marketing Environment
Basically, marketing environment can be grouped or
classified into two groups, these are:
(i) micro environment
(ii) macro environment
i. Micro Environment:
This consists of an organization’s own influences, objectives and resources. Objectives provide direction for marketing decisions. It is made up of organizations immediate customers, competitors, clients, consumer. They can also be regarded as the stakeholders, shareholders, staff, staff relations and families of an organization.
Classes of micro-environment
a. Management members chairman, board of directors, senior and lower management staff.
b. Other members of staff – supervisors, clerks, admin officers etc.
C. Suppliers and marketing intermediaries.
d. Customer / consumer markets, industrial, reseller markets etc.
ii. Macro Environment:
This relates to a set of broad influences such as culture, demographic, economic, political, legal, technology, social.
Factors Affecting Market Macro Environment
A school of thought described marketing environment a “the marketing environment is based on the proposition that the external environment constitutes the ultimate constraint upon the firm and dictates the boundary conditions within which it must operate.”
Factors affecting marketing macro environment are:
i. socio -cultural factor;
ii. technology factor;
iii. economic factor;
iv. political factor;
v. legal factor;
vi. ecological factor;
vii. demographic factor;
viii. religious factor.
i. Socio-cultural factor:
This factor includes the economic, political and legal and technological forces. This connotes that people and their socio-cultural customs and belief are fundamentally and basically what shape and determine the economy, political-legal system and technology.
These factors affect how and why people live and behave as they do. These factors are essential because it has impact on the customer buying behaviour.
ii. Technological factor:
This connotes how the technological inventions, technical equipment and skills affect the way an economy’s resources are converted to output. Technology in the word of (Hill and Sullivan 1996) is a driving force for change in society and can be significant to marketer for a number of reasons: it can create better ways of satisfying existing needs, it can identify latent needs, it can enable new customers to be renewed, it can alter the patterns of demand, it can change the nature of competition in an industry and it can increase the efficiency and effectiveness of marketing activities.
iii. Economic factor:
People’s existence has no meaning to the environment they live if they do not have money and are willing to spend it. Marketing programmes are affected by economic growth, interest rates, supply and demand for money, price inflation and availability of credit.
In one words, economic factor influences the ability and willingness of individuals and organizations to perform transactions with a view to acquire goods and services they need, want and desire.
iv. Political and legal factors: Legislation, laws, economic policies made at all levels exercise a great influence on the marketing activities of an organization than any other indices. The following among others are the possible area of political and legal influences:
i. Provision of information and purchase of goods.
ii. Legislation specifically related to marketing.
iii. Government relationship with individual industries
iv. Broad social legislation and accompany policies set by regulatory agencies.
Equally, the reactions, attitudes and behaviours of people, social critics, public opinion makers, government etc among others affect the political environment, Customers/consumers in the same society usually hold a common and similar political environment which can also have an effect (negative and positive) at local, national and international eve.
v. Ecological factor:
According to Kotter (1980), ecological forces cover trends in the supply and cost of natural resources and energy problems of environment, deterioration and pollution control.
This natural environment according to Kotler and Armstrong (1987) consists natural resources that are needed as inputs by marketers or that are affected by marketing activities. The trends which ecological factor covers include: shortage of raw materials, increased cost of energy, increased levels of pollution and government intervention in natural resource management.
vi. Demographic factor: Markets are constituted by people who have money to spend and are willing to spend it. It refers to the statistical study of human population and its distribution characteristics.
Its relevance to marketing is that it affects production decision of what to produce, where to produce, when arid how to produce and for whom to produce.
End of lessons – SS1 Marketing 1st Term
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