The marketing mix is one of the most known elements of marketing – quiz most small business owners and they will be able to tell you that it’s all about the ‘P’s’.
Get them to name them and they will fire off three quickly, then struggle to get out a fourth – few get beyond that.
The marketing mix, or the P’s, outlines exactly what marketing is by breaking it down into its essential components. Most are familiar with a four P’s approach to the marketing mix – price, place, promotion and product, common in product marketing. However, services marketing has a whole other range of P’s to consider, including people, physical evidence and process, taking the P’s from four to seven.
For simplicity’s sake, the following overview has joined the goods and services P’s together to give a blanket seven P’s that work across physical goods and intangible services. Each of the P’s need a strategy and tactics attributed to them, which can be done once the overall marketing strategy and objectives have been set.
The 7 P’s uncovered:
- Place (incorporating process)
- Packaging (incorporating physical evidence)
Price is the only P that generates revenue therefore it is fair to say it is the most important one. There are multiple pricing strategies that you can adopt to drive the success of the marketing plan, and it is imperative to get it right.
Pricing strategies include, but are not limited to:
- Cost plus
- Competitor aligned
- Premium pricing
- Market penetration
- Bundle pricing
- Features based
Place (and process) determines how the goods and services will be distributed or made available for sale to the consumer. A strategy around place tends to fall into one of three areas; direct, indirect or a mix of the two.
- Direct involves the manufacturer of the goods and services selling direct to the consumer with no middle man.
- Indirect involves a third party such as a wholesaler, agent or retailer who distributes the goods or services on your behalf.
- A mixed strategy sees a manufacturer engage in both direct and indirect methods as a way of increasing distribution, choosing to sell direct as well as through wholesalers and retailers.
From a service based delivery, the quality of the underpinning processes in place will determine how good the customer experience will be. For example, hotel accommodation is bought and consumed at roughly the same time, therefore your experience with reservations, bookings, check in, room service and staff will rely on how good the processes around them function. Poor or half-baked process will result in poor service delivery and a poor customer experience.
Product, Packaging & Positioning
It makes sense to me that you would group these three strategies together as packaging and positioning relates back to the product (goods or services) and covers off the what, how and why of what you are taking to market.
- Product includes the detail around elements such as product features, design, quality, branding and configuration. These components should relate directly to what the target market wants, the benefits the product will deliver to them and the problem the product is solving. Understanding this will shape the products positioning strategy – see below.
- The positioning strategy therefore, focusses on how to best position the product to the market, how you want the target market to see you, what you want to be known for, and unless the brand is new to market, you will already have a basic brand positioning to align with. An example of a positioning strategy could be along the lines of ‘XYZ hotels is the luxury hotel & spa (what the product is) chain of choice for the discerning business traveller (who the target audience is) looking to experience the ultimate home away from home experience (what the benefit is)’. What you decide on here will shape your marketing communications through your promotion strategy.
- Packaging (physical evidence) relates to how the product delivery looks to the outside world, or the consumer. This relates to everything to do with the product including brand elements, retail location, staff uniforms, language, online systems and delivery as well as physical containers such as boxes, retail fit out or prospectus folders that hold the product. It all needs to align with pricing, promotion, positioning and place to deliver a cohesive representation of the brand and the product.
A lot of small businesses think that marketing only refers to promotion, but this is just one component of marketing. Ultimately, the promotion strategy needs to be developed around your overarching strategy, objectives, the target audience and importantly the budget. A promotion strategy could consist of; direct mail, advertising, public relations, sponsorship, online, social media, sales promotion or personal selling.
There is no point developing an awesome marketing plan if you don’t have the people in place to make it happen. People refer to anyone who in some way or another impact on the delivery of your plan, both internally such as sales and marketing staff and externally such as retail staff. Regardless of whether the place strategy is direct or indirect, it is worthwhile investing in staff training and development to ensure they deliver the best customer experience for your product.
Once the marketing mix strategies have been developed, the tactics to deliver them will need to be set – get this formula right and your plan is almost guaranteed to deliver.
Check out this post for more on strategic and tactical marketing plans.