COMMERCE Class-12 Chapter-14 MARKETING MIX MEANING OF MARKETING MIX In order to satisfy the needs and wants of its customers, every business firm must develop an appropriate marketing mix. Marketing mix refers to the combination of four basic elements which constitute the core of a company's marketing system. These four elements are the product, the price structure, the promotional activities and the distribution system (place). These four Ps are closely interrelated because decisions in one area influence actions in others. According to William Stanton, marketing mix is a systematic combination of four elements- product, price, place (distribution system) and promotional activities used to satisfy the needs of an organisation's target market(s) and, at the same time, achieve its marketing objectives. Marketing mix represents the total marketing programme of an enterprise. Different customer groups differ in their income, education, habits and preferences. They may respond to the same marketing mix in different ways. Therefore, marketing mix should be decided to suit a particular market. The basic purpose of marketing mix is to satisfy the needs and wants of customers in the most effective manner. As the needs of the sources customers change, marketing mix may have to be changed from time to time. Marketing mix is thus a dynamic concept. An appropriate marketing mix helps the enterprise to meet the present and future needs of an identified market and achieve its profit goals. Marketing Mix at a Glance 1. Product Mix : (a) Product range, (b) quality of the product, (c) brand name of the product, (d) packaging and labelling of the product, (e) after- sale service, (f) warranty against defects 2. Price Mix : (a) Price to be charged, (b) discounts and allowances to be offered, (c) terms of credit 3. Place Mix : (a) Channel of distribution, (b) distribution policy, (c) transportation, (d) warehousing, (e) inventory control 4. Promotion Mix :(a) Advertising, (b) personal selling, (c) sales promotion, (d) publicity, (e) public relations. PRODUCT CONCEPT Product element of marketing mix represents the tangible and intangible elements offered to the customer in order to satisfy his need. Product refers to a combination of various features relating to the product or service to be offered for sale. It involves decisions concerning the quality, size, range, package, brand name, label, warranty and services, etc. These product related activities are directed usually at a specific group of consumers (called target market) rather than at consumers at large. Consumers consider a product as 'a bundle of satisfaction' rather than as a physical item. For example, the buyer of a washing machine wants speed, comfort and trouble-free operation rather than just a box of metal, plastic and electrical components. Product is the most visible component of the marketing mix. In simple words, product means what a seller sells and what a buyer buys. It has been defined as anything that can be offered to customers to satisfy a need or want. It is offered for attention, acquisition, consumption or use by consumers. Customers buy a product or service for what the product or service does for them. For example, a person buys a car for transportation, comfort and prestige. There are three layers of benefits in a product: (i) Core benefit: It is the basic or fundamental benefit that the customer seeks in a product or service. For example, transportation is the basic benefit for which a car is bought (ii) Expected benefit: It is the benefit in terms of product attributes which the customer expects while buying a product. For example, fuel efficiency is the benefit expected by a car buyer. (iii) Augmented benefit: It means the additional features which the marketer offers in order to exceed customer expectations. Augmented benefit is offered to win customers in a highly competitive market. For example, a car seller may offer interest-free loan or free insurance. Customers have a wide verity of needs. Therefore, several types of products are offered by marketers to satisfy customer needs. Different Types of Product 1. Physical items - cars, televisions, shirts, soaps 2. Services Education, healthcare, banking, insurance, entertainment, transportation, warehousing, etc. 3. Places of tourism - Singapore, Dubai, Kerala 4. Experiences - cinema, meditation, multiplex 5. Ideas—'Don't kill the girl child' 6. Information -Internet Surfing Goods and Services Products are often classified into two broad categories as 1. Consumer Products: These products are used directly by the ultimate consumers and households. These are meant for personal use. Consumer products may further be classified as under: (a) Convenience Goods: These goods are purchased frequently and with minimum efforts. They are meant for personal convenience. Newspapers, cigarettes, tooth- paste, soaps, tea, etc., are examples of convenience products. (b) Shopping Products: These products are purchased after a comparative analysis of quality, price, warranty, etc., of competitive brands. Furniture, cloth, TV, fridge, washing machine, scooters, cars are examples of such products. (c) Speciality Products: These products are purchased with special efforts. Jewellery, fancy items are examples of these products. 2. Industrial Products: These products are meant for use in manufacturing other prod- ucts. Industrial products may further be classified as under: (a) Raw Materials: These are converted into finished items. For example, sugarcane used in manufacturing sugar and cotton used in producing cloth are raw materials. (b) Supplies: These do not become a part of the finished product but are necessary in manufacturing. Nuts, bolts, lubricating oil, paper clips, heating fuel and computer stationery are examples of supplies. (c) Installations: These consist of heavy machinery, factory sites, production lines, trucks and other items of high capital value. (d) Accessory Equipment: These comprise small lathes, portable drills and other items of low capital value. (e) Fabricated Parts: These are pre-produced items that become a part of the fin- ished product. Tyres for automobiles, laces for shoes, mouse for computers, etc. are examples of fabricated parts. Branding Branding is the process of assigning a distinctive name or symbol to a product by which it is to be known and remembered. It is the process by which efforts are made to make a distinct identity of the product. It is a general term covering various activities such as giving a brand name to a product, designing a brand mark and popularising it. A brand is a name, term, symbol or design or a combination thereof used to identify the goods or services of a seller and to differentiate them from those of competitors. Lux, Coca-Cola, Bata, Parker are examples of brands. A brand name consists of words, numbers or letters which can be pronounced, e.g., Safola, Maggi, Uncle Chips, etc. A brand mark refers to symbols, designs, marks, etc. which can only be seen but not pronounced, e.g., Guttu of Asian Paints, Devil of Onida. A firm may select any of the following brand name strategies: (i) Individual branding: Under this strategy, the firm uses a separate brand name for each product. The brand name of one product is not used for any other product. For example, Proctor and Gamble uses Camay for soap, Ariel for detergent, Head & Shoulders for shampoo and Old Spice for after-shave. The main advantage of this strategy is flexibility i.e. the firm can create a distinct image for each of its products. But this strategy is costly and, therefore, only few companies use it. (ii) Blanket family branding: Under this strategy, the firm uses one brand name for all of its products. For example, Philips, Samsung and General Electric use the company's name for all products. This is a very simple and economical strategy. A new product can gain instant recognition and acceptance in the market by using an established brand name. There is no need to spend time and money to educate customers about the new product. Samsung could make its mobile phone popular quickly because 'Samsung' brand name was already well known in India. However, when one brand name is used for several products, the meaning and sharpness of brand may get diffused. (iii) Separate family brand names: In this strategy, products are classified in different classes and a separate brand name is given to each class. (iv) Company-cum-individual name: Some companies use corporate name as well as individual product names for branding their products. For example, Britannia combines its corporate name with individual names for its biscuits. Britannia Good Day, Britannia Tiger, Britannia Cream Treat, Britannia Marie are some of its brands. This strategy combines the advantages of flexibility and economy. Trade Mark It means a brand or part of a brand that enjoys legal protection. The firm which gets its brand registered gets the exclusive right for its use. No other firm can use such name or mark in the country. For example, various products of LG Electronics carry the mark “LG”. A good trademark should be short and simple so that people can easily remember it. It should be distinctive and attractive. QUESTIONS 1.What do you understand by marketing mix ? 2.Define price mix. 3.Give the meaning of industrial products. .