Marketing Mix

Marketing mix is the combination of factors that affect a customer’s decision to buy something.

It consists of: Product, Price, Place and Promotion, which have to be all good and equally balanced, in order to satisfy customers’ needs and wants. The product has to be the one, which the customer wants to buy. The price has to be realistic, and the product should be worth of this price. The place where the product is being sold and distribution of the product have to be right and appropriate. Distribution of the products shouldn’t be too costly. For example, it’s better to have your factory near the raw materials or your suppliers, but it would be better to have your shop near the customers, unless you deliver the goods directly to your consumer.

However, different markets have different marketing mix. There are industrial markets, where one business supplies another with raw materials, machinery, service and everything else that is needed in order to provide certain products and services. In industrial market businesses have very few costumers. Usually they have distribution contracts for a certain number of years. Distribution of goods and services happens directly from manufacturer to consumer. In industrial markets distributors don’t advertise their products as much as they do in consumer markets, but make sure their potential consumers are aware of their products and services. For most companies in the industrial markets, the main aim of packaging is to deliver the product safely to its consumer. The design of the package doesn’t play a big role in this segment of the market. However, it has to be practical and have a package made of strong materials in order to protect the product from possible damages when transporting.

The branding though still plays a big role in industrial markets as it sometimes determines how successful the product will be. For example, if the company produces dry transformers it would look more attractive for the consumer, if they give their product a name, like ‘ExOn’ dry transformers. It is very important that the company makes a connection between the brand name and the actual product, so it’s the consumer has associations with the product when he hears the brand name. Businesses in industrial markets advertise their products in specialist magazines and exhibitions, because there are small numbers of people who are interested or working in this area. There’s a flexibility of prices and terms of supply. For example, the companies can make an agreement about the quantity of the products which will be supplied and its price. Usually, suppliers have special offers for consumers who regularly buy products from them. E.g. if the company buys more than 1000 units of a product a year, than it might receive a 10% discount on the products they order. In industrial markets you can sometimes see the chain of the distribution of the products.

For example, one company supplies several supermarkets with foods. Because supermarkets order in large quantities, they help its suppliers to get rid of the stocks. Because they buy everything in bulk, they buy it for relatively low prices. After this the supermarkets can then resell the products to the end user-their own customers and charge them more for each bought item. In this case, supermarkets don’t actually produce any goods. They order them from its suppliers and then resell them to the customers and make the money on the difference in price.

In consumer markets, businesses supply products and services to the end user and usually prohibit any reselling of their products. E.g. if you buy 6 packs of ‘Mars’ chocolate bars, you can’t resell it to the other people without permission of the ‘Mars factory’. Manufacturers do this in order to obtain price control and avoid other people charging higher price for their products. In consumer markets businesses have many costumers.

However, with some companies you don’t always have to buy their products from the supermarket. For example, it can be much cheaper to buy a mobile phone on the internet from the actual manufacturer, rather than buying it in the shop. It costs manufacturer money to transport his goods to his consumer (e.g. mobile phone or retail shop). Then the consumer charges higher price, because it sells one or very few items to the customer, it needs to cover the costs of running the shop and it also charges costumers for the name of the shop. The product becomes more expansive. But when the customer buys a mobile phone of the manufacturer, the phone is delivered straight from the factory. The costs of keeping the stock for the manufacturer decrease, so he can charge lower prices to its customers. But usually the distribution goes through warehouses and retail shops.

Branding, packaging and advertising play a bigger role in consumer markets, because businesses provide their products to the big number of people. This involves a lot of advertising to make most people aware, that your product exists. Businesses also need to make sure the packaging it practical, protects the product and makes it more attractive for the customers and helps to distinguish the product. Branding is very important in this area of the business, because there are a big numbers of firms which produce similar products. In order to differentiate the products and make their products more popular, businesses make slogans and names for their products, which are easy to remember, and which remind the costumer about the product.

Businesses advertise their products in mass media, targeting all different groups of people. E.g. businesses can advertise their products in popular magazines as well as in specialist ones. They can also advertise their products on TV and radio, because they target large groups of people. Terms of supply and price are usually fixed. Manufacturers can sell their products for a lower price to their consumers. However they make an agreement between the manufacturer and consumer, that consumers can’t charge a higher price to the customers than the one, which was agreed.

Sometimes the prices may be decreased by the retailers. E.g. during the Christmas period, they may introduce special offers and discounts.