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Directions for identifying your own advantages in the marketing mix. Marketing complex (marketing mix)

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"4P" concept

The 4P concept was formulated by Professor Jerome McCarthy in the 1960s. It has become one of the basic theoretical developments in the field of marketing, which is now studied in all business schools. Initially we were talking about 4P, now there are concepts in which the number of elements is growing: 5, 7, and even 9.

Below we will talk about the “basic” 4 Ps of marketing. But first, I bring to your attention a not very long video, which clearly shows the interconnection of all the elements discussed below.

So, the components of marketing (“marketing mix”):

1. Product

In marketing, a “product” refers to a service or product created to satisfy the needs of a specific group of consumers. The product can be tangible (goods) or intangible (service).

As mentioned above, in order for a product to successfully develop in the market, it is necessary that it meets the requirements of the market and consumers.

For this reason, even at the stage of developing a new product, marketers need to calculate “ life cycle product." To put it simply, they need to understand how the product will behave in the market and how the market will perceive it in each period of development.

The life cycle includes the following phases:

market introduction phase (market entry, meeting consumers);
growth phase (gaining share, emergence of regular consumers);
maturity phase (achieving stable sales volumes and shares);
stagnation phase (sales decline, reduction in the number of consumers).

In order for a product to behave as predictably as possible when developing a product or service, marketers need to find answers to the following questions:

What will the client receive as a result of purchasing a service or product?
How will the consumer be able to use the product?
Where will the product be used?
What qualities does a product need to have to satisfy consumer needs?
Are there any must-have features of the product. which were missed?
Are there redundant features that the consumer does not need?
What will the product be called?
Will the name be remembered by the consumer?
What species will form product line(colors, sizes, service packages)?
How will the product differ from competitors?
What will the product look like?

2. Price

Price is what a consumer must pay for a product in order to receive it.
The price is extremely an important component marketing (marketing mix). Marketers need to calculate it with particular accuracy.
The importance of price lies in the fact that it determines not only how much a manufacturer will earn from selling his product, but also whether the manufacturer can survive by selling the product at the price that the market accepts.

If a company is just entering the market, without a formed image or loyal consumers, then it will be very difficult for it to compete with existing players with a higher price. And even if in the future they will pay much more for its product than for the product of its competitors, setting a high price at the very start is rather a rash step.

On the other hand, you should always remember that price is one of the obvious parameters by which the consumer forms his impression of the product. And if your price is significantly lower than that of a competitor, the consumer may assume that your product has significantly more low quality. The high price should be based on higher quality.

Determine the correct price at which New Product will sell at launch, one of the most difficult tasks marketers face.

When launching a new product, marketers must understand how much the consumer is willing to pay for what the manufacturer wants to bring to the market. Depending on what product is being launched, one of three main pricing strategies can be chosen (in fact there are many more):

Market Penetration Strategy(penetration pricing strategy, low price strategy), when a new product gains market share and consumers due to a lower price than competitors. In the future, the price may increase. This strategy is very actively used in the FMCG sector. Allows for the formation of a sales market due to low margins. It may be unprofitable in the first stages, but it begins to make a profit after a certain market share is occupied and loyal consumers appear who make repeat purchases.
Skimming strategy(skimming pricing strategy) when a new product (often unparalleled on the market) is offered at an inflated price. In the future, as the market becomes saturated or the trend changes, the price can be significantly reduced. Most often, this type of strategy is implemented in the mobile electronics market. Allows the manufacturer to receive maximum income from the very beginning of the launch and recoup the production in the first stages of sales.
Neutral Pricing Strategy— a conservative strategy that involves gradual penetration into the market.

Below are a few questions that a marketer must answer before setting a price for a product and launching it for sale.

How much will it cost to produce a new product?
What price does the consumer expect?
Is it possible to significantly increase market share by slightly reducing the price?
Is it possible to set the price at the same level as competitors?

One of the most famous and popular marketing concepts is the 4Ps (Pi) or the marketing mix concept. This idea dates back to 1964 when Neil Borden published his article “The Concept of the Marketing Mix,” in which he attempted to combine all the elements that need to be considered when drawing up a company's marketing plan. Initially, such a plan contained much large quantity points, but Nel managed to reduce their number to 4 and make them easier to remember. This is how the 4P complex appeared. In the future, this complex will be expanded to 5, 7 and 10 Pi. The marketing mix complex combines those factors that a marketer can influence. A strategy developed based on the 4P concept should increase the perceived value of the product or service being offered.

The basic model includes: cost, product, place of sale and promotion. Let's look at them in more detail:

Product - Product

A product is a product or service that a company offers to its customers (both potential and existing). This is the basis of the 4P concept; it is from this stage that the development of a marketing strategy should begin.

Determine what functions your product will perform? What is its unique advantage? Determine how high quality your product will be? For different categories of consumers, the quality indicator will be measured differently, for example, it is important for one consumer that the carrots are smooth and clean, while another judges the quality by the region where the crop was harvested. Determine how wide the range will be and what the service will be for the end user.

Product branding also applies to this section of the concept. It is necessary to develop a name that can be registered and protected, develop a logo and corporate identity. The packaging of the product is no less important; it must stand out among competitors, but not be too original, otherwise the consumer may simply not see it, even if he is purposefully looking for a certain product.

Price - Price

Price not only affects the profit the company will receive, but also the consumer's perception of the product. If the price charged is much higher or much lower than expected, this may negatively affect the purchasing decision and reduce consumer confidence.

The company's pricing policy determines in which price segment the product will be placed. This directly affects consumer perception. Pricing directly influences the market entry strategy.

When setting prices, you need to think about different pricing tactics for different sales channels, for example, you can set special discounts on volume or offer a special price for a certain set of goods, such a “package” offer will also allow you to cope with mis-grading. It is equally important to take into account the prices that are planned to be set for the duration of various promotions (if the company plans to hold them) or determine the conditions of promotional events.

Place

This component of the marketing mix examines the product distribution model. The product must be not only in the right place, but also at the right time so that the consumer decides to buy it.

It is necessary to determine the geography of the product and planned expansion to other markets and territories. No less important are the channels through which the goods will be distributed; it is necessary to provide for the rules of display, its size and fines for dealers in case of violation of the requirements. Determine how much goods need to be kept in stock in case of force majeure.

Promotion

This section includes all kinds of marketing communications. They can be aimed at both informing consumers about products, creating or adjusting their image, and creating a need for purchase or re-purchase.

This section determines the desired promotion strategy (push or pull). The communications budget and the planned share of the brand’s voice in the overall flow of advertising messages are determined. The result that is planned to be achieved as a result of the promotion is determined (it must be expressed in specific figures, for example, the expected market share or an increase in customer loyalty by 10%). Communication channels are selected, necessary events are planned that the company plans to organize or in which it is necessary to take part. A media strategy and plan for holding promotions and other promotional events are being developed.

Marketing Rozova Natalya Konstantinovna

Question 18 Marketing mix concepts

Answer

Marketing mix– a set of practical tools for adapting a company to the market situation and measures to influence the market. Nice complex Marketing helps the company gain a strong market position. The term “marketing mix” was introduced in the middle of the 20th century. N. Borden.

Classic marketing mix includes 4 elements and is called "4P models"(by first letters of elements):

Product;

Price;

Sales or product distribution (Place);

Promotion or communications (Promotion).

In marketing theory, the elements of the marketing mix are often considered as independent subcomplexes that have own strategies and politics (Table 12).

Table 12Tools of the components of the marketing mix

Other marketing mix models are given in table. 13.

Table 13Marketing Mix Concepts

However, at the end of the 20th century, after the emergence of the concept of “value chains” (internal and external consumers), reports appeared among marketers about a new expansion of previously existing models. In 1999, D. Balmer published the “UR” model (Fig. 13).

D. Ballmer named a new expanded marketing mix corporate marketing mix.

The “UR” model, or corporate marketing mix, contains the following elements.

1. Philosophy - the philosophy of the organization - ideas supported and developed by the company.

2. Personality – individuality or personalization – a complex of subcultures existing in an organization, necessary to maintain the philosophy of the organization.

3. People – people – the company’s personnel (an element borrowed from classical models of the marketing mix).

Rice. 13. Model « 10R » marketing mix

4. Products – products are the main element of any marketing mix model.

5. Prices – prices are an element borrowed from classical models of the marketing mix.

6. Place – place – sales or product distribution (an element borrowed from classical models of the marketing mix).

7. Promotion - promotion - a complex of marketing communications (an element borrowed from classical models of the marketing mix).

8. Performance – execution – assessment of the organization’s activities by interested groups and individuals in accordance with the stated philosophy of the company and in relation to competitors.

9. Perception – perception is the mental image of the organization, corporate reputation, reputation of goods and professional reputation of the company’s employees.

10. Positioning - positioning (both the company itself and its products) - firstly, in the minds of the most significant interest groups, secondly, relative to the company's competitors, thirdly, relative to the external environment.

Old ideas are gradually becoming obsolete and need to be filled with new content. One of the creators modern technology integrated marketing communications R. Lauterborn replaced the traditional model "AR" characteristic of the period of mass consumption, to the “4C” model, more adequate to the current level of development of an intensely competitive and segmented market. The elements of this model are:

Consumer – consumer, his needs and desires;

Cost – consumer costs;

Convenience - ease of purchase;

Communication – communication with the consumer.

From what has been said, it is clear that the question of how many Ps (A or C) the marketing mix model actually consists of is meaningless.

It must be remembered that the main task solved with the help of the marketing mix, no matter what model it is described, is to ensure sustainable competitive advantages of both the goods offered by the company to the market and the company itself as a whole.

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marketing mix target market

Marketing-mix 5P concept:

1) Product, the company’s product policy (product marketing ) -- market-oriented marketing policy for the formation of an assortment of goods (products and services), their commodity and consumer properties(quality), as well as packaging, branding, naming, image trademark etc.;
2) Price, company pricing policy (price marketing) - a market-oriented pricing program: development of the level and behavior of prices, mechanisms of price influence on customers and competitors, price methods of sales promotion;
3)Place place and time of sale, product movement and distribution (sales marketing) - selection of optimal sales channels and resellers, organization of storage and transportation of goods (logistics);
4) Promotion, product promotion (marketing communications) - a system of informing potential customers, creating a positive opinion about the product and the company through a variety of sales promotion methods (advertising, service, etc.);
5) People, manufacturers and suppliers, sellers and buyers of goods (relationship marketing) - mechanisms of interaction between subjects of market relations (manufacturer - seller, manufacturer - supplier, seller - buyer); development of the company’s personnel policy (selection and training of personnel focused on the client and the company’s goals); generating potential clients. As a direction of marketing activity, it appeared relatively recently as an addition to the existing “4P” concept.

Model 7P: a more modern, improved “4P” concept, supplemented with elements:

1) People - manufacturers, suppliers, sellers and buyers of goods (relationship marketing);
2) Process - processes for providing services;
3) Physical evidence - physical characteristics.

Model 4C: the 4P concept evolved towards the consumer:

1) Customer value needs and wants - the value, needs and requests of the consumer;
2) Cost - costs (expenses) for the consumer;
3) Convenience - accessibility (convenience) for the consumer;
4) Communication - communication with the consumer.

Originated back in the 60s. and was widely developed in the 80-90s. last century, the concept of “4P” was subsequently improved. Being today the core concept in matters of organizing marketing at an enterprise, this concept is nevertheless more focused on tangible rather than intangible goods (i.e. services). However, the effectiveness of its application by most organizations is so obvious that it should not be considered it would not be very reasonable in relation to hospitality enterprises. Table 1 shows characteristics each element of the integrated marketing concept “5P”.

Table 1

The essence of the marketing-mix concept “5P”

Product	The implementation of product policy is based on the production and sale of goods (products and services) in demand modern market. It is achieved by focusing companies on the needs and requirements of customers (both their own and potential ones). In this regard, there is a need to implement a competent assortment policy, the purpose of which is to maximally satisfy the needs of customers and their preferences, which, in turn, should help attract new consumers. The life cycle of goods also becomes important. Within the framework of product policy, it is necessary to subtly capture modern market trends and respond in a timely manner to its changing conditions. The products manufactured by companies and the services they provide must always be in demand, relevant and timely. This will allow not only to maintain, but also to significantly increase the share occupied by the organization in the market.
Price	In modern market conditions price is a fundamental factor at the stage of consumer decision-making regarding the advisability or inexpediency of purchasing a product. The process of managing pricing in an organization is extremely complex and time-consuming. There are a number of parameters that need to be considered when developing an effective pricing strategy. First, it must be carefully planned. Secondly, it is necessary to take into account the peculiarities of the production of the product itself (its cost, market position; place and time of sale; pricing policy of competing companies; specific features potential buyers, etc.)
Place	The concept of “place of service provision” acquires paramount importance, since it is considered from the perspective of the reach of services to consumers. Managing this variable in the 5P concept allows companies to achieve the most effective coverage target audience by properly locating its branches and providing them with everything necessary for better provision of services.
Promotion	Promotion is any form of communication used by organizations to inform, persuade or remind consumers about their products (products and services), their advantages and benefits. This includes the entire range of activities to promote products and services. Promotion includes: advertising, public relations (PR) activities, direct marketing, propaganda, sales promotion activities, personal selling, etc. Since the quality of services largely depends on the people providing them, in order to attract consumer attention, it is advisable to place emphasis on only on the services themselves, but also on those specialists who work in this company and are involved in its development and provision. This is especially true for hospitality companies involved in consumer services population (hairdressers, beauty salons), medicine, restaurant business, entertainment, etc.
People	This multifaceted component (also called “relationship marketing”) appeared relatively recently: in the 90s. last century. This component organically complements all four previous elements of the concept. Without such a component as “people” (and in the market these are not only producers and consumers, but also buyers and suppliers), it is impossible to implement any of the four policies presented in the table: neither product, nor pricing, nor distribution, nor communication. In such conditions, management by human resourses becomes a priority strategic objective of the organization. Marketing and management of the company are faced with the task of creating an organizational (corporate) culture that is consumer-oriented. The term “people” is used in the marketing of services and to refer to the activities of managing the client base, resolving issues of streamlining and distributing visitor flows. In the b2b sphere, relationship marketing contributes to competent and effective contacts with potential partners and negotiations with them.

Some limitations of the presented model due to its poor adaptability to the non-material sphere of activity led to its expansion from “5P” to “7P”. Thus, the “7P” marketing concept included two more components that are important practical significance for the service sector (Table 2).

table 2

Improved marketing-mix concept (“7P”)

Process (service delivery process)

The degree of consumer involvement in the processes of production and provision of services is much higher than in the production of material goods. In addition, the provision of services and their consumption, in comparison with the spheres of material production, occur simultaneously. Given the existing inextricable relationship between the processes of provision and consumption of services, the degree of contact between producer and consumer may be different. So this element in the concept marketing-mix called upon to devote Special attention procedures for interaction between consumers of services and organizations providing them.

Physical evidence (physical environment of the service)

It includes all those tangible objects and visual images that allow a potential consumer to evaluate and predict the quality of a future service. The practical application of this element allows organizations to form their own stable and positive image in the eyes of clients. To achieve this goal, companies need to take measures to improve the level of service and quality of service for their customers.

It is this marketing model that most closely corresponds to the intangible sphere of activity, well reflects the specifics of services and can serve as the basis for the formation of an integrated marketing policy, including the main components given below. Thus, two additional element to the existing “5P” concept (taking into account the “People” component attached to it) justify the need to study the “4C” model as the most customer-oriented. This concept is usually applied in cases where it is no longer marketing as a whole that is considered, but only those of its tools that are capable of generating consumer sympathy and interest. Therefore, in his works, one of the founders of modern marketing, Philip Kotler, interprets this model as follows: “The “4C” concept, where the product is comparable to the value for the consumer (Customer value), the price is comparable to the consumer costs (Customer costs), the place is comparable to availability of the product for the consumer (Customer convenience), and promotion - with consumer awareness (Customer communication).” Proposed in the late 80s. last century, Columbia University professor R.F. Lauterborn, the 4C concept gained great popularity due to its customer focus. Having reoriented the marketing mix from “4P” to “4C”, Lauterborn received the following model (Table 3). As a result of a detailed analysis of the presented model, the reasons for its particular popularity among service sector enterprises become obvious. The service is intangible, which means that the organization providing it has to use all its skill and skill so that the potential consumer turns to it for services and not to competitors. Without having time to fully take shape and adapt to the scientific environment, the “4C” model almost immediately received recognition and its further development. In the 80-90s, when the main markets became saturated and competition intensified noticeably, the manufacturer was forced to conduct research on consumer preferences in order to successfully fight for its customers, preventing them from switching to competitors.

Table 3

The essence of the 4C concept

Customer value, needs and wants (customer value, needs and requests)	This is literally every component of a product (product or service). This element justifies the need for a more thorough study of consumer preferences, and is also closely related to the correct perception of its target audience.
Cost (costs, costs for the consumer)	As in other areas of activity, costs are divided into direct and indirect. Direct costs include primarily material and financial costs, while indirect costs include costs of a psychological, temporary and other nature. In other words, costs include not only cash spent on a product or service, but also the effort associated with its acquisition: how ready a potential client will be, having spent time and some effort, to come to a specific company and purchase from it certain types of goods (products and services).
Convenience (availability for consumers)	For the consumer, the product must be in the right place at the right time. The indicator of product availability for the client implies that it must not only satisfy a certain basic need (for example, rest, food, travel), but also carry a number of additional benefits and benefits intended for potential consumers. Therefore, it would be more correct to use the term “Value” instead of the term “Convenience”, which has already partially found its reflection in this model.
Communication	This element justifies the level of consumer awareness. Consumers must not only hear about a particular product, but also be sufficiently aware of it. significant characteristics, the benefits obtained from its acquisition and further use, as well as availability and other advantages compared to similar products of competing companies. This will largely depend on the effective marketing communication policy of the enterprise, which includes a wide range of various tools: advertising, PR, direct marketing, sales promotion methods, etc.

This model actually justified the need to create all kinds of consumer loyalty programs. It is aimed at its consumers - at their desires and preferences, at joint fruitful cooperation and the inevitable receipt from them feedback in order to further improve our products and services, as well as the mechanisms for their promotion.

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Directions for identifying your own advantages in the marketing mix. Marketing complex (marketing mix)

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