Marketing Mix Can Maximize Profits
Marketing mix involves various marketing tools that a firm uses to develop objectives and marketing strategies in order to reach the target markets. It is also known as 4p’s concept which involves product, price, promotion and place. Another four important concepts of the marketing mix are the process, people and physical environment and performance.
MC Carthy developed this 4p’s concept to enable organizations to take business decisions and develop strategies; this concept is widely accepted and successful frameworks to maximize sales. Entering into the markets and developing new and innovative products is different from strategies playing for become successful in the competitive environment.
On the basis of product, price, promotion, and place organizations are developing business plans to get success in the business. Though there are many products and services which may be different or same, organizations are being survived by playing their own business strategies depending on this 4p’s and 7p’s concepts.
Products are referred as goods or services which may be tangible or intangible can satisfies the needs of the customers, here goods or services may be completely new and innovative or developing features to the existing products. Marketers take decisions depending on the nature, quality and features of the product; it benefits both, the organizations and customers. The product is the most important thing in the entire business process. So, designing and producing products according to the market conditions and changing needs of the customers are becoming a challenge to the marketers. If the organization is an existed and well established then also it faces challenges in the form of decisions regarding product mix, product lines and range of the product, etc. Even though there are many products and services in the markets, consumers purchase only a few products and services because of the brand image and loyalty which comes from the various business strategies such as product guarantees &warranties, CRM, product features, quality, packaging, labeling, after sales service, durability and reparability of the product, etc.
Another important thing in producing products and services in a successful way is by knowing tastes and preferences of the customers and fulfilling the unmet needs of the customers. Depending on the nature of the product marketers can use various strategies and decisions suitable for different levels of market segments such as mass, segment and niche markets.
The price represents the value of a good or service for both the producers and purchasers. Though there is a willingness to buy the product then also price becomes a major barrier in the case of many products. Pricing decisions are influenced by the various factors such as competitors, the cost of production, Government policies and tax etc.
Companies can fix higher prices for the new and innovative products but once substitute products enter into the markets then they have to find solutions like price discounts and offers, etc. so the price fixes should always be done by the aware of various pricing strategies like
- Absorption pricing
- Skimming pricing
- Penetration pricing
- Cost-plus pricing
- Odd pricing
- Marginal cost pricing
- Time-based pricing
- Variable pricing
- Loss leader pricing
- Price discrimination
- Destroy pricing
- Target pricing
- Pay what you want pricing
While fixing the prices, cost becomes the major influencing factor; many companies follow the cost of production such as variable costs and fixed costs to fix the prices. Some marketers set the prices by adding various costs such as direct raw materials costs, direct labor costs, and overheads costs to these costs they add a profit margin, so such pricing strategies help to create market during the initial stages also. Most of the online marketers set the prices by following strategies like odd pricing methods and time-based pricing methods. Depending on the nature of the product, stage of the product lifecycle and competition marketers follow different pricing methods.
The strategy of setting prices not only create sales, here discounts and payment terms should also be considered to maximize the sales. Pricing strategies should be fair and act as a competitive advantage, fake pricing strategies fade brand image and loyalty.
Promotion is the process of creating awareness through communicating the product features and its benefits to the target customers. Here communication may be in the form of various types such as personal selling, advertising, direct mails, sales promotions and customer relations, etc.,
Creating awareness about the product enables marketers to reach the desired goals within a short duration and in a more profitable way. Promotional strategies such as online, offline advertisements create sales and revenues; so, before delivering advertisements marketers must know about their target markets and for which market segment they should design advertisements. Once the marketers know their target markets then they can select the right communication channel to deliver the message.
Many customers stop buying particular products due to the fear of poor customer relations, so the organizations should know the importance of various promotional strategies to reach the desired goals. Proper customer relations maximize the customer loyalty and brand image, by using this strategy organization can introduce their products in a more personal way.
In 4p’s concept, the place is nothing but creating convenience to the customers to buy the product at a particular place or through a particular distribution channel. So the supply chain management and logistics play an important role in distributing the product from the producer to the consumer. Nowadays marketers are using online marketing as a platform to reach the customers in a more effective way; so they should have a clear knowledge about their product such as who will purchase the product? Where do they purchase? How frequently do they buy?
For example, if the product is fast moving consumer product then the marketers can use as many possibilities as they can to reach the end user. In the case, if the product is a premium consumer product then the marketers should identify the target markets to reach them successfully. Concentrating on decisions related to place enables the marketers to take strategic decisions such as better means of transportation, providing warehouse facilities and maintaining proper channels of distribution. With the increase in business and sales, 4p’s concept plays a major role in reaching potential customers to maximize the sales and profits.