Most business school graduates are familiar with the term marketing mix. It refers to the different tools a company uses to effectively promote its business in the marketplace. These are often separated into what is known as the four P's of marketing: product, price, placement and promotion.
Product refers to the actual, physical item that a company is trying to sell to the consumer. Marketers usually do not focus on product development as much as product presentation. Therefore, the marketing mix in this stage should consist of the name of the product, its packaging and how it will be differentiated from similar products in the store.
Price is how much the company will charge consumers for the product. Typically, a lot of thought goes into pricing because setting a price too high can result in few sales. There are also dangers in setting a price too low, since such a price may make potential customers think the product lacks quality. Marketers use this knowledge to help determine price so that profit is made from the product. The marketing mix may also include special pricing incentives, like coupons.
Promotion is how the company spreads the word about a product. It involves working with stores to distribute samples, holding public relations events, and buying advertising — in the print media, the broadcast media or both. The role promotion plays in the marketing mix depends on how much the company wants to publicize the product and how much money it has set aside to do so. Today, the Internet is also a market for product promotion, and online campaigns can be fairly inexpensive yet effective.
Placement is the art of putting the product in the right place at the right time. Proper placement is important, so that the consumer will see the product and want to have it. This is part of the marketing mix because marketers must attract retailers and get high-profile space in those stores, if they want their products to sell well. Placement can also involve determining, and reaching, a specific target audience. For example, a company that sells paint may set up a sales booth at a home improvement show in order to reach people wishing to learn about and buy paint.
The marketing mix is unique to each product or company. It often depends on the goals the organization would like to accomplish. This can range from selling as much product as possible to cultivating a reputation for making high-quality products.