Understanding Marketing Mix: Exploring the Elements and Variations

Introduction

The concept and the possibility of success of business are based on the right application of the marketing strategy. The marketing mix is essentially the model of foundation for any business and it is comprised of four P’s – product, price, place and promotion. However, in some marketing mix strategy, the number of ‘P’ differ from one business model to another i.e. some business use the marketing mix strategy of 5P’s and some use 7P’s as well. Also, there are business models that use 4C’s model to execute their marketing mix tool herein. The number of ‘P’ or ‘C’ (customer needs, customer costs, convenience and communication) of the marketing mix tool essentially depends on the goals of the business model and what are the target customer bases of that business herein. For businesses looking for effective strategies, seeking business dissertation help can provide the best insights into optimizing their marketing mix. With the help of the marketing mix tool, a business is expected to create a balance between all of the elements and all of the elements must be looked after with utmost care. If one of the elements goes high or low than the other elements, the marketing mix strategy shall not work. For example, an excellent product with poor distribution will ultimately fail at flourishing in the market.

In this essay, we shall discuss about the simple model of 4P’s in a business model and explain what the roles of Price and Place are in the marketing mix tool and examine the same with the help of simple 4P’s conceptual theory herein. Also, we shall include and assess how Price and Place contribute to a business of a food joint herein.

The 4 ‘P’s of the Marketing Mix Tool

As it has been mentioned earlier, the four P in a marketing mix tool stands for product strategy, price strategy, place strategy and promotional approach. Even though several other approach of ‘P’ marketing mix has come into surface, the 4P model postulated by McCarthy (1964) is the oldest model in the marketing mix tool and for simple business foundation model with no chain centers or franchise herein, the 4P model is the ideal model to start off any business marketing from the basic level (Borden, 1984).

Thus, as it has been postulated and explained by McCarthy (1964), the four ‘P’ in marketing mix essentially includes the internal and the external factors of a goods in a business model and the interact between these 4P decides the future of a business as well. Also, these 4P’s (Fig. 1) are used in a business foundation to identify the basic key factors before starting out a business and it helps enormously in researching the target audience of a product as well. It helps an entrepreneur to understand the basic requirement of a business, the target customer base, the expectation of the targeted customer base and the position of the competitors herein.

Fig 1: McCarthy’s Four ‘P’ Marketing Mix

For example, if anyone examine the marketing mix of McDonald’s and Wendy within the global market, it might seem that both of them have the same marketing factors and both of them target the same customer base herein but they are not considered as rivals – why? While McDonald’s and Wendy’s might seem to have the same marketing mix tools, they target very different audience. From the product strategy and place of McDonald’s, it is clear that McDonald’s thrives to target the parent customers who have little children with them, but Wendy’s only arbitrarily targets the adult customers and children are not on their strategy herein (Kotler, 2000).

Developing a Marketing Mix – the role of ‘Price’ and ‘Place’

It is true that a marketing mix essentially has four ‘P’ or 7 ‘P’ or 8 ‘P’ in order to decide and conclude a complete picture of a business model, the role of Price and Place are constant in every model. Even in the case of 4C’s concept postulated by Shimizu (1989), the position of Price and Place are constant. Thus, in this segment, we shall discuss the role of Price and Place with reference to necessary theories herein.

Price Strategy

The pricing strategy of a product is essentially linked to the demand of the product in the market and how the product shall be received by the target customer base herein. Prince is one of the essentials of the 4P or 7P strategy and if the price is not right, the product shall not have any chance at succeeding at the market. If the price is wrongly calculated in a marketing mix, the target audience will change and so will change the foundation of the business model herein (Harvey, 1996).

In the segment of pricing strategy, people might have the wrong idea that ‘lower the price, higher the demand’. However, this approach is completely wrong. For example, if you business foundation is based on luxurious products, you must set your prices 1000 percent higher than the cost of the product or else the price range alone will repel the high valued VIP customer base (Blyth, 2009). Again, in the case of service business model such as food joints, you must keep the prices at such a level that the average customer base can afford it. However, such approach will not work for gourmet food and fancy restaurants herein (Fig. 2).

Thus, the term ‘Price’ in marketing mix tool can be defined as the only key variable that will set the value of the firm and also calculate the revenue of the business joint as well. Also, it includes

“consideration for customer perceived value”. In order to keep the ‘Price’ variant active in a business model, several pricing strategy and pricing tactics can be adopted by an entrepreneur. Some of the famous pricing strategy or tactics are providing discounts to the customers and considerable allowances or rebates to the distributors and the variety of payment modes such as credit, debit, and cash or via digital payment etc.

Also, with reference to the 21st century online shopping, the pricing strategy has changed to a certain degree as well. With the virtual world flourishing by a greater margin every day, the pricing strategy has been eased as well. The entrepreneurs can put much relaxation on the pricing strategy as it is easier to announce a sale over the Social Medias and it does not need much time to be known by the target audience. Also, without the physical store rents and warehouse expenditure, the digital pricing strategy has seen the era of flexible pricing as well (Bhatt & Emdad, 2001).

Place Strategy

The place or the distribution strategy is another key essential to any business model that works on 4P marketing mix or 7P. The place of distribution essentially means the flowing of your product from you to the targeted customer place. It does not matter whether you have all other marketing strategy perfect, if the place of distribution is not perfect, your business model shall definitely fail. Place strategy does not only include the place of the physical store but it also includes the storing location, supply chain management, inventory and control system. The place strategy essentially controls the transportation costs of your business and thus if the place strategy is not taken seriously enough, a business model can drain out despite having the right product, price and the promotional effect (Fig. 3). In the case of place strategy, one important aspect is to decide which retailing or wholesaler shall control which of the geographical area. (Quelch & Jocz, 2008).

Fig. 3: Place Strategy

For example, Avon has direct sales representative who sell the products directly to the customers and the customers are not needed to come to particular place. Again, Revlon uses distributive channels to sell their products and their targeted customer bases come from these places herein. Redken sells their products through hair salons. Thus, the place strategy is not only the presence of the physical store but it also essentially includes the presence of distributors and supply chain management as well.

While it may seem that place has become quite obsolete in the case of online shopping and virtual customers base does not need to know the place from where a business is conducted, it is the not true. The physical storing place might have gone a little obsolete but the other supply chain management, warehouse and transportation system still remains the same. The digital business mode has essentially forced entrepreneurs to link place with promotion herein (Dominic, 2009).

Price and place strategy for a Food Joint

For the purpose of this essay, we shall critically analysis the pricing and place strategy of marketing mix of a business model. In order to conclude such strategy of marketing mix, the example of Food Joint business has been taken and therein we shall apply the abovementioned price and place strategy in the case of a food joint

Characteristics of the Chosen Food Joint

For the purpose of better analysis with respect to pricing strategy and place strategy, the characteristics of an imaginary food joint have been mentioned herein.

The chosen food joint is a fast food joint, serving burgers, sandwiches, fries etc.

The fast food joint strives the serve the school and the college students and targeting the age of 14 to 25.

The chosen food joint shall target the average customers who look for cheap food joints with good quality snacks and combo meals.

Quick preparation timing with a fast serve system

Pricing strategy of the chosen food joint

Considering the abovementioned fast food joints and its given characteristics herein, it is to be considered that the basic clientele of the food joint will be the students who survive on their pocket money or some of them have part time jobs beside their college studies. This clientele strive to get a bite from a fast food joint that is cheap and does not take much time to prepare the food, so that they can have a snack in between class. Also, discounts work as the best bait on this student clientele herein.

Thus, the pricing strategy with reference to the chosen fast food joint adapt to the following steps:

1. The chosen fast food joint, targeting the student clientele strives to be the ‘Quick Serving Restaurant’ (QSR). Thus, the GMV or the Gross Margin Value of the fast food joint must not exceed the profit margin of 45% to 50%. (Herein GMV stands for = Total Revenue – costs of the goods sold/ Revenue) (Kiefer, Kelly & Burdett, 1994).

2. The menu of this chosen fast food joint must use relative pricing i.e. make your menu in a way to put all the same pricing products under the same catalog. Thus, arrange the menu of your restaurant according to the price and not item wise. Also, it is not wise to use any exotic ingredient dish as the main customer base is the students.

3. The best way to strategize the chosen fast food joint is to have ‘part pricing’ and ‘combo pricing’. As the basic clientele of this chosen fast food joint is the students, it is best to have part pricing for any added ingredients. Also, combo meals are always a hit amongst the students who like to have their lunch or dinner at a cheap price. This is also called the complementary menu pricing and this approach is the perfect marketing strategy to attract the most of the students.

4. Also, the pricing strategy of listing ‘good, better, best’ on the menu works pretty well with the students as well. The triple pricing strategy often works with an added extra item such as the good price might only give a sandwich or a burger, while the better will add a salad or a fry next to it and the best price shall add a desert and a soda with the previous two items. This maximizes the sale of the products in a fast food joints herein.

5. In fast food joints, coupons and vouchers work like crazy for the student clientele. The issue of ‘Happy Hours’ or certain coupons and vouchers always work best with the students who are always seeking for a discount.

6. The nature of the chosen student clientele must demand for a different payment system. The fast food joint can opt for a student card through which they can pay and have monthly added bonus or extra free meal. Also, it is quite unexpected for students to carry a credit card, thus cash payment should be the primary aim. However, in the age of digital payment, the fast food joint must have good digital payment schemes as well.

Place strategy of the chosen food joint

As it has been mentioned that the chosen fast food joint shall mainly focus on the student clientele, the place strategy of the fast food joint should be kept in mind as well. The students often seek to have a bite from a joint which resemble the cafeteria space of their school or college and they prefer a place with free space, minimal sitting area where they can hang out with their friends. Thus, keeping the characteristics in mind, the place strategy of the given fast food joint must have the below mentioned features:

1. The fast food joint must have a free space and a take your own meal from the counter service like McDonald’s, KFC or Starbucks. As it is a QSR or Quick Serving Restaurant, it would be easier for the owner to have better efficient service with minimal waiter in this way (Thomadsen, 2007).

2. The place of the food joint must be near a school or college i.e. across the street from a school or college. Also, for better place strategy, the fast food joint can franchise their joint to be set up inside the school or college cafeteria as well.

3. The place shall have minimal sitting area and several standing area to have the food as well. The chair and tables must not be too fancy for the students and resemble the normal cafeteria settings herein.

4. The place must have a TV to entertain the students and might include a small gaming sector or book centre for the students to hang out more and order more. Also, to attract more of this age group, a themed fast food joint might be a good idea as well.

5. The location choice must not be too remote. It should be well located within the city as the urban students often go for the fast food joints and the Quick Service system herein.

6. Being a QSR, the chosen fast food joint will not work according to reservation process. It will solely work on the system of first come, first serve basis. The place can include an outer sitting area for better accumulation of people.

7. The student clientele are mostly on Instagram. Thus, the food must be instagrammable i.e. they must be served on cute plates or cute and cheap cups. Also, the chosen fast food joint can include a photo corner where the students can go and have their instagrammable photos taken.

Conclusion

Thus, in order to have the proper effect of the marketing mix, any business joint must focus on the working of the price and place first along with their promotional and product strategy herein. However, pricing strategy is the basic of all business joints, especially the one has been chosen here.

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