Marketing Mix Essay Example | Topics and Well Written Essays - 1000 words - 1

Marketing Mix - Essay Example "On this path the business grows either by logical extensions of the existing product line (new performance levels, and added features or services) or the addition of related products" (Day 320). If only life was as simple as that. The marketplace is dotted with products that have fallen on the wayside. Product development involves a lot more than the whims of a few people within the organization. Prahalad and Ramaswamy claim that it is the customer who has the competence to create value. (Prahalad and Ramaswamy 81) "Price is the marketing mix element that produces revenue; the others produce costs" Kotler 456. The way a company prices its products depends on what its wants to achieve through that policy. The pricing objectives that companies usually want to achieve through their pricing However price is not a sustainable competitive advantage. Whatever the advantage that a company may accrue from its pricing policy, that does not usually result in sustained competitive advantage. When price is used as a tool for competitive advantage, it is usually low price. And low prices often trigger price wars. And invariably the victims of every price war, are the companies that used low price as a weapon. An instance is the "airline price wars of 1992" (Rao, Bergen and David 107) Place; one of the elements of the marketing mix, is a marketing tool from the organization's perspective. From a customer's point of view, place is seen as convenience. "Place" in the marketing mix refers to how a company makes its products available to customers. The primary consideration here is customer convenience. There are myriad ways in which a company can distribute its products. A company can take its products directly to customers or use the services of channel partners. There are several factors on which distribution decisions depend. One reason for the success of online grocery stores is convenience. Shopping for groceries is not hedonistic. And as such people would rather buy them online. Promotion The marketing mix element "promotion", comprises of all the actions that a company must take to make its products visible to its target market and educate customers about its 3 benefits. This could involve hiring sales personnel, appointing an advertising agency, and formulating promotional programs. The Four Ps Procter &Gamble (P&G) focuses on middle-of-the-market packaged goods, because that is where sales, for this genre of products, are the highest. In the early 1990s P&G made remarkable changes to its pricing, promotion strategy and distribution channel deals. It introduced a "value pricing strategy", gave its advertising expenditure a fillip, reduced its in-store displays and trade deals, while at the same time reducing its coupon promotions. The reasons for P&G to tweak or cut back on the marketing mix elements were "cost of administering promotions", its yoyo effect on production, and its impact on customer loyalty. Coupons only encouraged cherry pickers and discouraged loyal customers. As a consequence of its grand plan on marketing mix P&G reduced its coupon expenditures by 50%, reduced its place expenses by 20% and increased promotion expenses by 20%. At this time the general market trend was an increase in "deals and