The marketing mix (4 Ps) is the set of controllable elements or variables that a company uses to influence and meet the needs of its target customers in the most effective and efficient way possible. These elements are sometimes sorted into the categories of product, price, place, and promotion (also known as the "4 Ps"). The marketing mix has been defined as the "set of marketing tools that the firm uses to pursue its marketing objectives in the target market".Kotler, P., Marketing Management, (Millennium Edition), Custom Edition for University of Phoenix, Prentice Hall, 2001, p. 9.
Marketing theory emerged in the early twenty-first century. The contemporary marketing mix which has become the dominant framework for marketing management decisions was first published in 1984. In services marketing, an extended marketing mix is used, typically comprising 7 Ps (product, price, promotion, place, people, process, physical evidence), made up of the original 4 Ps extended by process, people and physical evidence. Occasionally service marketers will refer to 8 Ps (product, price, place, promotion, people, positioning, packaging, and performance), comprising these 7 Ps plus performance.
In the 1970's Professor Koichi Shimizu proposed the 4 Cs (commodity, cost, channel, and communication). A newer 4 Cs model emerged in the 1990's as a more customer-driven replacement of the 4 Ps created by Professor Robert Lauterborn, consisting of the 4 Cs (consumer, cost, convenience, and communication).
The correct arrangement of marketing mix by enterprise marketing managers plays an important role in the success of a company's marketing: Develop strengths and avoid weaknesses Strengthen the competitiveness and adaptability of enterprises Ensure the internal departments of the enterprise work closely together
Emergence and growth
The origins of the 4 Ps can be traced to the late 1940s.Hunt, S.F. and Goolsby, J., "The Rise and Fall of the Functional Approach to Marketing: A Paradigm Displacement Perspective", (originally published in 1988), reprinted in Review of Marketing Research: Special Issue - Marketing Legends, Vol. 1, Naresh K. Malhotra, (ed), Bingley, UK, Emerald, 2011 The first known mention of a mix has been attributed to a Professor of Marketing at Harvard University, James Culliton. In 1948, Culliton published an article entitled The Management of Marketing Costs, in which he describes marketers as "mixers of ingredients".Culliton, J., The Management of Marketing Costs, [Research Bulletin] Harvard University, 1948) Years later, Culliton's colleague, Professor Neil Borden, published a retrospective article detailing the early history of the marketing mix in which he claims that he was inspired by Culliton's idea of "mixers", and credits himself with popularising the concept of the "marketing mix".Borden, N.H., "The Concept of the Marketing Mix", Journal of Advertising Research, 1964, pp 2-7 and reprinted in Baker, M.J. (ed), Marketing: Critical Perspectives on Business and Management, Vol. 5, Routledge, 2001, pp 3-4 and available online at Google Books According to Borden's account, he used the term "marketing mix" consistently from the late 1940s: for instance, he is known to have used the term "marketing mix" in his presidential address given to the American Marketing Association (AMA) in 1953. Borden did not define the mix, seeing the idea simply as a composition of "the important elements of ingredients" of a marketing programme.Rafiq, M. and Ahmed, P.K., "Using the 7Ps as a Generic Marketing mix: An Exploratory Survey of UK and European Marketing Academics", Marketing Intelligence & Planning, , Vol. 13, no. 9, 1995
Although the idea of marketers as "mixers of ingredients" caught on, marketers could not reach any real consensus about what elements should be included in the mix until the 1960s. Early schemas to define "mix" include:
John Howard's 1957 definition of four groups: product, price, channel, and promotion; Albert Frey's 1961 distinction between the "offering" (product, brand, and price) and the "methods and tools" such as advertising, sales promotion, personal selling, publicity, distribution channels, marketing research, and strategy;Frey, A. W. (1961), Advertising, Third Edition, New York: The Ronald Press and Lazer and Kelly's 1962 model, which distinguished between the goods mix (product, brand, and price), the distribution mix (channels and physical distribution), and the communication mix (advertising and sales).Lazer, W. and Kelly, E. K. (1962), Managerial Marketing: Perspectives and Viewpoints, Richard D. Irwin, Homewood, Illinois
The 4 Ps, in its modern form, was first proposed in 1960 by E. Jerome McCarthy, who presented them within a managerial approach that covered analysis, consumer behavior, market research, market segmentation, and planning.McCarthy, E.J., Basic Marketing: A Managerial Approach Irwin, Homewood, Ill., 1960 Philip Kotler popularised this approach and helped spread the 4 Ps model, noting its value from a "pedagogical point of view". McCarthy's 4 Ps have been widely adopted by both marketing academics and practitioners.Constantinides, "The Marketing Mix Revisited: Towards the 21st Century Marketing", Journal of Marketing Management, vol. 22, 2006, pp. 407-438. Online: http://intranet.fucape.br/uploads/MATERIAIS_AULAS/25112-8.pdf
The prospect of extending the marketing mix first took hold at the inaugural AMA conference dedicated to Services Marketing in the early 1980s, and built on earlier theoretical works pointing to many important limitations of the 4 Ps model. Taken collectively, the papers presented at that conference indicate that service marketers were thinking about a revision to the general marketing mix based on an understanding that services were fundamentally different from products, and therefore required different tools and strategies. In 1981, Booms and Bitner proposed a model of 7 Ps, comprising the original 4 Ps extended by process, people and physical evidence, as being more applicable for services marketing.Booms, B. and Bitner, M. J. "Marketing Strategies and Organizational Structures for Service Firms" in James H. Donnelly and William R. George, (eds), Marketing of Services, Chicago: American Marketing Association, 47-51.
Since then, there have been a number of different proposals for a service marketing mix (with various numbers of Ps); most notably the 8 Ps, comprising the 7 Ps above, extended by 'performance'.
McCarthy's 4 Ps
The original marketing mix, or 4 Ps, as originally proposed by marketers and academic Philip Kotler and E. Jerome McCarthy, provides a framework for marketing decision-making. McCarthy's marketing mix has since become one of the most enduring and widely accepted frameworks in marketing.Bitner, M.J., "The Evolution of the Services Marketing Mix and its Relationship to Service Quality", in Service Quality: Multidisciplinary and Multinational Perspectives, Brown, S.W., Gummeson, E., Edvardson, B. and Gustavsson, B. (eds), Lexington, Canada, 1991, pp. 23-37. McCarthy's 4 Ps has remained influential in marketing theory and practice, serving as a cornerstone for analyzing and optimizing marketing strategies in various industries.
+ Table 1: Brief Outline of 4 PsCategoryDefinition/Explanation/ConceptTypical Marketing Decisions ProductA product refers to an item that satisfies the consumer's needs or wants. Products may be tangible (goods) or intangible (services, ideas, or experiences). Product design – features, quality Product assortment – product range, product mix, product lines Branding Packaging and labeling Services (complimentary service, after-sales service, service level) Guarantees and warranties Returns Managing products through the life-cyclePrice Price refers to the amount a customer pays for a product. Price may also be a consumer's expectation for getting a certain product (e.g. time or effort).
Price is the only variable that has implications for revenue.
Price is the only part of the marketing mix that talks about the value for the firm.
Price also includes considerations of customer perceived value. Price strategy Price tactics Price-setting Allowances – e.g. rebates for distributors Discounts – for customers Payment terms – credit, payment methodsPlace Refers to providing customer access Considers providing convenience for consumers. Strategies such as intensive distribution, selective distribution, exclusive distributionWright, R., Marketing: Origins, Concepts, Environment, Holborn, London, Thomson Learning, 1999, pp. 250-251. Franchising;Hartley, K. and Rudelius, W., Marketing, The Core, 4th Ed., McGraw-Hill, 2001. Market coverage Channel member selection and channel member relationships Assortment Location decisions Inventory Transport, warehousing and logisticsPromotionPromotion refers to marketing communications May comprise elements such as: advertising, PR, direct marketing and sales promotion. Promotional mix - the appropriate balance of advertising, PR, direct marketing, and sales promotion Message strategy - what is to be communicated Channel/ media strategy - how to reach the target audience Message frequency - how often to communicate
Product refers to what the business offers for sale and may include products or services. Product decisions include the "quality, features, benefits, style, design, branding, packaging, services, warranties, guarantees, life cycles, investments and returns".
Price refers to decisions surrounding "list pricing, discount pricing, special offer pricing, credit payment or credit terms". Price refers to the total cost to a customer to acquire the product, and may involve both monetary and psychological costs such as the time and effort spent in acquisition. Distribution channels taken into consideration including retailer, wholesaler, Business to Business or Business to Customer.
Place is defined as the "direct or indirect channels to market, geographical distribution, territorial coverage, retail outlet, market location, catalogues, inventory, logistics, and order fulfillment". Place refers either to the physical location where a business carries out business or the distribution channels used to reach markets. Place may refer to a retail outlet, but increasingly, refers to virtual stores such as "a mail order catalogue, a telephone call centre, or a website. Example, firms that produce luxury goods like Louis Vuitton employ an intensive placement strategy by making their products available at only a few exclusive retailers. In contrast, lower priced consumer goods like toothpaste and shampoo, typically employ an extensive placement strategy by making their products available to as many different retailers as possible."
Promotion refers to "the marketing communication used to make the offer known to potential customers and persuade them to investigate it further". Promotion elements include advertising, public relations, direct selling and sales promotions.
Modified and expanded marketing mix: "Seven P's"
By the 1980s, a number of theorists were calling for an expanded and modified framework that would be more useful to service marketers. The prospect of expanding or modifying the marketing mix for services was a core discussion topic at the inaugural AMA Conference dedicated to Services Marketing in the early 1980s, and built on earlier theoretical works pointing to many important problems and limitations of the 4 Ps model. Taken collectively, the papers presented at that conference indicate that service marketers were thinking about a revision to the general marketing mix based on an understanding that services were fundamentally different from products, and therefore required different tools and strategies. In 1981, Booms and Bitner proposed a model of 7 Ps, comprising the original 4 Ps plus people, process, and physical evidence, as being more applicable for services marketing.