What is Marketing: Part 2 - The Marketing Mix

The Marketing Mix

Part 2 in the “What is Marketing” series.

Determine the marketing mix

The "marketing mix" is the balance of three components:

1. Product 
2. Price
3. Positioning

The marketing mix should be developed in response to a recognized need on the part of the target market.  Therefore, all marketing begins with targeting; and when marketing efforts get rocky, targeting is what you return to.

Targeting

Targeting is the art of figuring out who your customers are, and then orienting your entire business strategy so that it aligns with those customers' wants and needs.  The understanding of who your customers are and what it is that they need is the information that drives your business decisions.  The best way to begin a marketing campaign is to contact your customers, or a representative sample of them, and ask them to tell you what they would like.  Primary information such as survey data is invaluable in assisting you to understand how to proceed with your brand development strategy.

Product design

Once you know what your customers want, you can set about trying to design it.  Obviously, the particular need you choose to address will be related to your firm's core competency.

Returning to the example I used in previous posts on this blog: imagine that you have been sewing a line of handmade clothing and selling your clothes at a local street fair.  You've been doing it for a while and you're ready to expand.

Your core competency is not the ability to stitch a hem: there's a machine in China that's better at that than you are.  Your core competency is your creative ability to conceptualize a unique design and to put it together with secondhand materials and found objects to create trendy clothes.

Based on your past sales data and informal interviews with customers, you know that most of your customers are young (in their 20's) female city dwellers with a college education.  They like your clothing for the uniqueness of the pieces and the flashy styles you create.

So, as you look to expand, should you try to develop a less flashy line, in an attempt to reach the masses who are not yet buying your products?  No!  You already know that your existing customers value you for your flashy styles.  Go with it.  As you look to expand, maintain consistency in the products sold under your brand, so that regardless of where they encounter it, customers will recognize it for the unique identity that it offers.  Find more customers who are just like your existing customers: they are your niche, your target market.

Price

The cost of the product should reflect the value of the product to the customer.  The cost of raw materials is only a small factor when calculating the total cost...  unless the cost of raw materials is substantial, in which you may wish to reconsider your inputs.  You can engage in Process Costing to meet your targets; although that's more Operations Management and Accounting than it is marketing specifically, but it's all tied together.  Once all the factors are properly weighted, the price should be "right" for the time of sale, accounting for convenience, market conditions (competition), the uniqueness of the product, and the consumer's own budgetary constraints.  When the price is "right," a transaction is conducted, and both the buyer and the seller obtain value.

Positioning

Positioning is the brand personality.  Positioning incorporates yes the physical location (position) of any outlet but also the reputation of the company, the exclusivity or ubiquity of the brand, and any statements made by the brand about the consumer.

Price is a component of positioning.  Selection of channel partners is also a key component of positioning.  That brings us to making the product available.

Next time: sales channels.