In The previous lesson you learnt that marketing identifies consumers need and supplies various goods and services to satisfy those needs most effectively. so the businessman needs to :
(a) produce or manufacture the product according to consumers need;
(b) make available it at a price that the consumers find reasonable;
(c) supply the product to the consumers at different out lets they can conveniently approach ;
(d) inform the consumers about the product and its characteristics through the media they have access to
All these are inter- related because a decision in one area affects decisions in other areas
Marketing involves the similar activities. To begin with, an organisation may decide on
its target group of customers to be served. Once the target group is decided, the product
is to be placed in the market by providing the appropriate product, price, distribution and
promotional efforts. These are to be combined or mixed in an appropriate proportion so
as to achieve the marketing goal. Such mix of product, price, distribution and promotional
efforts is known as ‘Marketing Mix’. Philip Kotler “Marketing Mix is the set of controllable variables that the firm
can use to influence the buyer’s response”. The controllable variables in this context refer
to the 4 ‘P’s . Each firm strives to
build up such a composition of 4‘P’s, which can create highest level of consumer satisfaction
and at the same time meet its organisational objectives. Thus, this mix is assembled keeping
in mind the needs of target customers, and it varies from one organisation to another
depending upon its available resources and marketing objectives. Let us now have a brief
idea about the four components of marketing mix.
Product : Product refers to the goods and services offered by the organisation. We are paying not for the tangible product but for
the benefit it will provide. So, in simple words, product can be described as a bundle of
benefits which a marketeer offers to the consumer for a price. While buying a pair of
shoes, we are actually buying comfort for our feet, while buying a lipstick we are actually
paying for beauty because lipstick is likely to make us look good. Product can also take
the form of a service like an air travel, telecommunication, etc. Thus, the term product
refers to goods and services offered by the organisation for sale.
Price: Price is the amount charged for a product or service. It is the second most important
element in the marketing mix. Fixing the price of the product is a tricky job. Many factors
like demand for a product, cost involved, consumer’s ability to pay, prices charged by
competitors for similar products, government restrictions etc. have to be kept in mind
while fixing the price. In fact, pricing is a very crucial decision area as it has its effect on
demand for the product and also on the profitability of the firm.
Place: Goods are produced to be sold to the consumers. They must be made available to
the consumers at a place where they can conveniently make purchase. Wool lens are
manufactured on a large scale in Ludhiana and you purchase them at a store from the
nearby market in your town. So, it is necessary that the product is available at shops in
your town. This involves a chain of individuals and institutions like distributors, wholesalers
and retailers who constitute firm’s distribution network The organisation has to decide whether to sell directly to the retailer or through the wholesaler etc. It can even plan to sell it directly to consumers.