Introduction To The Elements OfMarketing Mix, BCG and GEMatrix, Growth Strategies etc.4-MARKETINGMANAGEMENT.1
Introduction to Elements ofMarketing Mix.An Organization has to decide how to allocate the total MarketingBudget for a Product to the various Marketing-Mix Elements.Marketing-Mix is one of the key concepts in Modern MarketingTheory.Marketing Mix is the set of Controllable Variables and theirlevels that the Firm uses to influence the Target Market.Any variable under the control of the Firm that caninfluence the level of Customer Response is a MarketingMix Variable.Commodity Firms usually assume that their Marketing Mix isnarrow, consisting primarily of Price and Service.Other Firms see dozens of controllable elements that might affectCustomer Response. Various attempts have been made to developa list of basic Marketing Variables.McCarthy popularized a four-factor classification called the FourP’s: Product, Place, Promotion and Price A list of the particularMarketing Variables under each P is shown in the next slide.2
Elaboration of the FourP’s.Product:Place:Promotion:Price:Quality.Channels.Advertising.List Price.Features.Coverage.Personal Selling.Discounts.Options.Locations.Sales Promotion.AllowancesStyle.Inventory.Publicity.PaymentBrand Name.Transport.Credit Terms.Packaging.Sizes.Services.Warranties.Returns.3
Marketing Allocation.In addition to determining the level and Mix ofMarketing Effort, Management must determine howto allocate Marketing Resources among its Products,Customer Segments, and Sales Areas.Typically the Company allocates a higher proportionof its Marketing Resources to those entities that arelarger and have more unrealized Market Potential.In other words, it is looking for the highest returnwhen allocating Marketing Funds to different users.The Marketing Manager uses Matrixes like BostonConsulting Group Matrix (BCG Matrix) or GeneralElectric Matrix (GE Matrix) to ensure properallocation of Resources to the various Product MarketSegments etc. Resources here mean Money, People,Material, Machinery etc.4
Elaboration of the “FourP’s” (Cont’d).It should be also be recognized Marketing-Decisionvariables are not all adjustable in the short run.The Firm can typically change its price, increase the size ofits Sales Force, and raise its Advertising Expenditures inthe short run.It can only develop New Products and modify its MarketingChannels in the long run.Thus the Firm typically makes fewer period to periodMarketing Mix changes in the short run than the number ofMarketing Mix variables suggest.Marketing Staff members will have different opinions onhow incremental Marketing Funds should be used.