Marketing decisions generally fall into four categories; product, price, place and promotion. These categories together, are known as the marketing mix, or the 4 P's of marketing. Subject to the internal and external constraints of the marketing society, the marketing mix gives marketing managers controllable parameters to make decisions that are centered on customers in the target market. The ultimate goal of the marketing mix is to create value and generate a positive response for any organzition.
Elements of the Marketing Mix
Wikipedia, The Free Encyclopedia (2006), describes the marking mix approach to marketing as a model of crafting and implementing marketing strategies and stresses a blending of various factors in such a way that both organizational and consumer (target markets) objectives are attained. When blending these factors, or elements, marketers must understand the wants and needs of the customer and use those elements when formulating the appropriate marketing strategies and plans that will satisfy them.
Neil Borden, the developer of the marketing mix model, suggests that you need two sets of information in order to develop a marketing mix; a list of important elements that go into the mix, and a list of forces that influence these decision variables (Wikipedia, 2006). The most common variables that are used in formulating this mix are product, price, place and promotion. These variables, viewed from the perspective of the marketer, are sometimes referred to as marketing management because it describes the elements in which marketers have to work with.
"Historically, the thinking was: a good product will sell itself. However there are no bad products anymore in today's highly competitive markets" (Value Based Management.net, (2006). Keeping that in mind, organizations have changed their strategy on creating products and services. In order for a product or service to sell, the organization must define the controllable variables in a way that strives toward meeting the wants and needs of the customer. These variables include; functionality, quality, appearance, packaging, brand, service, support and warranty of the product or service (Value Based Management.net, (2006).
Deciding on a pricing strategy and identifying the total cost to the use is a part of the price element (Webber, 2005). The pricing decision is where an organization decides on how much a customer is willing to pay for their product. This is when we see competition between businesses. At this stage, organizations make decisions pertaining to the list price, discounts, financing, leasing options and allowances for their products and services.
Place (Distribution) Decisions
Is our product available at the right place, at the right time and in the right quantities? These are questions that organizations ask themselves as they make decisions about the distribution of their products or services. "Some of the revolutions...