You probably know that the department responsible for the marketing complex at the enterprise is engaged in drawing up organizational plans for the production and marketing of products for the future of a strategic and operational nature. Actually, this complex will become the main topic of the article.
Definition of marketing
To begin with, let's give a scientific definition of the concept of "marketing". Marketing is a multicomponent system for approving the structure of production and further marketing of products (both the sale of goods and the provision of services), which is based on meeting consumer demand by anticipating the preferences of potential buyers. Enterprises today develop in rather difficult conditions of a market economy. Quite naturally, the market defines a range of challenges and questions that firms need to answer.
The main issues of the market economy for producer participants are:
- What and how to produce?
- How many products do you need to produce?
- How to effectively organize intra-organizational planning and management of the production process?
- Who will buy the manufactured products?
- Which is the most efficient way to survive in a competitive market environment?
- How to work out the best way to distribute goods to potential buyers?
If you don't like scientific definitions, just remember these questions, because in essence, marketing answers exactly them.
Production and sales plans
The plans of the organization mentioned above include forecasts regarding future market conditions, short- and medium-term goals of the enterprise. In addition, the plans include the development of a marketing mix (a kind of PR-company): the strategy of behavior and tactics of the enterprise in market conditions, its price, product orientation and sales policy, as well as an advertising or communication path of action.
Definition of marketing mix
The marketing mix is a set of controllable, intermittent marketing factors used primarily to generate interest and positive feedback from the target market audience.
Otherwise, this complex is called marketing-mix. The marketing function of the "mix" is to form a set of elements of the marketing mix. A complex that not only satisfies the needs of the target audience of potential consumers, but also maximizes the effectiveness of the organization.
"Marketing mix" is mainly used to solve the tasks set in the marketing policy of a certain economic entity in a market segment determined during the development of the complex.
A Brief History of the Marketing Mix
The first attempts to systematize disparate marketing tools were made in the middle of the last century. The term "marketing mix" appeared in an article by J. Kalliton. It seemed that the author decided to work out some recipe for an effective solution to marketing problems.
Albert Frey was the first to suggest that marketing variables must be divided into two main groups:
- compose an offer (brand, packaging, price, product, service);
- shape ways and means (advertising, distribution channels, PR, sales promotion, personal selling).
The 4P model, which has become a marketing classic, was proposed by the American Jerry McCarthy in 1964. It was a marketing complex of special components: product, price, place, promotion. Luckily, all the elements started with P (it has not been established that the author chose them intentionally). Actually, in such an odious way, the current name of the model, 4P, was formed today. The naming was a fundamental factor in the popularity of this marketing model due to the fact that it was simple and easy to remember. For the first time McCarthy's concept called 4P was shown to a wide audience in 1965, the presentation was organized byby the author of the article with information about 4P Neil Boden. Paradoxically, such a long-standing marketing model has indeed become (and continues to be) generally accepted, while the innovative and revolutionary models of today cannot repeat or even come close to its success.
The model developed by Booms and Bitner in 1981 is still somewhat acceptable. In the new concept, the authors added three more Ps to the four Ps: process, people, physical justification (for example, justification for the provision of a service). For a long time, Bitner and Booms did not think about the name, deciding that 7P was quite original and acceptable. (More on that later.)
One of the most revolutionary marketing models was proposed by Bob Lauteborn in 1990. The author decided to speak at a scientific conference, outlining in his report the main principles of building a 4C model. (Read more about this concept below.)
Dev and Schultz created SIVA in 2005, innovatively reflecting the classic 4P through the eyes of the consumer. That year turned out to be rich in marketing revolutions: Otlakan proposed the 2P + 2C + 3S model (information about both models is in this article.)
General characteristics of marketing
Marketing is arranged in such a way that the whole system is based on the availability of the product itself. No product - no marketing. However, just finding a product is not enough; it must certainly have some value (utility) for the consumer. The product of the offer must be available to the consumer who is interested in purchasing it, otherwise the offer does not havemeaning. If there are at least two parties that are interested in exchanging with the opposite participant in economic relations, there must be some means of interaction between them. Actually, marketing is engaged in the solution of these problems.
The ratio that defines consumer consciousness sounds like "price - quality". The buyer always evaluates the product based on the amount of costs spent on its acquisition. The above ratio can be given as a "price - utility" option: the consumer analyzes how useful this acquisition can be for him and what price he is willing to pay for this utility.
Another element of the marketing mix is communication. Otherwise, how can the manufacturer know about the consumer. The parties to the transaction will certainly communicate, otherwise it would be very difficult for them to solve the tasks.
Basic elements
Distinguish between classic and non-classical marketing mixes.
Classic elements of the marketing mix:
- Product. This concept includes both goods and services: packaging and design, technical characteristics, assortment and its definition, quality level and many others.
- Price. The next element has the meaning of defining such characteristics as the rate of return, cost, discounts, the optimal price for the consumer, the value of the product in consumer perception, and so on.
- Distribution (product reaching the consumer). In this case, it's aboutselection of points of sale (outlets), intermediaries in the transaction, channels and methods of distribution of products, and so on.
- "Promotion" of the product. Product promotion on the market refers to the work of establishing effective public relations and personal sales, as well as advertising mechanisms, sales promotion and the like.
It is not necessary to say separately that communication channels have been established between all marketing elements. Thus, the qualitative characteristics of the product and its functionality (capabilities) quite reasonably affect the formation of the price of the goods. This specific example is due to the fact that the consumer (often on an intuitive level) evaluates his purchase according to a single criterion - the ratio of price and efficiency (utility). That is, the buyer unconsciously compares the cost of the goods with the set of benefits that this product can offer him.
4R
The classic marketing mix structure is a 4P concept: product, price, place, promotion. Actually, all elements of the model are described in detail above. The 4P marketing mix determines the organization's policy in the areas of product sales, price characteristics, marketing and communication. However, the main thing in determining the vector of activity of any enterprise is the direct sale of products. In its process, elements of the marketing mix may well change. Permutations in this case are a means of more effective impact on consumers, possible withresources available to the organization. In this case, there is a real possibility of the firm "betraying" itself, so it is extremely important to maintain your own understanding of marketing and follow a specific marketing path.
Modern models
In modern conditions, there is a constant development, and consequently, the complication of the competitive component of the market. In this regard, new elements are added to the improvement of the marketing mix, forming the concepts of 5P - 12P, 4C and others. However, the increase in the components of the concept of "marketing complex" does not cause a strong positive reaction among all specialists.
The main reason for dissatisfaction, identified by the opponents of the idea of expanding the complex, is the possibility, in their opinion, of violating and deforming the very concept of marketing as such, transferring the role of additional elements from the managerial plane of marketing. It is also important that the four main components can indeed be comprehensively studied and controlled by marketers, which is difficult to say about additional elements.
7P
Experts recognize 7P as the most successful of all options for expanding the 4P model. To the four Ps mentioned earlier, are added:
- People (people) - everyone involved in buying and selling.
- Process (purchase process) - an active choice by the consumer of the desired product.
- Physical Evidence (physical attribute) - a certain material object that satisfies the client as confirmation thatthe service was provided and completely legitimate.
The seven-P model was originally created for marketing services, but is now actively used in the commodity version.
Other R
Experts also criticize the main 4P marketing mix for focusing on the micro level or the fact that only the seller is affected. As part of the expansion of this concept, the number of P in the economics of marketing increases.
- Purchase (purchase) - the reasons and consequences of the purchase.
- Package (packaging) - represents not only the prerequisites for the purchase, but also the consequences.
- Profit (profit).
- Physical Surround (environment) - updated efficiency conditions implemented by the manufacturer.
- PR (public relations) - forms a positive consumer perception of the organization.
4C
A very bold attempt to shift the focus to the consumer - the formulation of the 4C model. Its main drawback, which does not allow the concept to function effectively, is the absolute rejection of P-components.
This marketing mix includes:
- Customer needs and wants.
- Cost to the customer.
- Communication (information exchange).
- Convenience (consumer convenience).
All the components that make up the model clearly demonstrate an attempt to reorient from the producer to the consumer at all stages of both production andsubsequent sale of the goods. There is also a desire to create an antagonist of the four Rs. But the author, apparently, did not think that the classical elements of the marketing mix also somehow take into account the needs of the buyer. When using the 4P concept, no one will get away from conducting an analysis of customer expectations, other research in the field of marketing. Moreover, in addition to producers and consumers, the 4P model takes into account both competitors and suppliers.
SIVA
A relatively new alternative to tradition (SIVA was published in Marketing Management in 2005). No wonder we use the term " alternative". In this version of the marketing mix, each component of the classic 4P concept is matched with a replacement element SIVA. The classics seem to be presented "from the inside out" - with the eyes of the consumer.
The ratio of 4P and SIVA looks like this:
- PRODUCT -> SOLUTION.
- PROMOTION -> INFORMATION.
- PRICE -> VALUE.
- PLACE -> ACCESS (access).
And now more about each of the four elements of SIVA:
- Solution (solution). Finding the most acceptable solution to the problem in order to fully satisfy the needs of the buyer.
- Information (information). Who should provide the consumer with information about the product and how to do this in order to ensure the sale of the product.
- Value (value). About the costs and benefits of the buyer, about his losses and rewards.
- Access (access). In whichSources The buyer should seek help in deciding how to easily find or purchase a particular source.
2P + 2C + 3S
The Otlacan model applies exclusively to email marketing, representing the service marketing mix and narrowness. Actually, this is the main drawback of the concept. And now we will specify all the elements of the model:
- 2Р - Privacy (privacy), Personalization (personalization).
- 2С - Community (community), Customer Service (customer service).
- 3S - Sales Promotion (sales promotion), Security (security), Site (site).
