1. What are four variables of the marketing mix?
The Marketing mix is a set of four decisions which need to be taken before launching any new product. These variables are also known as the 4 P’s of marketing. These four variables help the firm in making strategic decisions necessary for the smooth running of any product / organization. These variables are: Product, Price, Place & Promotions.
Product – The first thing you need, if you want to start a business, is a product. Therefore Product is also the first variable in the marketing mix. Product decisions are the first decisions you need to take before making any marketing plan. A product can be divided into three parts. The core product, the augmented product and the tertiary product.
Pricing – Pricing of a product depends on a lot of different variables and hence it is constantly updated. Major consideration in pricing is the costing of the product, the advertising and marketing expenses, any price fluctuations in the market, distribution costs etc. Many of these factors can change separately. Thus the pricing has to be such that it can bear the brunt of changes for a certain period of time.
Place – Place refers to the distribution channel of a product. If a product is a consumer product, it needs to be available as far and wide as possible. On the other hand, if the product is a Premium consumer product, it will be available only in select stores. Similarly, if the product is a business product, you need a team who interacts with businesses and makes the product available to them.
Promotions – Promotions in the marketing mix includes the complete integrated marketing communications which in turn includes ATL and BTL advertising as well as sales promotions. Promotions are dependent a lot on the product and pricing decision. What is the budget for marketing and advertising? What stage is the product in? If the product is completely new in the market, it needs brand / product awareness promotions, whereas if the product is already existing then it will need brand recall promotions.
2. What conditions must exist before a marketing exchange can occur? Describe a recent exchange in which you participated
Exchange is just one of three ways we can satisfy our needs. If you want something, you can make it yourself, acquire it by theft or some form of coercion, or you can offer something of value (perhaps your money, your services, or another good) to a person or organization that has that desired good or service and will exchange it for what you offer. Only this last alternative is an exchange in the sense that marketing is occurring.
The following conditions must exist for a marketing exchange to take place:
• Two or more people or organizations must be involved, and each must have needs or wants to be satisfied. If you are totally self-sufficient, there is no need for an exchange.
• The parties to the exchange must be involved voluntarily.
• Each party must have something of value to contribute in the exchange, and each must believe that it will benefit from the exchange.
• The parties must communicate with each other. The communication can take many forms and may even be through a third party, but without awareness and information, there can be no exchange.
These exchange conditions introduce a number of terms that deserve some elaboration. First there are the parties involved in the exchange. On one side of the exchange is the marketer. Marketers take the initiative by trying to stimulate and facilitate exchanges. They develop marketing plans and programs and implement them in hopes of creating an exchange.
A recent marketing exchange I was involved in was buying Mother’s Day cards / gifts. It’s a highly advertised (and somewhat expensive) holiday and marketers target everyone that needs to buy something with flowers, cards, jewelry and other gifts. The exchange is the best…