I’m sure you’ve been to a concert and heard a song you liked. But before buying the CD, you’ll want to know what other songs are on it. This is an example of product assortment – different types or styles of products available from one company – which can be part of your marketing mix. Here are seven “mixes” that marketers use to describe their products and services:
- Product Mix
- Product Progression/Product Life Cycle
- Market Coverage Mix (also called Positioning Mix)
- Service Mix
- Marketing Program Mix (or Promotion Mix)
- Channel Mix/Vertical Integration
- Global Marketing Mix (or International Marketing Mix)
A product mix is a group of different products and/or services that are offered by one company. The product mix gives consumers more choices, but it also carries the risk of confusing them about what the business offers. In trying to be everything to everyone, a business might do nothing well. That’s why deciding which products or services to carry is crucial to success in a competitive marketplace. A business might offer just a few items, or it may have dozens – even hundreds – of product lines and services. The product mix often changes as a company grows to include new products or drops those that no longer fit its business strategy.
A progression of related products is called a product “line extension” where each item is slightly different from the other. For example, from 2009-2011 the Ford Motor Company offered five F-Series trucks: the F-150, Ranger Edge, F-150 Limited Edition, F-250 Super Duty and Harley Davidson Edition F-150. This would be considered a “Product Line Extension.” Each item in this line was similar to but not exactly like the others.
The life cycle of a specific product or brand refers to how long it will be popular. A product life cycle (PLC) follows four stages:
– Development Stage- when the company thinks about creating its product;
– Introduction Stage- when the business makes and markets its products;
– Growth Stage- in which sales increase each year; and
– Maturity or Decline Stage- when sales start to drop off.
The Product Life Cycle identifies four stages of growth for a new product: introduction, growth, maturity and decline. During the introduction stage, sales start slowly as customers start becoming aware of the product and try it out. As companies spend money on marketing and other promotional activities during this stage, profits are small or non-existent if they exist at all. At some point, however, more and more customers start using the product as word spreads about its benefits. Sales go up quickly during this growth stage.
The maturity stage can last a long time – decades in some cases – but eventually sales level off or decline because the new product isn’t attracting many new users and those who have been using it are not buying much of it any more. Companies continue to make money on the product, but usually at declining levels compared to when it was growing rapidly. Eventually, profits fall so low that dropping the product becomes inevitable. If demand is still high enough for this product (sometimes called “cash cows”), companies keep them around even though they’re no longer making big profits just to avoid disrupting their cash flow. Companies usually replace products as they age and decline. In the long run, keeping some of your old products around can be a bad idea because if you have too many “dogs” compared to your “stars,” your profits suffer from the lower average return on those assets.
Market Coverage Mix is sometimes called Positioning Mix and consists of 4 Ps: Product, Price, Place (distribution) and Promotion. The goal for each company is achieving a competitive advantage – i.e., an area where they are better than or unique in relation to their competitors – by making decisions about which type of product/service to offer (or not offer), how much it will cost, where it will be sold and what type promotion should be used to make the product/service attractive to customers.
For example, a lawn care company might offer a range of services – e.g., mowing the lawn, edging and trimming for one area of the yard, another type service for another part of the yard, etc. In addition to pricing for each level of service they provide, they might hire salespeople who go from door-to-door offering their services or post flyers on people’s doors advertising their special rates for all-inclusive “mow and blow” services. They could also advertise in newspapers or on the radio about how green they are by using organic fertilizers instead of chemicals, which is a big issue with customers these days.
Another example would be a bakery that sells whole cakes, pies, cookies, etc. They will set prices for each item and decide whether to sell their products in grocery stores or restaurants.
Marketing Program Mix is sometimes called Promotion Mix. It consists of 5 Ps: Product, Price, Place (distribution), Promotion and Publicity. The elements of this mix are the same as Market Coverage Mix except that publicity is added to help get attention for a product or service by mentioning it in newspapers, magazines or on TV/radio news programs without expecting to get paid for being mentioned. Examples are press releases announcing new products or services; editorials about the company’s business practices written by business owners themselves; good reviews from people with influence like media celebrities who say nice things about the company; and bad reviews from people who don’t like the company. Publicity is a way of promoting products that doesn’t usually cost as much as paid advertising can.
Business markets are competitive with many companies competing for customers’ dollars, so most need to use marketing strategies to build market share or increase market penetration at least enough to make their business profitable. Many small businesses survive by serving only local customers – those within driving distance from the business location – because it’s not economically feasible to ship a product a long distance if it will still be fresh when its delivered. Others choose a niche market they can dominate by doing one thing extremely well that most other companies can’t or won’t do. For example, there are specialty food wholesalers who focus their business on providing high-quality gourmet foods to small independently owned restaurants in major metropolitan areas.
Other businesses go after the mass market, which means they’re looking for a wide distribution of products or services that are more standard and affordable than specialty items. A homebuilding company might use television advertising to show how quickly they can build a house, how many features it has and what it would cost. It’s not aimed at any one type of person so anyone watching TV during the commercial break will see the ad. The marketing strategy is widespread distribution or “selling everywhere” instead of targeting specific segments of customers within defined geographic boundaries like local markets do. Some examples of companies that sell worldwide are PepsiCo (Frito-Lay snacks), Anheuser-Busch (Budweiser beer) and Cargill, which is an international commodity trader in food, agricultural and financial markets.
In this article you have read about the elements of the marketing mix. These five elements form a framework for creating different marketing strategies to be used in a company’s advertising campaign. In deciding what strategy to use, all the possible options need to be carefully considered along with their costs and benefits to determine which one will give your business its best chance for success in your chosen market.