The paper “ Starbucks - Each Element of Marketing Mix Has Its Importance and Must Be Managed as an Integrated Whole to Achieve Cohesion" is a worthy example of a case study on marketing. Organizations rely on various marketing strategies to tailor their offers to suit the targeted consumer. There are a few key elements in this offer which make up the company’ s marketing mix. These include the product element, the price element, the distribution or place element, and the promotional element, which commonly termed as the 4Ps in marketing management (Armstrong & Kotler, 2009).
Following is an assessment of these key elements of the marketing mix. ProductThe product element is the most crucial element of the marketing mix and needs to be offered with the required level of quality and with an ability to satisfy the need it is catering to. Broadly defined, the products include “ physical objects, services, persons, places, organizations, ideas or a mix of these entities” (Armstrong & Kotler 2000). A product is not merely a tangible object but a mix of elements. There are three levels, which form the overall product, which includes the core product, actual product and augmented product.
The core product is the actual key benefits and problem solving offered by the product. The next level of the product is designed around this core product. The actual product, which is the second level of the product, includes quality, features, design, brand name, and packaging. The third level, which is the augmented product, aims at offering additional services and benefits to add value to the product. This perspective of product element indicates the variety of choices the companies have informing the product offer. Price Price can be defined as the “ sum of values, which a consumer exchanges for the benefits derived from a product or service” (Armstrong & Kotler, 2000).
This is one of the most flexible elements in the marketing mix as it can be changed quickly and largely controlled by the company (Linton & Morley, 1995). But many companies fail in their pricing decisions due to reasons such as not revising prices often enough to reflect market changes, pricing being too cost-oriented, pricing not being compatible with the rest of the marketing mix and not having prices to suit different market segments.
Pricing decisions of a company is affected and influenced by a host of internal and external factors. The company’ s marketing objectives, marketing strategy, cost structure as well as other organizational considerations will affect the pricing decisions at an internal level. External factors such as the market conditions, competition as well as other environmental factors such as the status of the economy, number of resellers involved in the distribution chain and the government price controls will also affect the pricing decisions of a company. PlaceOrganizations use intermediaries in the process of taking their product to the consumers.
Distribution Channels are formed with a “ set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user” (Stern et. al. 1996). Some companies are still using conventional channels of distribution where there is little control over each other within the channel members and the individual decisions are made with own profit maximization intentions rather than with overall effectiveness of the channel in mind.
There is a difference between a Conventional marketing channel and a Vertical Marketing System (VMS). In a VMS, the members wield a high level of power over each other through ownerships, contractual agreements or scale of volumes. Therefore the decision making in a VMS is more integrated and consumer-oriented.