Product and Place as Components of Marketing Mix - Term Paper Example

Marketing Mix: Study of two elements of the marketing mix Introduction Increasing competition is one of the challenges facing business organizations in the contemporary markets. Overcoming such challenges require an effective marketing strategy to be developed and adopted by an organization. Marketing has become an integral part of organizational management. Traditionally, the marketing roles were often associated with commercial firms; however, these roles have become essential and nearly all organizations will employ marketers or seek the services of marketing consultants (Ellis et al, 2011, p.13; Burrow, 2012, p.5).Marketing will entail all the processes that an organization undertake in order produce products and get customers to know about the products and services such as advertisement and transportation of the products (Burrow, 2011, p.5). Marketing goes beyond mere advertisement or promotion of products and will include the decision as to what products to introduce into the market and the benefits associated with such products (Goi, 2009). Effective marketing planning requires a manager to understand all the variables that determine the market patterns. This brings in the concept of a marketing mix. Marketing mix refers to different controllable marketing elements that an organization can put together following the different forces that prevail in the market (Hisrich, 2000, p.1). An effective marketing mix provides the managers with an efficient way of putting the marketing plans into practice (Bennet, 1997). The kind of blend that a manager develops out of these marketing elements may influence its competitive position in the market (Grönroos, 1994). This paper bases on the 7P model of marketing mix and will focus on two of these seven elements; product and place. The effects that these elements have on the achievement of the marketing objectives of organization as well as the strategies that a marketing manager should apply are discussed. Components of marketing mix The constitution of a marketing mix has taken different dimensions over the years. Microeconomic theorists had put much focus on price as the key market element. Neil Borden (1964, cited in Constantinides, 2008) suggested that there are twelve such controllable marketing elements. With the other forces identified in the market, McCarthy (1964) developed a marketing mix consisting 4Ps: Product, Price, Promotion, and Place as a reduction of the model developed by Borden. The development of such a marketing mix helps identify marketing roles and separate them from other managerial roles (Goi, 2009, p.1). Different scholars and economists such as Lauterbon (1990), Walter van Walterschoot and Christophe Van den Bulte (1992), Moller (2006) and Popovic (2006) have criticized the 4P model and suggested addition of other elements to the marketing mix. Booms and Bitner (1980) suggested that 3 more P’s be added to the 4P’s namely People/Participants, Physical evidence, and Process to make a marketing mix of 7P’s. Marketing strategy The focus of management in the design of products should remain on the consumer needs. Customization of products and services to customer needs improves relationship with the customers (Kim et al, 2006). It has been pointed out that the key strategic decisions that an organization makes on marketing activities ‘should be founded on the wants and wishes of the targeted group of customers’ (Hisrich, 2000, p.1). Product development requires elaborate research and development programs (Borden, 1984, p.9). Before developing a product, it will be necessary for a marketing manager to perform market research to learn the current needs of the consumer. The manager should also research on the products produced by the competing companies and their features. The next step is to develop products with features that meet the current needs and communicate these features to the clients. The products need to be reliable. The management should ensure that the products do exactly what they are supposed to do. Product as a component of marketing mix Product is one of the elements in the 4P’s or 7P’s model of a marketing mix. The elements of a marketing mix are parameters or variables that a manager can control depending on the internal and external factors that affect its operations (Chandrasekar, 2010, p.8). One goal of an organization is to make profit from its operation. To achieve this objective, an organization develops a product. Kotler (1984) considers a product as anything that is presented into the market for acquisition and use by the customers. It is the item or service that an organization will issue or provide to its consumers in exchange for money. Consideration of product as marketing elements enables the managers to make decisions that will help create perceived value of their products by the customers (Chandrasekar, 2010, p.8). Product offering and strategy is the starting point for any marketing mix since the managers have to identify what is to be marketed (Gitman and McDaniel, 2008; Lamb, Hair, and McDaniel, 2011). The managers need to be very careful with the features and design of their products. The products and services need to fulfill the desires of the clienteles and they should be appealing to the customers. The products need to give some value to the consumers (Kotler et al, 1999). There are different aspects of a company product that the managers need to consider. Product focuses on different aspects of the physical unit such as features, design, sizes, and color as well as the product name, brand, company image, value and the associated benefits of using the product (Lamb, Hair, and McDaniel, 2008, p.43; 2011). Before an organization decides to introduce some product into the market, the marketing manager needs to make several considerations. Firstly, it is necessary to consider the aim(s) of the products in relation to the needs of the customers (Chandrasekar, 2010, p.8). The managers will have to consider the different needs of the customers that will be satisfied by these products and services. General Motors takes pride in engaging their customers in order to incorporate the appropriate features and technologies in their car models (General Motors Company, 2010, p.4; Barabba et al, 2002). Secondly, the features of the products that enable them satisfy customer needs have to be identified (Chandrasekar, 2010, p.8). The management should ensure that all the features included in a product add some value that is useful and appealing to the clients. The application of modern technology (Thin Film Transistor Liquid Crystal Display) has improved the popularity of LCD-TV in the last few decades (Chiu et al, 2006, p.144). It is also important to note that certain features may just increase the total cost of production and hence lead to high product prices while they will not be very useful to the consumers. The manager will also have to identify the missing features that would make the product more useful to the client. Similarly, the management should be concerned with difference between the products that have been presented in the market and the new product to be introduced. They need to consider what provides their product with a competitive advantage over the products of the competitors; what constitutes the unique selling point of the products and services (Chandrasekar, 2010, p.8). The benefits of a product associated with its features will determine whether or not a product thrives well and beats similar products in the market. Then the manager needs to consider how to position the product in the market. Introducing a new product into the market may take two forms; the product may fill the gap that exists in the market (when there are no similar products in the market) or it may offer substitution to other products already in the market. Proper positioning will enable a company to compete other companies dealing in the same product. The consumers need to know about the benefits of the products. Similarly, a manager needs to come up with an appropriate product name and brand; some brands are popular and thus using the trademark may position a product well in the market. Some consumers will be attracted to the products not only by the product features but also by what the products mean to them so that products associated with famous names such as Ralph Lauren or Gucci will do very well across various industries (Gitman and McDaniel, 2008, p.295). Besides, it is helpful to provide the consumers with a range of products from which they can make choices. Players in a competitive market environment appeal to the customers on different choices of products offered rather than trying to win the primary buying motives (Smith, 1956, p.3). TESCO is an example of companies that consider choice as benefits associated with their products and is opposed to companies such as ALDI that provides no choice (Ellis et al, 2011, p.69). This also applies to the color and packaging of the products. The manager should ensure different sizes of the product that is for products of this nature such as household consumer goods) as well as different colors. Place as a component of marketing mix Place is another important market element which refers to the location (placement) of a product or service. It is the point at which the products of an organization interact with the potential customers (Kumar, n.d, p.123; Jobber, 2001). Place strategy aims at bringing the products within some purchasing distance (Young and Pagoso, 2008, p.2011) and will consider the site in which a product has been manufactured, the retail stores or warehouses in which they are temporarily stored and all the logistic procedures performed so that the product reaches the consumers. The essence of place strategy is to avail the products and services to customers where and when they are needed (Young and Pagoso 2008; Lamb, Hair, and McDaniel, 2008; Lehu, 2007). Place is an important consideration as the products need to be at the right place and at the right time in order to achieve the objectives of an organization (Kumar, n.d). There are two different scenarios that may be witnessed when proper channel of distribution is not followed by an organization, and both cases bring some loss to an organization. On one hand, if an organization underestimates the demands of its product at some location X so that some customers are not served, the organization loses what ought to be its sales. Besides, the loyalty that the customers had developed to the company may be jeopardized. The company then risks losing its customers to the competitors. On the other hand, when the demands at the location is overestimated so that products stay longer than planned in the stores, the company may suffer losses due to high costs of storage or depreciation of products. Similarly, the manufacturing site needs to be strategically situated with regard to the source of materials. The location for sale will consider the customer needs as well as the ability of the business; a state of balance is necessary between these two factors. On one hand, the place should be accessible by the customers. Customers may lose their taste of a product if they have to travel long distances with huge costs looking for the products. On the other hand, it may be very expensive for a company to be close to all the potential customers. Chandrasekar (2010) outlines some of the questions that a manager needs to answer when deciding the appropriate placement for their products and services. Firstly, the managers need make inquiries on where the buyers often look for such products and services (Chandrasekar, 2010, p.9). Consumers may obtain the products they need from different stores such as boutiques, supermarkets or online retail stores. They can also shop directly from the manufacturers. Secondly, a manager needs to establish the appropriate channel of distribution to be used. This may largely be determined by the types of products offered (Chandrasekar, 2010, p.9). The management may directly sell products to the consumers or use other channels of distribution such as retail stores and warehouses. The choice of distribution channel to be used will be affected by the market circumstances as well as customer needs (Young and Pagoso, 2008, p.213). Products such as insurance policies or medical service will need no intermediary. The concerns here should be the convenience with which the customers can access the products as well as the level of control that an organization will have on its products. The sales of products with moderate prices such as phones and computers may be done directly from manufacturers to the consumers or indirectly through retail outlets. An example is Dell Computers that sells to consumers (Kumar, n.d). Direct distribution enables a firm to have full control over its products. However, the sale of highly priced products such as vehicles may require an exclusive dealer as an intermediary between the manufacturer and the consumer. While adopting indirect distribution channels, the managers should ensure that selected dealers have experience in the industry with good public image. Similarly, the marketing manager needs to consider the placement strategies that the competitors apply in order to offer better competition (Chandrasekar, 2010, p.9). The manager can utilize this information by imitating successful strategies while shifting away from poor strategies observed. Besides, the use of internet is increasing in marketing of products (Lawrence et al, 2000). Managers need to establish online stores in which the customers can purchase the products and services without necessarily visiting the retail stores. Conclusion Competition is real in the current business world and the achievement of a business will be determined by the marketing strategies that it applies. The development of a proper blend of marketing elements will help an organization to position itself above others. One of the elements to be considered is the product- what the firms offers in the market for acquisition and consumption by the users. The product should meet, and possibly exceed, the needs of the consumers. Another consideration is the placement of the products and services. The achievement of organizational objectives will require that products be availed at the right at the right time. References Barabba, V., Huber, C., Cooke, F., Pudar, N. Smith, J and Paich, M. 2002. Approach for Creating New Business Models: The General Motors OnStar Project, Interfaces, 32(1), pp.20-34 Bennett, A. R. 1997. The Five Vs - A Buyer’s Perspective of the Marketing Mix. Marketing Intelligence & Planning, 15(3), pp.151-156. Booms B. 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Advertising Age, 61(41), 26. Lawrence, E., Corbitt, B, Fisher, J.A, Lawrence, J. & Tidwell, A. 2000. Internet Commerce, 2nd ed.). John Wiley & Sons Australia Ltd, 79. Lehu, J. 2007. Branded Entertainment: Product Placement and Brand Strategy in the entertainment business. London: Kogan Page Limited. McCarthy, E. J. 1964. Basic Marketing, IL: Richard D. Irwin. Möller, K. 2006. The Marketing Mix Revisited: Towards the 21st Century Marketing by E. Constantinides. Journal of Marketing Management, 22(3), 439-450 Popovic, D. 2006. Modelling the Marketing of High-Tech Start-Ups. Journal of Targeting, Measurement and Analysis for Marketing, 14(3), 260-276. Smith, W.R. July, 1956. Product differentiation and market segmentation as alternative marketing strategies, The Journal of Marketing, Walter van Walterschoot and Christophe Van den Bulte. The 4p classification of the marketing mix revisited, Journal of Marketing, 56, 83-93 Young, F and Pagoso, C. 2008. Principles of Marketing' 2008 Ed. 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