How does the marketing concept affect decisions made about the product mix

A marketing mix includes multiple areas of focus as part of a comprehensive marketing plan. The term often refers to a common classification that began as the four Ps: product, price, placement, and promotion.

Effective marketing touches on a broad range of areas as opposed to fixating on one message. Doing so helps reach a wider audience, and by keeping the four Ps in mind, marketing professionals are better able to maintain focus on the things that really matter. Focusing on a marketing mix helps organizations make strategic decisions when launching new products or revising existing products.

Key Takeaways

• A marketing mix often refers to E. Jerome McCarthy's four Ps: product, price, placement, and promotion.
• The different elements of a marketing mix work in conjunction with one another.
• Consumer-centric marketing mixes incorporate a focus on customers into their approaches.

Understanding Marketing Mix

The four Ps classification for developing an effective marketing strategy was first introduced in 1960 by marketing professor and author E. Jerome McCarthy. Depending on the industry and the target of the marketing plan, marketing managers may take various approaches to each of the four Ps. Each element can be examined independently, but in practice, they often are dependent on one another. 

Product

This represents an item or service designed to satisfy customer needs and wants. To effectively market a product or service, it's important to identify what differentiates it from competing products or services. It's also important to determine if other products or services can be marketed in conjunction with it.

Price

The sale price of the product reflects what consumers are willing to pay for it. Marketing professionals need to consider costs related to research and development, manufacturing, marketing, and distribution—otherwise known as cost-based pricing. Pricing based primarily on consumers' perceived quality or value is known as value-based pricing.

Placement

The type of product sold is important to consider when determining areas of distribution. Basic consumer products, such as paper goods, often are readily available in many stores. Premium consumer products, however, typically are available only in select stores. Another consideration is whether to place a product in a physical store, online, or both.

Promotion

Joint marketing campaigns also are called a promotional mix. Activities might include advertising, sales promotion, personal selling, and public relations. A key consideration should be for the budget assigned to the marketing mix. Marketing professionals carefully construct a message that often incorporates details from the other three Ps when trying to reach their target audience. Determination of the best mediums to communicate the message and decisions about the frequency of the communication also are important.

Value-based pricing plays a key role in products that are considered to be status symbols.

Special Considerations

Not all marketing is product-focused. Customer service businesses are fundamentally different than those based primarily on physical products, so they often will take a consumer-centric approach that incorporates additional elements to address their unique needs.

Three additional Ps tied to this type of marketing mix might include people, process, and physical evidence. People refer to employees who represent a company as they interact with clients or customers. Process represents the method or flow of providing service to the clients and often incorporates monitoring service performance for customer satisfaction. Physical evidence relates to an area or space where company representatives and customers interact. Considerations include furniture, signage, and layout.

Additionally, marketers often study consumers who frequently will influence strategies related to service or products. This also requires a strategy for communicating with consumers in terms of obtaining feedback and defining the type of feedback being sought.

Traditionally, marketing commences with identifying consumers' needs and ceases with the delivery and promotion of a final product or service. Consumer-centric marketing is more cyclical. Reassessing the customers' needs, communicating frequently, and developing strategies to build customer loyalty are the goals.

As with all areas of business, decision-making in marketing is crucial. 'Product' is one of the 4Ps of the marketing mix. As a result, marketing managers must make countless decisions regarding the product or service they are trying to sell. What are the critical product mix and product line decisions? And how can we ensure that marketers make the appropriate decisions? Read along to learn all about product decisions.

Product Decisions Definition

Let's first examine the definition of product decisions.

Product decisions are decisions to be made about the product or service a company wants to sell. These decisions are vital to creating a successful marketing mix to meet the company's objectives.

Before we discuss the technical aspects of product decisions, let's quickly take a look at some examples of the types of decisions marketers might make. While making product decisions, marketers consider:

1. The core benefit of the product. For example:

• Mineral water quenches your thirst.

• Buses take you from point A to B.

• The supermarket allows you to shop for daily groceries.

• Facebook is the platform that keeps you in touch with friends and family.

• StudySmarter helps you ace the exams.

While the core benefit stays more or less the same, customers' wants and needs can change over time, and thus the business must be prepared to adapt accordingly.

2. The nature of the product and service.

The nature of Starbucks coffee is its ingredients, type of coffee, and cup size.

• The main ingredients are roasted coffee beans, sugar, milk, or cream.

• Types of coffee include blonde roast, medium roast, and dark roast.

• The cup size can be short, tall, or grande.

The nature of the product is what constitutes the product and should be developed according to the customer's needs and wants.

3. Augmented features.

These extra services come with the product, such as guarantee, installation, customer support, and maintenance. Besides product quality, augmented features play an essential role in turning a new customer into a regular one.

Product Decisions: Product Differentiation and USP

A product's unique selling points are features that differentiate it from its competitors. In other words, it is what the business can offer but others can't. For instance, a product can be cheaper, safer, faster, chicer, more friendly, or visually appealing.

• Apple doesn't just sell iPhones; they sell a lifestyle. Owning an Apple product is like having a friend who gives you hopes, dreams, and aspirations.
• Adidas is a renowned manufacturer of shoes, sporting clothes, and goods that appeal to a wide demographic.
• Starbucks sells high-quality roasted coffee and provides a cozy space for friends and family to gather.

Product Attribute Decisions

One of the primary decisions marketers have to make involves decisions about product attributes. Product attributes are the characteristics and defining features of a product. They are individual product decisions and are as follows:

• Product quality decisions - The quality of a product is crucial for its marketing. It plays a key role in positioning as products can be positioned based on their high quality (e.g., high-performance luxury cars or high fashion clothing made from the best quality fabrics). Product quality is also essential for providing value to customers - a high-quality product can be a value-adding feature that results in customer satisfaction.

• Product feature decisions - Another element of product attributes are the product's features. Product features are crucial for differentiation. Adding additional features makes a product stand out from similar products offered by competitors. So, how do marketers know which product features to add? Through market research. Of course, adding a random product feature will not automatically guarantee success. However, market research can help companies gain insight into what customers actually want and need regarding a product, leading to higher customer satisfaction.

• Product design decisions - Similarly to product features, product design can help marketers differentiate their offerings from competitors. For example, a functional design can make it easier for customers to use a product, leading to fewer complaints, returns, etc. On the other hand, product style can capture customers' attention.

For example, Apple is known for its innovative and high-performance MacBooks. However, this product attribute is only part of the company's success, as many other tech companies offer similar products. The MacBook's sleek design and user-friendliness (ease of use) differentiate the product from its competitors.

Individual Product Decisions

Now that we have covered product attribute decisions let's look into other individual product decisions. Individual product decisions refer to decisions marketers must make about one particular product or service. They include decisions about the product's attributes, branding, packaging, and the additional services attached to the product (see Figure 1 below).

Product Decisions: Branding

After product attributes, the following key decision marketers must make involves product branding. Should we use the same logo? Will we use the same brand name? We will cover the answer to these questions in more detail later in the explanation, but for now, let's look at the importance of branding.

The brand name, logo, slogan, etc., are key features that help customers identify a product. Branding can add more customer value by further differentiating a product from the competitors. It also helps strengthen customer relationships as customers attach meaning and develop emotional connections with brands.

Check out our explanations of brand management and brand awareness to find out more about the importance of branding.

Product Decisions: Packaging and Labeling

Another product decision marketers must make includes packaging. What kind of packaging will we use to make our product stand out? Can we use a particular type of packaging to differentiate our product from similar products on the supermarket shelf?

The primary function of packaging is to hold a product and protect it from damage.

However, due to the nature of today's competitive environment - high competition and numerous similar product offerings - packaging plays an essential role in product differentiation. Marketers can differentiate packaging based on:

• Functionality - Relates to the convenience of removing the packaging and using the product. Functionality is especially relevant when using online distribution channels. Customers do not want to receive dozens of boxes and plastic wrappers when shopping online.

• Design - Some brands might add quirky or colorful designs to their packaging to grab customers' attention. For example, certain chocolate and tea products are packaged in colorful boxes with floral designs.

• Branding - A Starbucks cup is recognizable (Starbucks logo on a white paper cup) due to the branding on its packaging.

• Safety - Food products are packaged in ways that avoid spillage or contamination.

Another essential product decision element is labeling. Most brands add logos and labels to their products, which adds to their branding. For example, Nike labels its products with its iconic check mark, adjusted to fit each product's size. On the other hand, food and beverages legally have to be labeled with an ingredient list. These regulations are in place to protect customers.

Product Decisions: Additional Services

Finally, additional services also play an essential role in product decisions.

Support services are additional services that customers benefit from when purchasing a product.

Companies often pair support services with products to increase the value they bring to the customer. Support services can be of significant value, like helping a company integrate a new software system into its operations after purchasing a new software. On the other hand, support services can be minor, like offering free returns on products purchased online. Support services like post-sales communications can help a brand strengthen its customer relationships.

Product Line Decisions

The next element marketers must consider when creating a product strategy includes product line decisions.

A product line is a group of related products that function similarly and are sold to the same customer segment.

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