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The marketing mix is a business tool used in marketing products.

The marketing mix is often crucial when determining a product or brand's unique selling point (the unique quality that differentiates a product from its competitors), and is often synonymous with the 'four Ps': 'price', 'product', 'promotion', and 'place'. However, in recent times, the 'four Ps' have been expanded to the 'seven Ps' with the addition of 'process', 'physical evidence' and 'people'.[1] Recently, 'four Cs' theory is also in the limelight.

The term "marketing mix" was coined in 1953 by Neil Borden in his American Marketing Association presidential address. However, this was actually a reformulation of an earlier idea by his associate, James Culliton, who in 1948 described the role of the marketing manager as a "mixer of ingredients", who sometimes follows recipes prepared by others, sometimes prepares his own recipe as he goes along, sometimes adapts a recipe from immediately available ingredients, and at other times invents new ingredients no one else has tried. The term became popular in the article written by Neil Borden called The Concept of the Marketing Mix. He started teaching the term after he learned about it with an associate.[2] The prominent marketer, E. Jerome McCarthy, proposed a Four 'P's classification in 1960, which has since been widely used by marketers throughout the world. Since consumerism appeared late in the 1960s, Four 'C's theory has been proposed in Japan (1973) and the United States (1993).

Four 'P's
The 'four Ps' consist of the following:[1]

Product - A product is seen as an item that satisfies what a consumer needs or wants. It is a tangible good or an intangible service. Intangible products are service based like the tourism industry & the hotel industry or codes-based products like cellphone load and credits. Tangible products are those that can be felt physically. Typical examples of mass-produced, tangible objects are the motor car and the disposable razor. A less obvious but ubiquitous mass produced service is a computer operating system.[1] Every product is subject to a life-cycle including a growth phase followed by a maturity phase and finally an eventual period of decline as sales falls. Marketers must do careful research on how long the life cycle of the product they are marketing is likely to be and focus their attention on different challenges that arise as the product moves through each stage.[1] The marketer must also consider the product mix. Marketers can expand the current product mix by increasing a certain product line's depth or by increase the number of product lines. Marketers should consider how to position the product, how to exploit the brand, how to exploit the company's resources and how to configure the product mix so

that each product complements the other. The marketer must also consider product development strategies.[1]

Price The price is the amount a customer pays for the product. The price is very important as it determines the company's profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often, it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix.[1] When setting a price, the marketer must be aware of the customer perceived value for the product. Three basic pricing strategies are: market skimming pricing, marketing penetration pricing and neutral pricing. The 'reference value' (where the consumer refers to the prices of competing products) and the 'differential value' (the consumer's view of this product's attributes versus the attributes of other products) must be taken into account.[1]

Promotion - represents all of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, personal selling and sales promotion.[1] Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and public relations (see 'product' above).[1]

Place - refers to providing the product at a place which is convenient for consumers to access. Place is synonymous with distribution. Various strategies such as intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer to complement the other aspects of the marketing mix.[1][3] the marketing mix elements called product, price, place, and promotion these are called the four elements of marketing mix and also called 4ps of the marketing mix

Four 'C's in Cs compass model (Co-marketing)


A formal approach to this customer-focused marketing mix is known as Four Cs (Commodity, Cost, Channel, Communication) in Cs compass model. Koichi Shimizu proposed a four Cs classification in 1973.[4][5][6] This system is basically the four Ps[7] renamed and reworded to provide a customer focus. The four Cs Model provides a demand/customer centric version alternative to the well-known four Ps supply side model (product, price, place, promotion) of marketing management.

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Product Commodity Price Cost Place Channel Promotion Communication

The four elements of theCs compass model are:


Commodity (Original meaning of Latin: Commodus=convenient) : the product for the consumers or citizens. Not product out. Cost (Original meaning of Latin: Constare= It makes sacrifices) : producing cost, selling cost, purchasing cost and social cost. Channel (Original meaning is a Canal) : Flow of commodity : marketing channels. Communication (Original meaning of Latin:Communio=sharing of meaning) : marketing communication : It doesn't promote the sales.

Framework of Co-marketing:Cs compass model

Cs compass model is a framework of Co-marketing{commensal marketing: symbiotic marketing).

(C1)Corporation The core of four Cs is corporation , while the core of four Ps is customers who are the targets for attacks or defenses. C-O-S(Organization, Competitor, Stakeholder)within the Corporation. (C2)-(C5)four Cs (C2)Commodity, (C3)Cost, (C4)Channel, (C5)Communication (C6)Consumer (Needle of compass to Consumer)

The factors related to customers can be explained by the first character of four directions marked on the compass model:
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N = Needs W = Wants S = Security E = Education: consumer education

(C7)Circumstances (Needle of compass to Circumstances )

In addition to the customer, there are various uncontrollable external environmental factors encircling the companies. Here it can also be explained by the first character of the four directions marked on the compass model:
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N = National and International circumstances W = Weather S = Social and Cultural circumstances

The Four Cs model has been criticized for simply being nothing more than the Four Ps with different points of emphasis. In particular, the Four Cs inclusion of Customers in the marketing mix is criticized, since customers are a target of marketing, while the other elements of the marketing mix are tactics. The Four Cs also evelopment, distribution, and pricing, while assuming that consumers want two-way communications with companies.

Four 'C's in consumer-oriented model


Robert F. Lauterborn proposed a four Cs classification in 1993.[8] The Four Cs model is more consumer-oriented and attempts to better fit the movement from mass marketing to niche marketing.

Product part of the Four Ps model is replaced by Consumer or Consumer Models, shifting the focus to satisfying the consumer needs. Another C replacement for Product is Capable. By defining offerings as individual capabilities that when combined and focused to a specific industry, creates a custom solution rather than pigeon-holing a customer into a product. Pricing is replaced by Cost reflecting the total cost of ownership. Many factors affect Cost, including but not limited to the customer's cost to change or implement the new product or service and the customer's cost for not selecting a competitor's product or service. Promotions feature is replaced by Communication which represents a broader focus than simply Promotions. Communications can include advertising, public relations, personal selling, viral advertising, and any form of communication between the firm and the consumer. Placement is replaced by Convenience. With the rise of internet and hybrid models of purchasing, Place is becoming less relevant. Convenience takes into account the ease of buying the product, finding the product, finding information about the product, and several other factors.

Marketing strategy
Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage.[1]

Developing a marketing strategy


Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives.[2] Plans and objectives are generally tested for

measurable results. Commonly, marketing strategies are developed as multi-year plans, with a tactical plan detailing specific actions to be accomplished in the current year. Time horizons covered by the marketing plan vary by company, by industry, and by nation, however, time horizons are becoming shorter as the speed of change in the environment increases.[3] Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned. See strategy dynamics. Marketing strategy involves careful scanning of the internal and external environments.[4] Internal environmental factors include the marketing mix, plus performance analysis and strategic constraints.[5] External environmental factors include customer analysis, competitor analysis, target market analysis, as well as evaluation of any elements of the technological, economic, cultural or political/legal environment likely to impact success.[3][6] A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement.[7] Once a thorough environmental scan is complete, a strategic plan can be constructed to identify business alternatives, establish challenging goals, determine the optimal marketing mix to attain these goals, and detail implementation.[3] A final step in developing a marketing strategy is to create a plan to monitor progress and a set of contingencies if problems arise in the implementation of the plan.

Types of strategies
Marketing strategies may differ depending on the unique situation of the individual business. However there are a number of ways of categorizing some generic strategies. A brief description of the most common categorizing schemes is presented below: * Strategies based on market dominance - In this scheme, firms are classified based on their market share or dominance of an industry. Typically there are four types of market dominance strategies: ** Leader ** Challenger ** Follower ** Nicher * Porter generic strategies - strategy on the dimensions of strategic scope and strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firms sustainable competitive advantage. The generic strategy framework (porter 1984) comprises two alternatives each with two alternative scopes. These are Differentiation and low-cost leadership each with a dimension of Focus-broad or narrow. ** Product differentiation ** Cost leadership ** Market segmentation * Innovation strategies This deals with the firm's rate of the new product development and business model innovation. It asks whether the company is on the cutting edge of technology and business innovation. There are three types: ** Pioneers ** Close followers ** Late followers * Growth strategies In this scheme we ask the question, How should the firm grow?. There are a number of different ways of answering that question, but the most common gives four answers: ** Horizontal integration ** Vertical integration ** Diversification
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Intensification

A more detailed scheme uses the categoriesMiles, Raymond (2003). Organizational Strategy, Structure, and Process. Stanford: Stanford University Press. ISBN 0804748403.:

Prospector Analyzer Defender Reactor Marketing warfare strategies - This scheme draws parallels between marketing strategies and military strategies.

Strategic models
Marketing participants often employ strategic models and tools to analyze marketing decisions. When beginning a strategic analysis, the 3Cs can be employed to get a broad understanding of the strategic environment. An Ansoff Matrix is also often used to convey an organization's strategic positioning of their marketing mix. The 4Ps can then be utilized to form a marketing plan to pursue a defined strategy. There are many companies especially those in the Consumer Package Goods (CPG) market that adopt the theory of running their business centered around Consumer, Shopper & Retailer needs. Their Marketing departments spend quality time looking for "Growth Opportunities" in their categories by identifying relevant insights (both mindsets and behaviors) on their target Consumers, Shoppers and retail partners. These Growth Opportunities emerge from changes in market trends, segment dynamics changing and also internal brand or operational business challenges.The Marketing team can then prioritize these Growth Opportunities and begin to develop strategies to exploit the opportunities that could include new or adapted products, services as well as changes to the 7Ps.

Real-life marketing
Real-life marketing primarily revolves around the application of a great deal of common-sense; dealing with a limited number of factors, in an environment of imperfect information and limited resources complicated by uncertainty and tight timescales. Use of classical marketing techniques, in these circumstances, is inevitably partial and uneven. Thus, for example, many new products will emerge from irrational processes and the rational development process may be used (if at all) to screen out the worst non-runners. The design of the advertising, and the packaging, will be the output of the creative minds employed; which management will then screen, often by 'gut-reaction', to ensure that it is reasonable. For most of their time, marketing managers use intuition and experience to analyze and handle the complex, and unique, situations being faced; without easy reference to theory. This will often be 'flying by the seat of the pants', or 'gut-reaction'; where the overall strategy, coupled with the knowledge of the customer which has been absorbed almost by a process of osmosis, will determine the quality of the marketing employed. This, almost instinctive management, is what is sometimes called 'coarse marketing'; to distinguish it from the refined, aesthetically pleasing, form favored by the theorists.

Market segmentation
A market segment is a classification of potential private or corporate customers by one or more characteristics, in order to identify groups of customers, which have similar needs and demand similar products and/or services concerning the recognized qualities of these products, e.g. functionality, price, design, etc. An ideal market segment meets all of the following criteria:

It is internally homogeneous (potential customers in the same segment prefer the same product qualities). It is externally heterogeneous (potential customers from different segments have basically different quality preferences). It responds similarly to a market stimulus. It can be cost-efficiently reached by market intervention.

The term segmentation is also used when customers with identical product and/or service needs are divided up into groups so they can be charged different amounts for the services. A customer is allocated to one market segment by the customers individual characteristics. Often cluster analysis and other statistical methods are used to figure out those characteristics, which lead to internally homogeneous and externally heterogeneous market segments. Examples of characteristics used for segmentation:

Gender Price Interests Location Religion Income Size of Household

While there may be theoretically 'ideal' market segments, in reality every organization engaged in a market will develop different ways of imagining market segments, and create Product differentiation strategies to exploit these segments. The market segmentation and corresponding product differentiation strategy can give a firm a temporary commercial advantage.

Criteria for Segmenting


Homogenity (within a segment)

similar responses to marketing mix similar segmenting dimensions

Heterogenity (between segments)


different responses to marketing mix different segmenting dimensions

Substantial

segment is big enough to be profitable

Operational

useful for identifying customers useful in deciding on marketing mix

Basis for segmenting consumer markets


Geographic segmentation

The market is segmented according to geographic criteria- nations, states, regions, counties, cities, neighborhoods, or zip codes. Geo-cluster approach combines demographic data with geographic data to create a more accurate profile of specific [1]
Demographic Segmentation

Segmentation by Age, gender, Income, social class, etc.


Psychographic Segmentation

Psychographics is the science of using psychology and demographics to better understand consumers. Psychographic segmentation: consumer are divided according to their lifestyle, personality, values. People within the same demographic group can exhibit very different psychographic profiles.[2]
"Positive" market segmentation

Market segmenting is dividing the market into groups of individual markets with similar wants or needs that a company divides into distinct groups which have distinct needs, wants, behavior or which might want different products & services. Broadly, markets can be divided according to a number of general criteria, such as by industry or public versus private. Although industrial market segmentation is quite different from consumer market segmentation, both have similar objectives. All of these methods of segmentation are merely proxies for true segments, which don't always fit into convenient demographic boundaries.

Consumer-based market segmentation can be performed on a product specific basis, to provide a close match between specific products and individuals. However, a number of generic market segment systems also exist, e.g. the system provides a broad segmentation of the population of the United States based on the statistical analysis of household and geodemographic data. The process of segmentation is distinct from positioning (designing an appropriate marketing mix for each segment). The overall intent is to identify groups of similar customers and potential customers; to prioritize the groups to address; to understand their behavior; and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment. Revenues are thus improved. Improved segmentation can lead to significantly improved marketing effectiveness. Distinct segments can have different industry structures and thus have higher or lower attractiveness Once a market segment has been identified (via segmentation), and targeted (in which the viability of servicing the market intended), the segment is then subject to positioning. Positioning involves ascertaining how a product or a company is perceived in the minds of consumers. This part of the segmentation process consists of drawing up a perceptual map, which highlights rival goods within one's industry according to perceived quality and price. After the perceptual map has been devised, a firm would consider the marketing communications mix best suited to the product in question.
[edit] Behavioral Segmentation

In behavioral segmentation, consumers are divided into groups according to their knowledge of, attitude towards, use of or response to a product.
Occasions

segmentation according to occasions.we segment the market according to the occasions.


Benefits

Segmentations according to benefits sought by the consumer.

Using Segmentation in Customer Retention


The basic approach to retention-based segmentation is that a company tags each of its active customers with 3 values: Tag #1: Is this customer at high risk of canceling the company's service? One of the most common indicators of high-risk customers is a drop off in usage of the company's service. For example, in the credit card industry this could be signaled through a customer's decline in spending on his or her card.

Tag #2: Is this customer worth retaining? This determination boils down to whether the postretention profit generated from the customer is predicted to be greater than the cost incurred to retain the customer. Managing Customers as Investments. [3] [4] Tag #3: What retention tactics should be used to retain this customer? For customers who are deemed save-worthy, its essential for the company to know which save tactics are most likely to be successful. Tactics commonly used range from providing special customer discounts to sending customers communications that reinforce the value proposition of the given service.
Process for tagging customers

The basic approach to tagging customers is to utilize historical retention data to make predictions about active customers regarding:

Whether they are at high risk of canceling their service Whether they are profitable to retain What retention tactics are likely to be most effective

The idea is to match up active customers with customers from historic retention data who share similar attributes. Using the theory that birds of a feather flock together, the approach is based on the assumption that active customers will have similar retention outcomes as those of their comparable predecessor.
Niche Marketing

A niche is a more narrowly defined customer group who seek a distinct set of benefits. dentified by dividing a segment into subsegments,distinct and unique set of needs,requires speciallization, and is not likely to attract too many competitors.
Local Marketing

Marketing programs tailored to the needs of local customer groups.

Price Discrimination
Where a monopoly exists, the price of a product is likely to be higher than in a competitive market and the quantity sold less, generating monopoly profits for the seller. These profits can be increased further if the market can be segmented with different prices charged to different segments charging higher prices to those segments willing and able to pay more and charging less to those whose demand is price elastic. The price discriminator might need to create rate fences that will prevent members of a higher price segment from purchasing at the prices available to members of a lower price segment. This behavior is rational on the part of the monopolist, but is often seen by competition authorities as an abuse of a monopoly position, whether or not the monopoly itself is sanctioned. Examples of this exist in the transport industry (a plane or train journey to a particular destination at a particular time is a practical monopoly)

where business class customers who can afford to pay may be charged prices many times higher than economy class customers for essentially the same service.