Marketing Mix Modeling is often used to help determine the optimal marketing budget and how to allocate across the marketing mix to achieve these strategic goals. Moreover, such models can help allocate spend across a portfolio of brands and manage brands to create value. The marketing mix is a business tool used in marketing and by marketers .
The marketing mix is often crucial when determining a product or brand's offer, and is often associated with the four Up's: price, product, promotion, and place. [l] In service marketing, however, the four As are expanded to the seven Up's [2] or eight Up's to address the deferent nature of services.Category Deflation Product A product is seen as an item that satisfies what a consumer demands. It is a tangible good or an intangible service. Tangible products are those that have an independent physical existence.
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. 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 fife cycle of the product they are marketing is likely to be and focus their attention on different challenges that arise as the product move. 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 increasing 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. [3] Price 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 ml. [31 When setting a price, the marketer must be aware of the customer perceived value for the product.When there is a high intensity of competitors, it is hard to obtain a profitable market share and a company may decide not to enter a certain market. The third step of segmenting is the first part of the topic of competitor analysis. The need for segmenting a market is based on the fact that no market is homogeneous.
For one product the market can be divided in different customer groups. The variables used for this segmenting in these groups are usually geographical, geographically, behavioral and demographic variables.This results in segments which are homogeneous within and heterogeneous between each other. When these segments are known, it is important to decide on which market to target. Not every market is an attractive market to enter. A little filtering has been done in this activity, but there are more factors to take in account before targeting a certain racket segment.
This process is called targeting. Targeting[edit] After the most attractive segments are selected, a company should not directly start targeting all these segments other important factors come into play in defining a target market.Four sub activities form the basis for deciding on which segments will actually be targeted. The four sub activities within targeting are: analyzing competitors on their resources and skills 3. Considering the company's abilities compared to the competitors' abilities 4. Deciding on the actual target markets.
The first three sub activities are described as the topic competitor analysis. The last sub activity of deciding on the actual target market is an analysis of the company's abilities to those of its competitors.The results of this analysis leads to a list of segments which are most attractive to target and have a good chance of leading to a profitable market share. Obviously, targeting can only be done when segments have been defined, as these segments allow firms to analyze the competitors in this market. When the process of targeting is ended, the markets to target are selected, but the way to use marketing in these markets is not yet defined.
To decide on the actual marketing strategy, knowledge of the differential advantages of each segment is needed.Positioning[edit] When the list of target markets is made, a company might want to start on deciding on a good marketing mix directly. But an important step before developing the marketing mix is deciding on how to create an identity or image of the product in the mind of the customer. Every segment is different from the others, so different customers with different ideas of what they expect from the product. In the process of positioning the company: 1 . Identifies the differential advantages in each segment .
Decides on a different positioning concept for each of these segments.This process is described at the topic positioning, here different concepts of positioning are given. The process-data model shows the concepts resulting from the different activities before and within positioning. The model shows how the predefined concepts are the basis for the positioning statement. The analyses done of the market, competitors and abilities of the company are necessary to create a good positioning statement. When the positioning statement is created, one can start on creating the marketing mix.
