Marketing Mix
Essay Preview: Marketing Mix
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The term marketing mix was first used in the late 1940s by Neil H. Borden (NetMBA, 2007). The original marketing mix introduced by Borden consisted of product, planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. Later E. Jerome McCarthy grouped the parts into the four P’s of marketing known as product, place, price and promotion (NetMBA, 2007). “A typical marketing mix includes some product, offered at a price, with some promotion to tell potential customers about the product, and a way to reach the customer’s place (Perreault & McCarthy, 2004, p.36). The parts of the marketing mix are considered to be the controllable factors of the marketing plan. The marketing mix satisfies the needs of the consumers in a target market as well as maximizes the performance of the organization. A detailed look into the four P’s of the marketing mix as well as practical application will give greater understanding to how the process works. Whole Foods Market will be used to further explain the four P’s of the marketing mix.
The first component of the marketing mix is product. “The product area is concerned with developing the right product for the target market…(and) may involve a physical good, or service, or blend of both” (Perreault & McCarthy, 2004, p. 38). The product can be a tangible item such as a car, or something intangible such as tax advice. Product also consists of strategy decision areas such as physical goods, service, features, benefits, quality level, accessories, installation, instructions, warranty, product lines, packaging, and branding (Perreault & McCarthy, 2004). The product can be thought of as the complete package from start to finish.
Whole Foods Market focuses on a product line that consists of natural and organic foods. The product line is of the highest quality of naturally preserved foods. When most grocery stores were focused on profit margins, Whole Foods Market was focused on quality of the product. When it comes to its products, Whole Foods Market has a strong philosophy:
We obtain our products locally and from all over the world, often from small, uniquely dedicated food artisans. We strive to offer the highest quality least processed, most flavorful and naturally preserved foods. Why? Because food in its purest state — unadulterated by artificial additives, sweeteners, colorings and preservatives — is the best tasting and most nutritious food available.
(Whole Foods Market, 2007, para. 3)
Whole Foods Market’s product philosophy incorporates many of the strategy decision areas. The physical goods being sold are the organic and natural foods. The features and benefits are described in the nutritional values of the food the company carries. The quality level of the food is highlighted in the second sentence. The products of Whole Foods Market are developed with the customers of the target market at the center.
The next factor in the marketing mix is place. “Place is concerned with all the decisions involved in getting the right product to the target market’s place. A product isn’t much good to a customer if it isn’t available when and where it’s wanted” (Perreault & McCarthy, 2004, p.39). It would not do any good to place snow skis or snowboards for sale on an island in the Caribbean. The better placement of snow skis or snowboards would be in a mountainous state such as Vermont or Colorado. Place also consists of strategy decision areas such as objectives, channel type, market exposure, kinds of middlemen, kinds and locations of stores, how to handle transporting and storing, service levels, recruiting middlemen and managing channels (Perreault & McCarthy, 2004). Simply explained, place refers to how a company will sell its product or service to the customers. If a company is an accounting agency, then the company is at the final stage of the distribution process. If a company produces an item, the company must determine how the item will be distributed to ensure the item is placed in the proper target markets. The internet has made it easier to establish direct sales for companies who may not have had direct sales access in the past. Other forms of direct sales are mail order sales and door to door sales.
Whole Foods Market obtains its products from places all over the world. The food is brought in from organic farmers and food artisans. Once the food reaches the stores, it is warehoused on site and sold directly to the consumers of the target market. The delivery of the products to the consumers is done through direct sales at the stores. The stores are located in markets where consumers’ interests are in organic and healthy food choices. Whole Foods Market gains access to the products it sells through “…the careful judgment of buyers throughout the company” (Whole Foods Market, 2007, para. 2). Whole Foods Market is a strong advocate of organic farming and purchases many products directly from the organic farmers (Whole Foods Market, 2007).
The third factor of the marketing mix is price. “Price setting must consider the kind of competition in the target market and the cost of the whole marketing mix…and must also try to estimate customer reaction to possible prices” (Perreault & McCarthy, 2004, p.40). When setting prices, the company must be able to recoup any expenses involved with the product as well as set a price that consumers are willing to pay. Price also consists of strategy decision areas such as objectives, flexibility, level over product lifecycle, geographic terms, discounts and allowances (Perreault & McCarthy, 2004).
Whole Foods Market, although considered a specialty grocery store,