Ask any marketer about Marketing Mix and you are likely to get a mysterious response: "The Four Ps". These are four variables that marketers rely on to build a marketing program: Product, Pricing, Promotion, and Place (distribution). Overall principles that guide the choices of the variables constitute your marketing strategy.
There are two traditional approaches to creating a marketing strategy: STP and ARA.
STP stands for segmentation, targeting and positioning. It is particularly popular with branding agencies. You start with identifying groups of customers with similar needs in the market (segmentation), select specific groups for your campaign (targeting) and then create ads that help to communicate the necessary perception of the brand in the minds of consumers (positioning).
This approach aligns very well with the concept of the Four Ps. Once the process of segmentation is complete, different variations of the product could be offered to different segments at different price levels. Promotion and distribution decisions are easier to make when you know the preferences, behaviors and current perceptions of your chosen customer segments.
| Marketing Mix Elements | Sub-elements |
|---|---|
| Product | Product design Product positioning Product branding Packaging Breadth and depth of product line Customer service Product warranty |
| Price | Manufacturer, wholesaler and retailer pricing Bidding tactics Discounts Skim pricing vs Penetrating pricing |
| Promotion | Advertising (online, offline) Content marketing Social media marketing Search engine optimization Sales force policies Direct marketing Public relations Price promotions - consumer Price promotions - trade Event marketing |
| Place | Direct and indirect channels Channel length Exclusive, selective or intensive Franchising policies Channel coordination and control |
ARA stands for acquisition, retention and add-on selling. This approach focuses on maximizing profitability in the process of obtaining, keeping and nurturing your customers. Different marketing tactics are used for customers in different stages in the life cycle: prospects, first-time buyers, early repeat buyers, core customers, and defectors require different marketing efforts.
| Prospects | First-time buyers | Early Repeat Buyers | Core Customers | Defectors | |
|---|---|---|---|---|---|
| Advertising | Awareness | Reinforcement | Reinforcement | Personal | Apology |
| Sales Force | Closers | Personal Service | Personal Service | Personal Service | Closers, personal service |
| Pricing | Low | Moderate | Increasing | Higher | Higher |
| Promotions | Trial | Similar to trial | Limited | Reward | Apology |
| Product offerings |
Lead | Second lead | Add-on | Add-on | Broad |
| Customer Service | Limited | Problem-focused | Problem-focused | Personal Attention | Problem-focused |
In a nutshell, marketing mix frameworks help to guide our thinking in terms of both marketing strategy and tactics. They are also a great starting point for a strategy brainstorming session.