New and small business owners often question the importance of the marketing mix, but it can determine whether a product succeeds or fails. Of the four aspects of the marketing mix, the product aspect determines what type of product the store is launching, based on buying habits, features and the store’s image. Promotion is about how a product is marketed and determines whether people know about the product. Place concerns how the product is manufactured and stored. Price is determined by the product's uses and life cycle.
The product phase is about creating a product for a store to sell, and the creation is typically broken into stages. If a store decides it wants to sell boots, then it will perform research to see what type of boots it should create. A high-end store with high-paying consumers may come out with boots that have superior features and material; a store known for low prices will typically make boots that appeal to consumers looking for a bargain. At this stage, the company develops a product specifically for its customers. If the proper research is not done, then the company may develop a failed product.
Promotion is how the company markets its product so customers can find and identify with it. First, the company determines what marketing methods would work; for example, TV ads work well for average consumer products, but they may not be good for business-to-business (B2B) products. Second, the company must determine the marketing message, which can affect sales. The importance of the marketing mix here is if promotion is underdone, then few people will know about the product, leading to low sales; if overdone, then this devours a lot of the company’s advertising budget and may even turn off potential customers.
Place is about where the product is being made and stored. Manufacturing plants must be carefully selected to ensure that the product can be made as expected. After creation, the product must be stored at affordable warehouses. Choosing the wrong manufacturing plant can lead to inferior product creation, and the wrong warehouse may add more overhead costs to the product.
Price is determined by where the product is in its lifecycle and how the company is using the product. If the product is beginning its lifecycle and is the first of its kind, then a high price may be applied; an older or common product may have a lower price. The product commonly is priced to give the company a profit but, if used as a loss leader to bring in customers, then it may be priced too low to return a direct profit. The importance of the marketing mix during the price phase is that few people may buy a product that is priced too high, and the company may not make an adequate profit if priced too low.
