2. The marketing mix

It is useful to look at the marketing mix from two points of view. The first is a simple, practical analysis of how it fits into the operations of the business. Bearing in mind that marketing should have contributed, through market research, to the specification of the product, it is easiest to see it as filling the time and space between when the product comes off the end of the production line and when the ultimate customer buys it. (In fact, if you are making a complex piece of machinery, or selling insurance, it goes beyond this, into after-sales service.)

The businessman's task is to plan how best to fill the gap, in terms of making the best use of available resources to achieve sufficient sales, profitably, to satisfied customers.

If you look at the costs of a hypothetical manufacturing company, you will find a picture which looks, basically, rather like the one shown in Fig. I.I.

1. Value of sales 100

Less

2. Cost of materials 35

3. Labour and related costs 10

4. Overheads 10

= 5. Gross margin 45

Less

6. Selling and distribution costs 30

= 7. Net profit (pre-tax) 15

Fig. 1.1 P/L statement for hypothetical manufacturing company ($OOOs)

To all intents and purposes, item 6 is the marketing mix in this simple trading statement. For the manager with a sales target to meet and a planned gross margin of 45 per cent, the problem is how to use as little as possible of that margin to achieve his sales target, and to have a continuing, viable business and, hence, to make a satisfactory profit.

The second way to look at the marketing mix is to consider what the mix is actually doing to the relationship between the product and its purchasers. In a way, the key to this lies in what I have just said. Most businesses are looking for continuing success. They achieve this basically through satisfied customers and they have to do it in the face of their competitors.

3. Through the elements of the marketing mix, the business sets out to build and maintain its competitive position. In most cases, the most effective way to protect this position is through successfully branding its products. The distinction between a product and a brand is important, as it explains much of what marketing tries to do, and much of the use of advertisements.

A product, in these terms, is quite simply something which is offered to potential buyers and which, while it may be very good of its kind, is not systematically presented in a way which differentiates it from its competitors. A brand, on the other hand, is a product whose producer has set out deliberately and consistently to use every element in its presentation to make it uniquely desirable to its potential buyers. If this is done successfully, it makes the brand extremely difficult to compete with –not necessarily because it is physically that much better than its competitors, but because it has acquired an aura (a 'brand image') which makes it appear that much better.

	Name		Pack design			Advertising
Selling								P oint of sale display material
	Sales literature		BRAND						CONSUMER PREJUDICE
	Price						Public relations
		Distribution policy			Promotion

Fig. 1.2 How a brand fits together

4. A brand is created by all the elements in the marketing mix working together, consistently, to create a clear prejudice in its favour among its customers. In other words, a brand has a place in people's minds, as a brand, whereas a mere product is simply a way of fulfilling a physical need. In a competitive economy, there is a clear theoretical advantage in being a brand.

Diagrammatically, being a brand is quite a simple concept. All the parts of the marketing mix, as a consistent group, contribute their share to the product, so as to help build up a favourable prejudice among its actual and potential customers – roughly as shown in Fig. 1.2. Of course, it may not be necessary to use all the elements in the diagram to build up a particular brand. The possible combinations arc numerous.