The Four Elements of the Marketing Mix
The concept of marketing mix was first fixed in science in 1964 from Harvard Business School by professor Neil Borden. However, its beginnings go back to the 40's of the previous century, when D. Kalliton firstly applied the so-called "recipe approach" to the study of marketing expenditure. In 1960 for the purpose of creation skilled staff, marketing mix was synthesized of such elements as product, price, place, and promotion, creating a model of 4P.
- Product is the key element of the marketing mix. It is the goods or services the company can offer to its customers.
- Price is the amount of money the customers have to pay to obtain the product. The company sets prices that are attractive to the customers and profitable for the company itself.
- Place is the third element of the marketing mix. It means finding suitable distribution channels and outlets to reach the customers.
- And the last one is promotion which includes all activities, not just advertising, used to support the product – everything from pre-sales information to after-sales service.
These are the four Ps of the marketing mix, the factors that are used in various combinations for different products and different potential customers. For marketing mix to be effective, its four elements must be balanced optimally between each other and form a harmonious combination. If the product provides consumers with the greatest advantages compared to similar products, the price should display these benefits since it is widely considered as a sign of quality. The aim of developing a set of promotion must be bringing to the target audience uncontroversial information about these benefits, and distribution decisions must comport with a general strategic position of the goods in the market.
Tesco PLC is the largest retail network in the UK. It has shops in 14 countries across Europe, Asia, and North America. The scope of the company is the sale of food and industrial goods.
As for today, Tesco PLC has a selection of about thousand items of goods under its own trademarks of the "economy" class. In addition, the company sells the usual private labels such as Tesco Value and Tesco Standard.
Tesco has expanded geographically and in such areas as retail sales of clothing, books, furniture, electronics, petrol, financial services, telecommunications, and the Internet services, etc. So, the company has a big choice of the goods that it can offer to its customers. It has its own trade mark and sells the goods under it. The company pays great attention on the package, quality of the products, range of products and it helps to keep its position at high level.
Price policy of Tesco is various. The company has its own labels, such as Tesco Value and Tesco Economy, under which it sells products in low economic prices and makes them to be available to everyone. Also, Tesco sets discounts on certain products every day and it helps the company to be competitive on the market.
Tesco PLC has one of the largest distribution networks in the world and is one of the world leaders in the field of logistics management.
26 warehouses have 11500000sq.ft. of the warehouse space. Tesco has four main ways of warehousing and distribution such as Regional distribution centers that are designed for products, stored at room temperature; Customs warehouses; National distribution centers; Mixed distribution centers. There are eight mixed distribution centers in the stores network of Tesco. They are designed for the storage of fresh and frozen products.
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So, the existence of such quantity of the warehouses helps Tesco to reach the product to the customers quickly and in good conditions.
Promotion, or marketing communication, is a development of information relations of the company with its target market (consumers). The main method of marketing communications of Tesco is advertising. Tesco has used many television adverts over the years. Its advertisements are composed of images of the products placed against a white background. Appropriate text or price appears on a red circle. It is not the only way that Tesco uses to let the consumers know about itself and its products.
Other types of product promotion, used by Tesco, are: direct sales – there are consultants who are always ready to give all necessary information about the products; publicity – it is manifested through the presentations of the company in the opening of the various events; publication – annual reports, newsletters, brochures, newspaper articles, and other printed materials that are used as instruments to influence the target markets; sponsorship - the allocation of time, money, and material resources to support charitable organizations, sports, and other public interest activities.
It is important to add such kind of promotion as sales promotion. It increases the effectiveness of the advertising and direct sales. Sales promotion includes the following kinds of activity: the reward of the shop assistance for a good work; the use of special discounts for the goods that are sold poorly; distribution of free samples of new products; free supplement of a small souvenir to the product; the issue of coupons that give the opportunity to buy goods at a discount; holding of all comers and lotteries.
Furthermore, promotion, not only in Tesco, can not exist without consumer services. Quality customer service can ensure new orders in the future for customers’ satisfaction. Service creates confidence in the organization. An example is the establishment of warranty period of the goods, the ability to return or exchange the item, troubleshooting, and so on.
All the elements of the marketing mix are interrelated and the estimation of the product is carried out on all components of the marketing mix. Each element includes a separate set of actions, the implementation of which forms the appropriate policy in the marketing mix. The relative importance of each individual element of the marketing depends on the various factors such as the type of organization, the type of goods, and consumer behavior.
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