Market components are commonly referred to as marketing mix.
Marketing mix consists of the following components:
i) Product
Product refers to tangible, physical products or services that a business offers for sale. During the product design and development, an entrepreneur must make decisions pertaining to the following:
- Brand name
- Functionality
- Styling
- Quality
- Safety
- Packaging
- Repairs and Support
- Warranty
- Accessories and services
ii) Place/ Distribution
Place refers to the actual location where the product is to be sold. It includes the activities that make the product available to target consumers. In this case, an entrepreneur must make decisions pertaining to:
- Distribution channels
- Market coverage (inclusive, selective, or exclusive distribution)
- Specific channel members
- Inventory management
- Warehousing
- Distribution centers
- Order processing
- Transportation
- Reverse logistics
iii) Price
Price is the unit value attached to a product i.e. the amount of money that customers have to pay to obtain the product. The entrepreneur in this regard must make decisions in relation to:
- Pricing strategy (skim, penetration, etc.)
- Suggested retail price
- Volume discounts and wholesale pricing
- Cash and early payment discounts
- Seasonal pricing
- Bundling
- Price flexibility
- Price discrimination
iv) Promotion
Promotion is the process of letting buyers know about a product, how it is made, its benefits, cost, and quality among others.
It constitutes the activities that communicate the benefits of the product and persuade target customers to buy it. The marketing communication decisions include:
- Promotional strategy (push, pull, etc.)
- Advertising
- Personal selling & sales force
- Sales promotions
- Public relations & publicity
- Marketing communications budget
