Elements of Marketing Mix Essay

Elements of Marketing Mix â€Å"A typical marketing mix includes a product, offered at a price, with some promotion to tell potential customers about the product, and a way to reach the customer’s place† (Perreault & McCarthy, 2004, pg. 36). A company will use the marketing mix in order to control variables in marketing to satisfy a target group. This paper will describe the four elements of the marketing mix; product, place, price, and promotion. In addition, the four elements of the marketing mix will be discussed on the impacts in the development of Starbuck’s marketing strategy and tactics. Product†The product area is concerned with developing the right â€Å"product† for the target market† (Perreault, 2004, pg. 38). This requires a company to determine what item or service is desired by the customer in order to fulfill needs. The product needs to provide a service, cover the expected needs for the customer, or deliver the expectations created by other elements of the marketing mix. Service, benefits, branding, and packaging are some things that are taken into consideration with an organization’s product (Perreault et al, 2004). The overall objective is to offer a product that will satisfy the wants and needs of people. Place†Place is concerned with all the decisions involved in getting the â€Å"right† product to the target market’s place† (Perreault et al, 2004, pg. 39). Place refers to the delivery of a product or service to a location that customers may obtain from. This step is needed to get the finished product from the company or origin to the consumer. Marketers need to consider the most efficient method to distribute an organizations product. Channel type, market exposure, locations of stores, service levels, means of transportation and distributing are factors that are taken into considers when marketers need to develop a strategy for place (Perreault et al, 2004). The overall objective is creating a place in order for customer’s to buy the product. Price†Price setting must consider the kind of competition in the target market and the cost of the whole marketing mix† (Perreault et al, 2004, pg. 40). The price is the amount that will be charged for the product. â€Å"Managers  must know current practices as to markups, discounts, and other terms of sale† (Perreault et al, 2004, pg. 40). The prices set by competitors will affect the price of the product. Organizations use pricing techniques in order to reach a competitive price of the product. Prices are set by a company in order to become profitable or to even reach the break even point. Flexibility, product life, cycles, geographic terms, discounts, and allowances are factors that must be considered before setting the price of a product (Perreault et al, 2004). In addition, pricing strategies also will vary according to region. For example, a product that sells for a price of 10 dollars in California may only sell for 7 dollars in the state of Georgia. The o verall objective is the set the right price for the product. Promotion†Promotion is concerned with telling the target market or others in the channel of distribution about the â€Å"right† product† (Perreault et al, 2004, pg. 40). Promotion is how the marketer will communicate, inform and persuade customers to purchase a product or service. There are many ways in which to market the product. The marketer must take in account multiple ways of promotion; personal selling, mass selling, and sales promotion. All can be mixed to create the right blend that will target the marketplace. Personal selling involves direct communication between a company and their customer, usually face-to-face. However, direct communication can also be through phone interviews or sales calls, conferences through video and the internet (Perreault et al, 2004). Promotion can also be used to target a large group of consumers at the same time such as radio or television advertising. This is known as mass selling. Finally, sales promotion refers to promoti on activities that do not involve advertising and personal selling. Contest, coupons, and special offers are some examples of sales promotions (Perreault et al, 2004). Starbucks’ Marketing MixStarbucks Coffee mission statement is to â€Å"establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow† (Starbucks, n.d.). Starbuck’s has utilized the four marketing elements to help create an excellent impact in the development of their marketing tactics and strategies. Starbucks originated in Seattle, Washington, over 30 years ago,  and owns more than 12,000 stores worldwide. Starbucks achieved this by creating a successful marketing strategy. Starbucks was recognized 7 times as one of the â€Å"100 Best Corporate Citizens† by Business Ethics Magazine (Shareholder, 2007). Starbucks customers include people of diverse ethnicity, income, and age groups with varying tastes and interest. With this diverse clientele, Starbucks has made marketing a challenge to target all these diverse groups of people. Product†Starbucks is dedicated to purchasing the highest quality coffee and paying premium prices to reflect ongoing commitment to coffee-farming communities† (Shareholder, 2007). The reason Starbucks offer so many different varieties of products is to satisfy the diverse clientele. This company has continuously been able to influence their clientele by offering products that appeal to all cultures. Starbucks has been able to meet a specific market demand. â€Å"Starbucks gives a wide range of food and beverage options, from indulgent treats to lower-fat and reduced-calorie choices for all consumers’ tastes† (Shareholder, 2007). Starbucks continues to innovate and extend the Starbucks Experience with imaginative new ready-to-drink beverages and expanding coffee offerings. PlaceStarbucks’ stores are strategically placed in locations that are visible and have a great deal of traffic. Starbucks is successful at placing their products strategically in order to impact sales volume. According to the Starbuck’s 2006 annual report, â€Å"we opened 2,199 new stores globally (ahead of 1,800), at an average pace of six new stores per day, bringing our total to 12,440 stores in 37 countries† (Shareholder, 2007). They have locations on busy street corners, in malls, theaters, office buildings, grocery stores and airports which have allowed them to be clearly visible. Almost anywhere a person turns there is a Starbucks around the corner. PriceStarbucks does not consider their price to strategy to be of significance compared to the other elements in the industry. â€Å"The company’s 12-ounce tall latte ranges from $2.25 in Minnesota to $3 in New York City† (Wong, 2004). Like any company, prices are based on the level of economy in each area. Starbucks prices largely are also based on manufacturing.  Starbucks’ prices reflect cost of coffee beans, sugar, geographical areas, and the overall experience. Distribution also plays a role in how the product is priced at each company. PromotionStarbucks employs a mix between personal selling and sales promotion. â€Å"Personal selling lets the salesperson adapt the firm’s marketing mix to each potential customer† (Perreault et al, 2004). Starbucks does not just have salespeople, but baristas. Starbucks’ baristas inform and sell the product face-to-face to the customers. Starbucks’s promotions do not include traditional advertising, but global sales promotions. Sales promotions spark purchases by customers through different channels. In August of 2006, Starbucks supported Jumpstart’s Read for the Record campaign. They sold 53,000 copies of The Little Engine That Could and hosted 330 reading events setting an official Guinness world record. Furthermore, incentive sales promotions included donating 5 cents for every bottle sold for the Ethos Water Fund. The Ethos Water Fund focuses on improving local water sources and providing sanitation and hygiene education to the communities in Ethiopia and Indonesia (Shareholder, 2007). People want to be apart of Starbucks’ global efforts and these are examples of effective sales promotions. ConclusionWhen developing a marketing, all decisions impacted the four Ps should be made at the same time. The four elements of the marketing mix are equally important. This is because the products, places, prices, and promotions of an organization surround the most important element; the customer (Perreault et al, 2004). According to Starbucks 2006 annual report, â€Å"There are numerous competitors in almost every market in which Starbucks operates and in which it expects to expand in both the specialty coffee beverage business and the specialty whole bean coffee business† (Shareholder, 2007). Starbucks has proven to stay on top of their market. However, Starbucks and any organization need to continuously examine their marketing mix in order to stay competitive and profitable. By successfully completing the circle of the four Ps, Starbucks has established a multi-million dollar organization that is a Fortune 100 Company. References Perreault, W. D. & McCarthy, E. J. (2004). Basic Marketing: A Global-Managerial Approach. The McGraw-Hill Companies. Retrieved Nov. 11, 2007, from https://mycampus.phoenix.edu/secure/resource/resource.aspStarbucks, (n.d.). Retrieved Nov. 11, 2007, from http://www.starbucks.com/aboutus/environment.aspShareholder, (2007). In Starbucks Coffee 2006 Annual Report. Retrieved Nov. 11, 2007, from http://www.shareholder.com/visitors/dynamicdoc/document.cfm?CompanyID=SBUX&DocumentID=1382&PIN=&Page=13&Zoom=1xWong, B. (2004, Sept. 28). In Cup of Starbucks going up average of 11 cents Oct. 6. Retrieved Nov. 11, 2007, from http://seattlepi.nwsource.com/business/192721_coffeeprice28.html