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Mkt 421 - Marketing Mix Starbucks

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Marketing Mix

MKT 421: Marketing

July 4, 2011

Robert Stack

In 1964 the term marketing mix became popular when Neil H. Borden published an article about the concept of marketing. He became familiar with this terminology in the late 1940's because James Culliton used the analogy of the marketing manager being the mixer of ingredients. These ingredients included product, planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. These were then put in four categories by E. Jerome McCarthy known today as the four P's of marketing.


Pricing is the first and most important element of the mix. Price can generate turnover within an organization. The remaining elements are variable costs. Pricing is the most important because it costs to produce and create a product or service. It costs to distribute the new or rehabbed product and it costs to advertise and promote the product. Pricing is the element that supports the other elements of the mix. Pricing is based on supply and demand; this relationship must be evenly balanced for it to work. If the price is too high it can affect sales, if it is too low it can create a loss (Learning Marketing, 2011).

According to Learning Marketing (2011), "Pricing should take into account the following factors: Fixed and variable costs; competition; company objectives; proposed positioning strategies; target group and willingness to pay. An organization can adopt a number of pricing strategies. The pricing strategies are based much on what objectives the company has set itself to achieve" (Pricing Strategies, para 2).


When an organization is ready to launch a new product into the market the group in charge has several questions to answer. The core questions revolve around the target market, the benefits expected, the position of the product within the market, and the element that makes the product stand out. Another important decision that the marketing manager has to make is about branding. Brands have the most power in today's environment; they can give organizations instant sales. A popular brand name can offer quality and comfort to consumers (Learning Marketing, 2011).


The promotion element of the marketing mix represents the means in which the product is communicated to the market. The ultimate goal of this communication is to inform the consumer about the product and in turn creates positive feedback from the consumer. The communication decisions are based on promotional strategy, advertising, personal selling, sales promotions, public relations, and marketing budget (NetMBA, 2011). Another element of this communication to take into consideration is the place the product is being promoted. If the product is being communicated in a global arena, it must be presented in a way that adopts those nations' cultural characteristics.


Place is the element that establishes how an organization will distribute the product or service to the consumer. Along with pricing and promotion this must be balanced to the right time and place. An example would be launching a product that is specifically for summer fun will fail if launched during the winter months. Another aspect of this element is the demand if an organization does not do the market research, and the product is not warranted it can be costly to the organizations bottom line (Learning Marketing, 2011). The two types of distribution methods are indirect and direct. Indirect means the organization is using a manufacturer or wholesaler to transport it to the retail sector. Direct distribution means that the product



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