What is the marketing mix?

Once a firm has defined its target market and identified its competitive advantage, it can create
the marketing mix, which is based on the 5Ps discussed earlier, that brings a specific group of
consumers a product with superior value. Every target market requires a unique marketing mix to
satisfy the needs of the target customers and meet the firm’s goals. A strategy must be
constructed for each of the 5Ps, and all strategies must be blended with the strategies of the other
elements. Thus, the marketing mix is only as good as its weakest part. For example, an excellent
product with a poor distribution system could be doomed to failure. An excellent product with an
excellent distribution system but an inappropriate price is also doomed to failure. A successful
marketing mix requires careful tailoring.
For instance, at first glance you might think that McDonald’s and Wendy’s have roughly the
same marketing mix. After all, they are both in the fast-food business. But McDonald’s targets
parents with young children through Ronald McDonald, heavily promoted children’s Happy
Meals, and in-store playgrounds. Wendy’s is targeted to a more adult crowd. Wendy’s has no
playgrounds, but it does have flat-screen TVs, digital menu boards, and comfy leather seating by
a fireplace in many stores (a more adult atmosphere), and it has expanded its menu to include
more items for adult tastes.

Product Strategy
Marketing strategy typically starts with the product. Marketers can’t plan a distribution system or
set a price if they don’t know exactly what product will be offered to the market. Marketers use
the term product to refer to goods, services, or even ideas. Examples of goods would include
tires, MP3 players, and clothing. Goods can be divided into business goods (commercial or
industrial) or consumer goods. Examples of services would be hotels, hair salons, airlines, and
engineering and accounting firms. Services can be divided into consumer services, such as lawn
care and hair styling, or professional services, such as engineering, accounting, or consultancy.
In addition, marketing is often used to “market” ideas that benefit companies or industries, such
as the idea to “go green” or to “give blood.” Businesses often use marketing to improve the long-
term viability of their industries, such as the avocado industry or the milk industry, which run
advertising spots and post social media messages to encourage consumers to view their
industries favorably. Thus, the heart of the marketing mix is the good, service, or idea. Creating
a product strategy involves choosing a brand name, packaging, colors, a warranty, accessories,
and a service program.
Marketers view products in a much larger context than is often thought. They include not only
the item itself but also the brand name and the company image. The names Ralph
Lauren and Gucci, for instance, create extra value for everything from cosmetics to bath towels.
That is, products with those names sell at higher prices than identical products without the
names. Consumers buy things not only for what they do, but also for what they mean.
With their computerized profile-matching capabilities, online dating services are a high-tech way
to make a love connection. Today’s date-seeking singles want more than automated personals,
however. They want advice from experts. At Match.com, popular shrink Dr. Phil guides
subscribers toward healthy relationships. At eHarmony.com, Dr. Neil Clark Warren helps the
lovelorn find a soul mate. 

Pricing Strategy
Pricing strategy is based on demand for the product and the cost of producing that product.
However, price can have a major impact on the success of a product if the price is not in balance
with the other components of the 5Ps. For some products (especially service products), having a
price that is too low may actually hurt sales. In services, a higher price is often equated with
higher value. For some types of specialty products, a high price is expected, such as prices for
designer clothes or luxury cars. Even costume jewelry is often marked up more than 1000
percent over the cost to produce it because of the image factor of a higher price. Special
considerations can also influence the price. Sometimes an introductory price is used to get people
to try a new product. Some firms enter the market with low prices and keep them low, such
as Carnival Cruise Lines and Suzuki cars. Others enter a market with very high prices and then
lower them over time, such as producers of high-definition televisions and personal computers.
Place (Distribution) Strategy
Place (distribution) strategy is creating the means (the channel) by which a product flows from
the producer to the consumer. Place includes many parts of the marketing endeavor. It includes
the physical location and physical attributes of the business, as well as inventory and control
systems, transportation, supply chain management, and even presence on the web. One aspect of
distribution strategy is deciding how many stores and which specific wholesalers and retailers
will handle the product in a geographic area. Cosmetics, for instance, are distributed in many
different ways. Avon has a sales force of several hundred thousand representatives who call
directly on consumers. Clinique and Estée Lauder are distributed through selected department
stores. Cover Girl and Coty use mostly chain drugstores and other mass
merchandisers. Redken products sell through hair salons. Revlon uses several of these
distribution channels. For services, place often becomes synonymous with both physical location
(and attributes of that location such as atmospherics) and online presence. Place strategy for
services also includes such items as supply chain management. An example would be that an
engineering firm would develop offices with lush interiors (to denote success) and would also
have to manage the supplies for ongoing operations such as the purchase of computers for
computer-aided drafting.
Promotion Strategy
Many people feel that promotion is the most exciting part of the marketing mix. Promotion
strategy covers personal selling, traditional advertising, public relations, sales promotion, social
media, and e-commerce. These elements are called the promotional mix. Each element is
coordinated with the others to create a promotional blend. An advertisement, for instance, helps a
buyer get to know the company and paves the way for a sales call. A good promotional strategy
can dramatically increase a firm’s sales.
Public relations plays a special role in promotion. It is used to create a good image of the
company and its products. Bad publicity costs nothing to send out, but it can cost a firm a great
deal in lost business. Public relations uses many tools, such as publicity, crisis management
strategy, and in-house communication to employees. Good publicity, such as a television or
magazine story about a firm’s new product, may be the result of much time, money, and effort
spent by a public-relations department. Public-relations activities always cost money—in salaries
and supplies. Public-relations efforts are the least “controllable” of all the tools of promotion,
and a great deal of effort and relationship-building is required to develop the ongoing goodwill
and networking that is needed to enhance the image of a company.
Sales promotion directly stimulates sales. It includes trade shows, catalogs, contests, games,
premiums, coupons, and special offers. It is a direct incentive for the customer to purchase the
product immediately. It takes many forms and must adhere to strict laws and regulations. For
example, some types of contests and giveaways are not allowed in all the states within the United
States. McDonald’s discount coupons and contests offering money and food prizes are examples
of sales promotions.
Social media is a major element of the promotion mix in today’s world. Most businesses have a
corporate website, as well as pages on different social media sites such as Facebook, Pinterest,
and Twitter. Social media is more powerful as a channel for getting the company’s message out
to the target market (or general public) than traditional advertising, especially for some target
markets. Companies (and even individuals) can use social media to create instant branding. E-
commerce is the use of the company website to support and expand the marketing strategies of
the 5Ps. It can include actual “order online” capabilities, create online communities, and be used
to collect data from both existing and potential customers. Some e-commerce websites offer free
games and other interactive options for their customers. All of this activity helps to build and
strengthen the long-term relationships of customers with the company.
Not-for-Profit Marketing
Profit-oriented companies are not the only ones that analyze the marketing environment, find a
competitive advantage, and create a marketing mix. The application of marketing principles and
techniques is also vital to not-for-profit organizations. Marketing helps not-for-profit groups
identify target markets and develop effective marketing mixes. In some cases, marketing has
kept symphonies, museums, and other cultural groups from having to close their doors. In the
private sector, the profit motive is both an objective for guiding decisions and a criterion for
evaluating results. Not-for-profit organizations do not seek to make a profit for redistribution to
owners or shareholders. Rather, their focus is often on generating enough funds to cover
expenses or generating enough funds to expand their services to assist more people. For example,
the Methodist Church does not gauge its success by the amount of money left in offering plates.
The Museum of Science and Industry does not base its performance evaluations on the dollar
value of tokens put into the turnstile. An organization such as the American Red Cross raises
funds to provide basic services, but if enough funds are raised (beyond just the amount to cover
expenses), those funds are used to expand services or improve current services.

To carry out the marketing strategy, firms create a marketing mix—a blend of products,
distribution (place) systems, prices, promotion, and people. Marketing managers use this mix to
satisfy target consumers. The mix can be applied to nonbusiness as well as business situations.
Product Element of Hilton Hotels Marketing Mix

Hilton Hotels and Resorts can be classified as a full service hotel. Accordingly, the range of its
services is extensive and includes meeting, wedding and banquet facilities and special event
services, restaurants and lounges, food and beverage services, swimming pools, gift shops, retail
facilities and other services.
Generally, products are divided into three levels: core, facilitating and supporting products.
Core products can be explained as a basic form of a product. To put it simply, core products are
the main reasons for customers purchasing from a business. For Hilton Hotels & Resorts core
product is hotel rooms that customers stay in for a specific period of time. Peripheral
services can be explained as additional products and services above the core product that
businesses offer to get competitive edge in the marketplace.
Facilitating products involve services that assist consumers in consumption of core products.
Hilton offers a set of popular facilitating products such as customer services, bars and
restaurants, and online reservation facilities.
Supporting products include additional products and services that are offered in order to obtain
competitive advantage for the business by increasing the value of core products and services. A
range of supporting products offered by Hilton Hotels include 24/7 room service, free
newspapers and magazines for business travelers, concierge services etc.
Augmented product is benefit offer made by businesses that consist of core product and
peripheral services. Augmented products offered by Hilton Hotels & Resorts include
membership discounts, luxurious room and exterior designs, high class restaurants and relaxed
hotel atmosphere.

The ultimate aim of the distribution strategy for a hotel firm can be specified as making available
the products and services to consumers where, when and how they prefer them. Hilton
Worldwide serves guests operating more than 745,000 rooms in more than 100 countries and
territories. Hilton Hotels & Resorts brand in particular operates 206,635 rooms in 85 countries
and territories.
Hilton Hotels & Resorts distribution strategy heavily relies on information technology and
internet in various formats. Firstly, the official website of the company serves as an effective
platform for service distribution as it is supplied with a wide range of features and capabilities
providing practical assistance to customers such as booking a room, planning events and
weddings, scheduling meetings and booking airport pick-ups.
Moreover, the distribution of Hilton Hotels & Resorts products and services is also facilitated
through mobile convenient applications made available for IPhone and Android platforms. Social
media is adapted as another effective instrument by Hilton Hotels & Resorts in distribution of its
products and services.
The main reason behind the selection of internet platform as the base of Hilton Hotels & Resorts
distribution strategy relates to a wide range of conveniences associated with internet.
Specifically, internet presents Hilton Hotels & Resorts customers with the possibilities of
purchasing products and services in advance on the go and within a timeframe of a few seconds.
Price Element of Hilton Hotels Marketing Mix
Pricing strategies used by businesses can be divided into four broad categories within the
framework of Pricing Strategy Matrix: economy, penetration, skimming and premium pricing
strategies.
Economy pricing strategy involves selling products of basic features and characteristics to
consumers with low budgets. Penetration pricing strategy, on the other hand, involves offering
high quality products and services in low prices than the competition in order to increase market
share.
Skimming, as a pricing strategy is opposite to penetration in a way that products and services are
offered for a higher price levels than the competition. The main rationale for the choice of
skimming pricing strategy may include the desire to associate products or services with
exclusiveness and a high quality.
Premium pricing strategy involves charging high level prices for products and services that are
perceived to have excellent quality and additional characteristics and features. As it is illustrated
in Figure 2, the majority of rooms owned by Hilton Worldwide belong to upper upscale and
upscale pricing categories. Accordingly, on the basis of classification above the type of pricing
strategy adopted by Hilton Hotels & Resorts can be specified as premium. Hilton only offers five
star and four star rooms and the company is able to charge its customers at premium levels
because beyond the core product, Hilton also ‘sells’ a set of intangible benefits such as sense of
achievement, high status and luxury.