Introduction
A marketing mix is a tool in business used majorly for marketing products, especially to determine a brand or products’ unique selling point. The need for a product to be distinct among many competing businesses is elaborated by this business tool. This business tool can also be used by companies to access the viability of an offer and other marketing strategies they are yet or planning to roll into the market. There are four elements of marketing mix which are always denoted as four P’s: product, price, promotion and place. The four are what makes the marketing mix since they form the core of the marketing system (Gaurav 2010, p. 120). The rationality which managers use to determine and predict the volume of sales while keeping an eye on customer relations is hinged on these marketing mix elements. The following is a report describing the four marketing mix elements and how they are applied to real-world working in retail petrol outlets.
Marketing Mix Elements
Product
Product is an integral part of a business as it is what a consumer needs to satisfy his wants and needs. It can be in a physical or non-physical form, but by and large, it is the determinant of an exchange process which is what business is all about. Physical/tangible products are motors, cars and batteries while intangible products include services or ideas. Just like living things, products to have a life-cycle, whereby, there is a phase for growth, maturity, and finally, a period of decline when their value depreciates resulting in fall in sales (Solomon 2011, p. 181-185). The ability of a business to stay relevant in terms of provision of goods will depend on the ability of the marketers to comprehend the life-cycle of their products fully.
This can be achieved by conducting comprehensive research which also maps out the challenges that the product is bound to face as it moves through the various marketing stages. Since petroleum is classified as a non-durable product, it is actually sold as a consumer product. This means that petroleum value does not depreciate because after it has been consumed by the customer, he/she will need to refill the car or generator to operate it.
Consumers benefit a great deal from petroleum due to its multipurpose nature. Its use is not confined to the car engines alone; it can be used to power other engines, including those of lawnmowers among other appliances with engines. However, the actual product purchased by the consumer is petroleum which can either be diesel, leaded or unleaded petrol (Needham 1996, p.149). There are, however, different brands of petroleum such as Shell and Caltex, but all will depend on the line of operation of the company. This variety in terms of brands gives the marketers the freedom to increase the existing product mix by either expanding the number of brands available to customers or increasing the quality or uniqueness of the current brands.
Price
The price is the value or amount paid by customers for a product. The maximization of profits from a given product and its sustainability is heavily reliant on the price of that product in question. It is very important to set the suitable prices in the market as it will greatly contribute to the success in marketing production.
Due to the high level, competition in the retail petroleum outline industry, the pricing objective should be aimed at gaining long-term sales since petroleum is a basic demand for those consumers who regularly use their vehicles. There is a possibility that retail demand for petroleum will expand during the next five years with an annualized price of 0.6% (Banting & Randolph 2010, p. 123). Therefore, the retailers should plan the pricing process well based on the demand expectation. Most petroleum consumers possess little brand loyalty, and this means that they will definitely shift to a brand with lower price.
Competition in the market proposed positioning strategies and the willingness to pay by the target group, costs incurred by selling the fuel should be considered while pricing the fuel (Brian 2011, p. 201). The pricing environment should also be considered. In places where petroleum products are high, the retailer should set the price within the pricing limits in that particular environment. Fixed prices such as the price of transport and rent should also be considered before deciding on the final price for the product. Other costs that should be considered are the cost of maintenance of the premise and the tools used to store the products, price of administration and cost of advertising the product. Petrol retailers usually use dynamic pricing tactic whereby they can adjust the price of the product to meet changes in the marketplace (Steve 2012, p. 210).
Place
The place is the area where retailers provide their product. The area should be easily accessible by the customers. The place is similar to distribution. Strategies such as exclusive, intensive, franchising and selective distribution can be used by a marketer to complement other marketing mix aspects; the place has the potential to offer competitive advantage opportunity to a retailer especially in a vain chain (Don, Schultz & Tannenbaum 1993, p. 210). Such chains are usually important in adding value to the product.
Supply chain involves all the activities necessary in turning raw materials to finished products that are ready to be consumed by business customers (Michael 2010, p. 98). In automotive fuel industry, the supply chain entails all the services, including transportation, from the fuel refineries to the retail outlets (Michael 2010, p. 98). Petroleum sales and demand in most parts of the world is determined by such factors as economic activity in the area, population size and concentration, geographical size and the distance covered from one place to another by those who own vehicles in the region which is determined by the location of refineries and retail outlets. Consumers who travel in the Northern territories usually require more fuels because the distance to be covered while driving is long, which means that more fuel will be used. This means that retailers will be selling the petroleum in bulk; therefore, they should increase the supply, especially if more people are travelling to the north from the south. Petrol retail outlets that are located along major roads or large intersections usually obtain a large volume of sales as a result of visible location (Gaurav 2010, p. 120).
Promotion
Advertising, personal selling, public relations and sales promotion are the elements of promotion (Koichi 2003, p. 102). Thus, promotion enables the managers, especially the sales and marketing managers, to make their products visible and known to all parties involved in the business process. It is only through visibility arising from communication that the existence of a given product being sold by a company can be known by both the local and international community. The success of promotion mix in a petrol retail company will greatly depend on communication models which is a process by which meaning is transferred from the source (brand of petroleum or retailer) to the receiver (consumer).
There are four features of communication model which comprise of: the source (brand of petroleum or retailer), encoding the message through advertisement, sales promotion, public relations and salesperson pitch (Jerome1975, p. 37). Other features include the media (newspapers, billboards, magazines, radio and television) and receiver who is the consumer. Promotion is said to be complete if a response it got from the consumers either through a message or increase of sales which means that the consumer understood the message being passed and is willing to try the product (Kerin & Rudelius 2001, 146).
Over the past few years, the most popular promotion in the automotive fuel retail industry came with supermarket chains which introduced shopper docket fuel discounts (Koichi 2009, p.100). Four cents per litre discount was offered to the consumers if they purchased a particular brand of petroleum product. Today, this form of promotion in the petroleum industry is still being used by different retailers to persuade consumers to buy from their outlets. Most retailers make this promotion through the television, radio and billboards.
Conclusion
This report has introduced the four marketing mix elements: product, price, place and product, and provided a description of how they are applied to real-world working in retail petrol outlets. A product can be defined as anything that is intangible or tangible. Product is meant to satisfy the consumer’s needs. Price is the value or amount paid by customers for a product. Pricing affect sales and demand of a product Place have the potential to offer competitive advantage opportunity to a petroleum retailer based on the location of the business premise. Lastly, promotion is communication methods used by marketers to provide information about a product to different parties. Most petrol retail outlets offer their products at a discount in order to promote sales (Kerin & Rudelius 2001). These four elements form an integral part of any business. Their rightful combination will ensure the sustained growth of the business. However, when they are not working in tandem, the business is surely headed for extinction.
List of References
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Brian, S, 2011, Engage: The Complete Guide for Brands and Businesses to Build, Cultivate, and Measure Success, New York: John Wiley & Sons, Inc Publishers. pp.201-202.
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Gaurav, A, 2010, Marketing Mix and 4 Ps of Marketing, Massachusetts: Blackwell.
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Kerin, H., & Rudelius, B, 2001, Marketing: The Core, 4th Edition, McGraw: McGraw Hill Publishers.
Koichi, S., 2009, Advertising Theory and Strategies,”16th edition, Japan: Souseisha Book Company.
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Needham, D, 1996, Business for Higher Awards. Oxford: Heinemann Publishers.
Solomon, M, 2011, Marketing to Real People, Real Choices, London: Routledge.
Steve, G, 2012, Strategic Communication: Cases in Marketing, Public Relations, Advertising and Media, Australia: Australian National University Press.