MARKETING AND THE INSTRUMENTS OF THE MARKETING MIX 3Th e product tool consists of three layers. Th e core product is the unique benefi t that is
being marketed. In fact it is the position, the unique place in the mind of the consumer, that
will be focused upon. Oft en the brand is a summary, a visualisation of this core benefi t and
all the associations it leads to. Th e core product has to be translated into a tangible product.
Product features, a certain level of quality, the available options, design and packaging are
important instruments by which a core benefi t can be made tangible. Finally, the augmented
product gives the tangible product more value and more customer appeal. Th e augmented
product can be defi ned as the ‘service layer’ on top of the tangible product. It includes
elements such as prompt delivery, installation service, aft er-sales service and management of
complaints.
Price is the only marketing instrument that does not cost anything, but provides the
resources to spend on production and marketing activities. Th e list price is the ‘offi cial’ price
of a product. However, discounts and incentives of all kinds can be used to make the product
more attractive. Systems of down payments and payment periods, combined with attractive
interest rates, can also be used to make the off ering more attractive and ensure that the
immediate budget constraint is less of a problem for the consumer. Th e price instrument is
an ambiguous tool. On the one hand, price cuts are an eff ective way to attract consumers. On
the other, price cuts mean losing margin and profi t. Furthermore, the customer gets used
to discounts and may gradually be educated to buy on price and be a brand-switcher. Th e
regular use of the price instrument is incompatible with building a strong position and a
strong brand on the basis of product characteristics or benefi ts. Th erefore good marketing
can be defi ned as avoiding the price tool as much as possible.
By means of place or distribution, the company manages the process of bringing the
product from the production site to the customer. Th is involves transporting the product,
keeping an inventory, selecting wholesalers and retailers, deciding on which types of outlet
the product will be distributed in, and the assortment of products to be off ered in the various
outlets. Distribution strategy also implies maintaining co-operation between the company and
the distribution channel, and fi nding new ways to distribute products, such as infomercials
(programme-length advertising and selling) and e-commerce.
Promotion or marketing communications (MC) are the fourth and most visible instru-
ments of the marketing mix. Th ey involve all instruments by means of which the company
communicates with its target groups and stakeholders to promote its products or the
company as a whole. Th e instruments of the communications mix are introduced in the
next section.
Good marketing is integrated marketing. Two principles are important when designing
and implementing a marketing mix, namely consistency a n d synergy. Marketing instruments
have to be combined in such a way that the company’s off ering is consistently marketed. In
other words, all marketing instruments have to work in the same direction, and not confl ict
with each other. Th e ice cream brand Häagen-Dazs is positioned as a high-quality treat
for sophisticated young adults. Th is core product or basic positioning is refl ected in the
whole marketing mix. Th e product itself is of excellent quality and made from the best
ingredients. Th e brand name sounds – at least to an American public – exotic, maybe
Scandinavian. Th e price is high, emphasising the exclusive character and the top quality of
the brand. Distribution is relatively exclusive. Th e product is available in special shops or in
separate freezers in supermarkets. Marketing communications refl ect the sophistication and
special, erotic atmosphere of the brand positioning. Similarly, a watch, the basic benefi t of
which is low cost, will be a very simple product with no special features or design. No strong
brand name will be developed, and the basic marketing instrument will be price. Th e watch
will have to be widely available, especially in discount stores and hypermarkets. Promotion
will be limited to in-store communications or a simple presentation of the product in the
retailer’s advertising campaign.
Th e second important principle is synergy. Marketing mix instruments have to be
designed in such a way that the eff ects of the tools are mutually reinforcing. A brand will
become stronger if it is advertised and available in the appropriate distribution outlets. SalesM01_PELS3221_05_SE_C01.indd 3M01_PELS3221_05_SE_C01.indd 3 5/28/13 11:09 AM5/28/13 11:09 AM