According to Stanton, ‘marketing-mix is a combination of four elements product, pricing structure, distribution system, and promotional activities used to satisfy the needs of an organisation’s target market (s) and, at the same time, achieve its marketing objectives.

The elements or variables mixed with the marketing-mix have been developed to a lengthy inventory. Several scholars have classified the varied elements of marketing-mix.

In order to satisfy the needs and wants of its customers, a business enterprise must develop an appropriate marketing mix.

The components of marketing mix are as follows:- 1. Product 2. Price 3. Place 4. Promotion.

Components of Marketing Mix: Product, Price, Place and Promotion

Components of Marketing Mix – Classified by Scholars

The elements or variables mixed with the marketing-mix have been developed to a lengthy inventory. Several scholars have classified the varied elements of marketing-mix. The scholars are not of uniform opinion in this regard.


The particular elements incorporated under these variables can be made ex-facie through the following:

Component # 1. Product:

Following factors are taken into account for outright development of product in the market:

i. Product Planning – (a) Selection of product-line (b) Addition or subtraction of product-line.


ii. Branding

iii. Packaging

iv. Standardisation and Grading:

Ten factors are taken into account for the outright development of a product market. These are — product planning, variety of product, consistency of product, style, brand, packaging, assurance, and level of service, standardisation, and other services. Products of different kinds influence the different kinds of consumers. Hence, Product Differentiation and Market segmentation are necessary to consider in order to frame influencive marketing programme.


a. Product Differentiation:

A producer/manufacturer does efforts to develop differentiation in the product either produced by itself or by other firms/competitors. The marketing programmes are improved and the improved products are launched for it.

Product differentiation is widely used for those products, advertised in the wide field and bought by a large number of customers. For example, eatables, cycles, industrial production, cigarettes, soap and cosmetics.

b. Market Segmentation:


The base of market differentiation is the demand part of market under which production and marketing efforts are adjusted by keeping in mind the necessities of the customers. Market segmentation helps small manufacturers attaining the status of semi monopolistic.

For example, the television and motor car manufacturers in India took over the market of lower income and medium income consumers by manufacture of cheap T.V.’s and motor cars.

c. Market Segmentation and Product Differentiation:

An example of Tata Group of Company can be given in this regard. It produces cosmetics under Tata brand name for the low income group while it produces cosmetics under name of Lakme Industries Ltd. for the middle and affluent class.


d. Packaging:

Packaging protects the product and increases its sale too. Modification in packaging helps for coping with the competition of products. For example, Hindustan Lever Company had to cope with the rival firms by modification in packaging of Lux and Lifebuoy, toilet soaps.

e. Brand:

Brand is the name, symbol, design or position of an item or the mixture of them. It identifies with the particular products and services of manufacturer/seller and these are separated from the competitive firms. An objective of brand is to ascertain the marks by which the customers may raise their demands for that particular item/product which one has satisfied them.


For example, the Philips Company in India has acquired its brand image and loyalty both for radio/transistors.

In brief, the seller should focus on product lines, market segmentation, product differentiation, packaging, branding and standardisation under product planning so that consumers may be satisfied with maximum profit earning.

Component # 2. Place:

A problem of submitting the appropriate products in proper market is included under the location. Following things are included in its scope-distribution field, medium of distribution, location of medium, sales province, transportation, bearer, inventory level and storage. These sub-functions provide with the ownership utility, time and the place.

The distribution channel may be direct from manufacturer to the consumer or there may be some mediators between a manufacturer and consumer such as- wholesaler, retailer etc. Distribution channel depends on several factors like size of company, size of market, scope and nature of competition, several markets, and conditions of atmosphere and the nature of product being sold.


For example, – (i) Direct Marketing takes place in distribution of heavy machines and capital goods. There are no mediators in it. (ii) Consumer goods – For example, mediator’s participation is made in distribution of cosmetics and the textiles. No mediators participate in it. (iii) Pure drinks – It accesses to consumers through the retailers.

The medium of distribution in modern era is made for the transfer of goods from manufacturer to the ultimate consumer.

The principal mediums are as under:

a. Producer → Consumer

b. Producer → Retailer → Consumer

c. Producer → Wholesaler Retailer → Consumer


d. Producer → Agent -> Retailer → Consumer

e. Producer → Agent → Wholesaler → Retailer Consumer

f. Producer → Selling association → Consumer.

Component # 3. Promotion:

A product manufactured by an institution cannot be sold if the product is not promoted by the managers. Promotion is made for more and more sale. Advertisement, personal sale and popularity are resorted for this all.

(i) Advertisement is meant for providing the customers more and more information. Newspapers, magazines, radio, cinema, and television etc., are used for advertisement.

(ii) Personal sale – It is inseparable part of marketing-mix. Personal sale is the best for promotion of heavy machines, capital goods, instruments and capital assets. The problems and doubts faced by customers are removed immediately through it.

Component # 4. Price:


Fixing of price for the items/products and services depends on the self-desire of the institution. Pricing policy for a product should be made by keeping in mind the objectives of the institution.

The objectives related to the pricing policy of an institution include the following – pricing policy, pricing strategy, production costs, conditions of credit, concessions and discount etc. The pricing policy should be determined only when complete information regarding these factors is obtained. Thus, there are a number of elements of marketing-mix.

Following are included in the best marketing-mix by incorporating all these:

a. General Planning:

(i) Assessment of an accepted and possible rate of development

(ii) To assess the market size and the scope, so that profitable business can be carried-on


(iii) Assessment of costs and expenses necessary for the commercial activities

(iv) Management of necessary finance.

b. Product Planning:

(i) Assessment of the products proposed for production

(ii) Improvement in product

(iii) Assessment of branding and packaging policies.


c. Pricing:

(i) Level of price and psychological aspect

(ii) Scope of appropriate profit

(iii) Maintenance of resale-price

(iv) Government control.

d. Channels of Distribution:


(i) Sales made by wholesales

(ii) Appointing authorised sales agencies

(iii) Indirect sale by the sellers themselves.

e. Sales Force:

(i) Assessment of the scope for personal sale

(ii) Scope of wholesalers and retailers

(iii) Assessment of scope for accessing to consumers.

f. Advertising and Sales Promotion:

(i) Assessment of advertisement programme

(ii) Importance to display

(iii) Scope of sales promotion for consumers

(iv) Scope of sales promotion for mediators

g. Physical Handling:

(i) Transportation

(ii) Storage

(iii) Segmentation Policies

(iv) Necessary reduction in costs.

h. Marketing Research:

(i) X-ray on sale

(ii) Survey of the field

(iii) Use of outer agencies.

Profitability should be taken care of specially while framing the marketing-mix on the basis of above elements because profit earning is the prime aim of the marketing process. The marketing manager should therefore, search for such a marketing-mix that can provide optimum profit on the product proposed for sale.

Components of Marketing Mix – Top 4 Components

1. Product:

A product is anything that satisfies what a consumer need and demands for. Goods, services, experiences, events, person, place, properties, organization, information and idea can be considered as a product. Every product has a limited life and thus a product life cycle which includes introduction, growth, and maturity and decline stage. Each stage requires a different blend of marketing mix elements. The Product mix includes the blend of following sub elements – Product variety, Quality, Design, Features, Brand Name, Packaging, Size, Services, and Warranties etc.

2. Price:

Price is the amount a customer pays for the product. It the cost to the customers. Price is the only element of marketing mix which generates revenue. Any changes made to the price of the product affects the demand of the product directly. The marketer should set a price that complements the other elements of the marketing mix.

When setting a price, the marketer must be aware of the customer’s perceived value for the product, cost associated and the competitor’s price. The basic pricing strategies are cost-oriented pricing and market-oriented pricing methods. The Price Mix consists of the blend of various sub elements – list price, discounts, allowance, payment period, credit terms, etc.

3. Promotion:

Promotion is a means of communication that a marketer may use to provide information about the product, price and place to all the stakeholders. Promotion Mix comprises elements such as – advertisement, public relations, direct marketing, and direct sales and sales promotion.

The elements of the IMC (Integrated marketing communication) are:

(a) Advertisement – Any paid form of non-personal communication by an identified sponsor.

(b) Sales Promotion – Any paid form of personal, short term communication.

(c) Personal selling – Any paid form of personal, long term communication by internal employees of an organization with an aim to increase the sales effectiveness.

(d) Direct Marketing – Any paid form of personal, long-term communication using any direct marketing platform like internet.

(e) Public relations – Any non-paid form of short term, indirect communication about the organizational vision and mission.

4. Place (Distribution):

Place is considered as a means of distribution of the product. It is one of the most important element of the marketing mix as it takes care of the convenience of the customers by making the product available. Various distribution strategies are intensive distribution, selective distribution and exclusive distribution. Place Mix comprises a blend of various elements such as – channel coverage, assortments, location, inventory, and transport.

Components of Marketing Mix – 4 Elements (With Their Sub Elements)

The complete set of marketing mix, submixes and elements are given below:

The Marketing mix has four main sub mixes.

They are:

1. The Product Mix

2. The Price Mix

3. The Place Mix or Physical Distribution Mix

4. The Promotion Mix.

Each of the above four is the sub mix of the marketing mix. They can also be called as marketing mix elements.

Each of these elements has sub elements and they are as under:

1. The Product Mix:

The Product Mix includes –

a. Product Planning and Development,

b. Branding,

c. Packaging,

d. Labelling.

2. The Price Mix:

The Price Mix includes –

a. Price policies,

b. Discounts,

c. Credit.

3. Place Mix (Physical Distribution Mix):

The Place Mix includes –

a. Channels of Distribution,

b. Transportation,

c. Warehousing.

4. Promotion Mix:

The Promotion Mix includes –

a. Advertising,

b. Personal Selling,

c. Sales Promotion,

d. Publicity.

Components of Marketing Mix – Product, Price, Promotion and Place

Marketing Mix strategy is an overall marketing approach that is used to achieve of strategy marketing plans.

According to Prof. Borden ‘marketing mix’ consists of the following:

(a) A list of important elements or ingredients that make up the marketing programmes.

(b) A list of forces having bearing on the marketing operations of a firm and to which the marketing manager must adjust in his search for a mix or programme that can be successful.

According to Stanton, ‘marketing-mix is a combination of four elements product, pricing structure, distribution system, and promotional activities used to satisfy the needs of an organisation’s target market (s) and, at the same time, achieve its marketing objectives.

The basic purpose of determining the marketing-mix is to satisfy the needs and wants of the customers in the most effective manner. If the needs of the customers change, the marketing-mix will also be changed.

Marketing-mix implies a firm’s total marketing programme.

It requires decision-making with regard to:

(i) Product,

(ii) Price,

(iii) Promotion, and

(iv) Place.

E.J. McCarthy has called these four marketing decision variables as the “four P’s” of the marketing-mix. Every firm has to determine its optimum Marketing-mix (i.e., best combination of all marketing variables or ingredients) so that it can realize its goals such as return on investment, sales, volume, market share, etc.

Various elements of marketing – mix are interrelated and interdependent as shown in above Fig. From instance, features of a product determine its price, but the price customer can pay also determines the product features. The choice of channels is determined by the nature of product and its price. Similarly, promotional activities add to the cost the product, the nature of product and its price also influence the kind of promotion to be done.

A brief description of the elements of marketing-mix is given below:

1. Product:

Product-mix involves planning, developing and producing the right types of products and service to be marketed by the firm. It deals with the product range, durability and other qualities. Apart from producing the right products, emphasis should also be laid on their branding packaging, colour and other features.

In short product planning and development involves decisions about:

(i) Quality of the product

(ii) Size of the product

(iii) Design of the product,

(iv) Volume of production

(v) Packaging

(vi) Warranties and after sales service,

(vii) Product testing

(viii) Product range, etc.

2. Price:

It is one of the most difficult takes of the marketing manager to fix the right price. The marketing manager has to do a lot of exercise to determine the price. He should determine the price in such a way that the firm is able to sell its products successfully. Pricing also involves establishing policies regarding credit and discount. The variables that vitally influence pricing are demand of the product in question, its cost, and the buying capacity of various kinds of customers, actual and potential competition, and government regulation.

The price – mix includes the following decisions:

(a) Determination of unit price of the product

(b) Pricing policies and strategies.

(c) Discounts, rebates and levels of margins.

(d) Credit policy and

(e) Terms of delivery, payment, etc.

3. Promotion:

Promotion deals with informing and persuading the customers regarding the firm’s product. It involves decisions about advertising, giving and personal selling are important tools to promote the sale of products of firm. The use of promotional activities like contests, free distribution, of samples, etc. is also significant to fifth competition in the market. Thus, mix of advertising; personal selling and sales promotion are used for the promotion of firm and its products.

The promotional tools are briefly described below:

i. Advertising:

Advertising is tool which the marketing manager uses to communicate a message to consumers through newspapers, magazines, television, etc. (called the media of advertising). Marketing managers are faced with the necessity of making numerous decisions with regard to advertising such as – (a) what media should be used? (b) What should be the theme (s)? Prevention of tooth decay? Breathe freshness? Whiteness of teeth? (c) How much should be spent on the programmer? Many firms utilize services of advertising agencies, and specialists in creating campaigns and individual advertisement.

ii. Personal Selling:

Personal selling is another means of communicating to consumers, and consists of direct person-to person interaction between salesman and customers. Sales managers a plan direct and control the efforts of individual sales persons. Personal selling is necessary where the target consumers are industrial organizations or where the products are to technical nature. Through personal selling, the marketing manager can make efforts directly the prospect to win his patronage. This is something that advertising cannot do.

iii. Sales Promotion:

Sales promotion includes all the methods of communicating with the consumers except advertising and personal selling. It includes free samples, premium on sale contests, displays, shows and exhibitions, etc.

4. Place or Physical Distribution:

Place-mix entails activities that are necessary to transfer ownership of goods to customers and to make available goods at the right time and place. Thus, it includes decisions about the channels of distribution and the place at which the products should be displayed and made available to the customers. It is management’s responsibility to select and manage trade channels through which the products will reach the customer at the right time and to develop a physical distribution system for handling and transporting the products through these channels.

The important channels used for physical distribution of goods are wholesalers and retailers. In some cases, the manufacturers even own the retail outlets. For example there are ailing companies in India that own station distributing their petroleum products.

Components of Marketing Mix – 4 Major Ingredients of the Marketing Mix

In order to satisfy the needs and wants of its customers, a business enterprise must develop an appropriate marketing mix. “Marketing mix is the term used to describe the combination of four inputs which constitute the core of a company’s marketing system, the product, the price structure, the promotional activities and the distribution system.” Thus, marketing mix represents a blending of four ingredients or controllable elements desired to satisfy an identified market and to achieve company objectives.

These elements are closely inter-related because decisions or changes in one area usually affect decisions or changes in the others. They must, therefore, be designed to support one another. Each of these variables is in itself a mix of several ingredients. As the needs of the customers change, the marketing mix should also be changed.

Marketing mix represents the total marketing programme of a business enterprise. It involves decisions with regard to- (i) product, (ii) price, (iii) place, and (iv) promotion. According to E.J. McCarthy these four marketing decision variables are the “four P’s” of the marketing mix. Different customer groups differ in demographic and other respects and, therefore, respond differently to the same marketing mix. Consequently every business firm must determine its own optimum marketing mix to achieve its goals.

The optimum mix refers to the best possible combination of the four elements. Such a marketing mix results in successful marketing because it is effectively blended and properly attuned to the environment of the firm consisting of customer’s wants, competition, technology, business legislation, social set-up and the political system.

The four major ingredients of the marketing mix are described below:

Component # 1. Product:

A product is any good or service that consumers want. It is a bundle of utilities or a cluster of tangible and intangible attributes. Product component of the marketing mix involves planning, developing and producing the right type of products and services. It deals with the dimensions of product line, durability and other qualities. Product policy of a firm also deals with proper branding, right packaging, appropriate colour and other product features. The total product should be such that it really satisfies the needs of the target market.

In short, product mix requires decisions with regard to- (i) size and weight of the product, (ii) quality of the product, (iii) design of the product, (iv) volume of output, (v) brand name, (vi) packaging, (vii) product range, (viii) product testing, (ix) warranties and after sale services, etc.

Component # 2. Price:

Price is an important factor affecting the success of a firm. Pricing decisions and policies have a direct influence on sales volume and profits of business. Price is, therefore, an important element in the marketing mix. In practice, it is very difficult to fix the right price. Right price can be determined through pricing research and test marketing.

A lot of exercise and innovation is required to determine the price that will enable the firm to sell its products successfully. Demand, cost, competition, government regulation, etc. are the vital factors that must be taken into consideration in the determination of price. Price mix involves decisions regarding base price, discounts, allowances, freight payment, credit, etc.

Component # 3. Promotion:

Promotion component of the marketing mix is concerned with bringing products to the knowledge of customers and persuading them to buy. It is the function of informing and influencing the customers. Promotion mix involves decisions with respect to advertising, personal selling and sales promotion. All these techniques help to promote the sale of products and to fight competition in the market.

Advertising is a major tool used to communicate a message (called advertising copy) through newspapers, magazines, radio, television and other media of advertising. Advertising component of the promotion mix requires several decisions with regard to the theme of advertising, the media to be used, the advertising budget, etc. Large firms employ advertising agencies and specialists to run advertising campaigns and to prepare individual advertisements.

Personal selling is an effective means of communication with consumers. It involves direct face-to-face contact between salesmen and consumers. Sales managers plan, direct and control the efforts of individual sales persons. Advertising cannot aim directly at the prospect to win his patronage. Therefore, personal selling is required to complement advertising. Personal selling is particularly useful when the product is of a technical nature or where goods are to be sold to industrial and commercial establishments.

Sales promotion consists of all forms of communication with the customers except advertising and personal selling. Free samples, prize contests, premium on sale, displays, shows and exhibitions, etc. are the main techniques of sales promotion. No single method of promotion is effective alone and, therefore, a promotional campaign usually involves a combination of two or more promotional methods.

Growing competition and widening market have made simultaneous use of more than one promotional method all the more necessary. Combination of two or more methods in a single promotional campaign requires an effective blending of promotional inputs so as to optimize the expenditure on each. There is no one ideal promotional mix that fits all situations. While devising a promotional mix nature of product, type of customers, the promotion budget, stage of demand, etc. should be taken into consideration.

Component # 4. Place (Distribution):

This element of the marketing mix involves choice of the place where products are to be displayed and made available to the customers. It is concerned with decisions relating to the wholesale and retail outlets or channels of distribution. The objective of selecting and managing trade channels is to provide the products to the right customer at the right time and place on a continuing basis. In deciding where and through whom to sell, management should consider where the customer wants the goods to be available.

A manufacturer may distribute his goods through his own outlets or he may employ wholesalers and retailers for this purpose. Irrespective of the channel used, management must continuously evaluate channel performance and make changes whenever performance falls short of expected targets. In addition, management must develop a physical distribution system for handling and transporting the products through the selected channels.

In the determination of distribution mix or marketing logistics, a firm has to make decisions with regard to the mode of transporting of goods to middlemen, use of company vehicles or a transporter, the route over which the goods are to be moved, type of warehouses where the goods are to be stored, etc.

Components of Marketing Mix 

Marketing mix is a set of marketing tools that a firm uses to pursue its marketing objectives in a target market.

The variables or elements of marketing mix have been classified into four categories popularly known as the four Ps of marketing as shown below:

1. Product Mix – Product mix refers to activities relating to the product, service or idea to be offered. It involves planning, developing and producing the right type of products and services to be marketed by a firm.

2. Price Mix – Price mix refers to decisions relating to the price charged for a product, service or idea. A marketing manager has to consider many factors while determining the price of a product, e.g. cost of production, middlemen’s margin cost of distribution, selling expenses, price of other competing products, etc.

3. Promotion Mix – Promotion mix refers to activities relating to persuading and motivating customers to buy product. Promotion mix involves decisions with respect to advertising, personal selling, publicity and sales promotion.

4. Place Mix – Place mix or distribution mix consists of two things— physical distribution and channels of distribution. Physical distribution includes all those activities involved in moving products or services from producer to consumer. The channels of distribution are those routes through which goods move from the producer to the ultimate consumer.

Components of Marketing Mix  Four P’s of Marketing

The elements of marketing mix are often called the four P’s of marketing:

i. Product – Goods manufactured by the organisations for the end-users are called products. Products can be of two types—Tangible Product and Intangible Product (Services).

ii. Price – The money which a buyer pays for a product is called price of the product. The price of a product is indirectly proportional to its availability in the market.

iii. Place – Place refers to the location where the products are available and can be sold or purchased. Buyers can purchase the products either from the physical markets or from the virtual markets.

iv. Promotion – Promotion refers to the various strategies and ideas implemented by the marketers to make the end – users aware of their brand. Promotion includes various techniques employed to promote and make a brand popular amongst the masses.

1. Product Mix:

Product refers to goods or services which can be exchanged for a price.

Products can be of two types:

i. Tangible products (Products having physical form)

ii. Intangible products (Products in the form of service).

A business organisation usually sells different types of products. These different products are known as product lines. Combination of all these product lines is the product mix.

Product mix, also known as product assortment, is the total number of product lines that a company offers to its customers. Product is the most viable component of the marketing mix.

Meaning and Types of Goods:

Goods are tangible items that are either consumed directly or used in the production of other goods. Examples of goods are car, bike, soap, bread, jam, chair, table, etc.

The main features of goods are as follows:

(i) They are tangible. They can be seen, touched and felt.

(ii) They can be stored for future use or for sale.

(iii) They can be standardised.

(iv) Goods can be separated from their producers

(v) Goods have utility

(vi) Goods can be owned or processed.

2. Price Mix:

Price mix is an important element of marketing mix. Price can be defined as the economic value of a product normally expressed in form of money. The price of a product should be set in such a way that buyers can pay and company can earn adequate profits.

Pricing decision impacts other elements of marketing mix. It is an effective tool for product differentiation. It helps in regulating the extent of advertising, expenses on product development, promotional activities, inflation in the economy, etc. In other words, price is the force that regulates production, distribution and consumption in the economy.

Factors Determining the Price:

The factors determining the price are given below:

(i) Objective of the organisation – Price of a product depends upon the firm’s objective. Profit maximisation is one of the main objectives of any business organisation. The pricing strategy of the organisation should be in line with the objectives of the organisation.

(ii) Cost of Production – Cost of production is the main component of price. No company can sell its product or services at less than the cost of production. A business has to keep the cost of production in control so that it can flourish.

(iii) Government Regulation – If the price of the commodity and services is to be fixed as per the regulation of the government, it should be in that limit. In India, maximum retail price of various products is controlled by the government.

(iv) Demand for Product – Price Elasticity of Demand plays an important role in fixation of prices. With the presence of substitutes, elasticity of demand is higher. In this situation, demand can be increased by reducing the price of the products.

(v) Market Competition – It is necessary to take into consideration prices of the products of the competitors prior to fixing the price. In case of cut-throat competition, it is desirable to keep the prices low.

(vi) Marketing Strategy – Price is also influenced by the marketing strategy used by the company. Some firms adopt intensive sales promotion techniques to capture the market share, but this increases the price of the products.

(vii) Purchasing Power of Customer – Purchasing power of customers has to be kept in mind before fixing prices. Prices should be consistent with the needs of the customer.

(viii) Risk Factors – Prices should be fixed keeping in view the risk factors. Goods which are sold on liberal terms of credit or seasonal goods may be highly priced to cover the loss of interest or any unusual risk involved.

3. Place (Distribution) Mix:

The place element of the marketing mix is where product production and distribution channels are decided and planned. The decisions made in this step directly affect the types of communication that are used to tell the target audience about a product.

Distribution element involves two broad functions:

i. Choice of distribution channel

ii. Physical distribution which includes transportation and storage of goods.

A business has to wisely decide the distribution channel as it impacts other elements of marketing also. Whatever channel is used, the product should move efficiently and at lowest possible cost from the factory to the consumers. Place decisions in the marketing mix directly affect the company’s promotion activities.

Distribution Channel:

A distribution channel is a chain of businesses or intermediaries through which a good or service passes until it reaches the end user. It can include wholesalers, retailers, distributors, and even the internet.

Channels of distribution can be:

i. Direct Channel—it allows the consumer to buy the good from the manufacturer

ii. Indirect Channel—It allows the consumer to buy the good from a wholesaler or retailer.

Distribution channels can be short or long and depend on the number of intermediaries required to deliver a product or service.

Distribution channel performs the following functions:

i. Sorting – Middlemen procure goods of different nature, size and quality from different sources. These goods are sorted considering various factors by the middlemen.

ii. Logistics and Physical Distribution – Marketing channels are responsible for assembly, storage, and transportation of goods from manufacturers to customers.

iii. Promotion – Middlemen promote sales through personal selling and other publicity measures.

iv. Sharing Risks – Since most of the channels buy the products beforehand, they also share the risk of destruction, breakage, spoilage, price fluctuations, etc., with the manufacturers.

v. Services – Channels of distribution even provide pre-sale and post-purchase services like financing, maintenance, information circulation.

Choice of Channels of Distribution:

(i) Product-Related Factors:

The nature and type of product have an important bearing on the choice of distribution channels.

These factors are:

a. Unit Value – When the product is very costly, it is best to use small distribution channel. For example, industrial machinery or gold ornaments are very costly products. On the other hand, less costly products are sold through longer channels.

b. Perishable Nature – A manufacturer should choose the minimum or no middlemen as channel of distribution for such an item or product which is of highly perishable nature.

c. Technicality – If a product is of a technical nature then it is better to supply it directly to the consumer.

d. Standardisation – Standardised products are those which are pre-determined and there is no scope for alteration. To sell these products, long distribution channel is used. On the other hand, customised products are sold through direct sales channel.

(ii) Market-Related Factors:

Market-related factors are:

a. Nature of Market – In a consumer market, longer distribution channels are used.

b. Size of the Product – If the market area of the product is scattered fairly, then the producer must take the help of the middlemen.

c. Geographical Location – If the buyers are located in a limited area, direct selling can be used. On the other hand, widely scattered customers require the use of middlemen.

d. Buying Quantity – It is useful for the manufacturer to rely on the services of middlemen if the goods are bought in smaller quantity. In case purchases are made frequently, middlemen have to be employed.

(iii) Company-Related Factors:

Following factors affect the choice of distribution channel:

a. Financial Strength – An organisation which has a strong financial base, can evolve its own channels. On the other hand, financially weak organisations would have to depend upon middlemen.

b. Desire to Control – Organisations preferring tight control over distribution channels prefer direct channels and vice versa.

c. Volume of Output – An organisation having large output prefers direct selling. Usually, manufacturers having good reputation in market prefer direct distribution channels.

(iv) Middlemen-Related Factors:

Middlemen play an important role in the selection of a distribution channel.

These factors are:

a. Availability—The availability of middlemen affects the distribution channel. If the desired type of middlemen are not available, a manufacturer may have to establish his own distribution channel.

b. Legal Restrictions—Legal restrictions are imposed by the Government which impact the distribution channel. For example, liquor can be distributed only through licensed dealers.

c. Services—The services provided by the middlemen impact the distribution channel like those who provide storage, transportation, after-sale services, etc., are preferred more.

d. Cost—Cost involved with various middlemen should be compared before deciding the distribution channel.

e. Sales Potential—Manufacturers prefer those middlemen who provide wide market to sell the products.

Physical Distribution:

Physical distribution is a set of activities concerned with efficient movement of finished goods from the end of the production operation to the consumer. Physical distribution can be viewed as a system of components (for example, transportation, warehousing, order processing, inventory planning and control, etc.,) linked together for the efficient movement of products. Physical distribution is also known as Supply Chain Management.

Its main elements are:

(i) Warehousing:

These days, production is done in expectation of demand. Therefore, products are to be stored for future demand. Warehousing plays an important role for balancing demand and supply. Location of warehouses for storage of goods meant for sale will depend on the nature of the product. A warehouse should be located in such a way that it ensures regular supply of goods to the consumers at minimum cost.

Warehouses may be classified as:

a. On the basis of commodity, and

b. On the basis of ownership.

Warehouses offer a number of direct advantages to manufacturers and sellers, and indirect advantages to customers. Consumers have various indirect benefits like continuous availability, low price, quality, etc.

(ii) Inventory Planning and Control:

Inventory refers to stock of goods meant for the future sales. The primary purpose of holding inventory is to meet market demand. An organisation always maintains adequate stocks to meet customer orders immediately. Inventory control implies control over the size of inventory. It is the process of deciding what and how much products are to be kept in stock. The most popular technique for inventory control are Economic Order Quantity (EOQ), Inventory Turnover Ratio, ABC Analysis, etc.

(iii) Order Processing:

A company receives orders from other companies, middlemen, or directly from customers through e-mail, fax, phone, or salesmen. These days, organisations are investing money in upgrading information technology systems to make order processing faster and enhance customer satisfaction.

(iv) Transportation:

Transportation is one of the core components of distribution system. It consists of moving or transferring products from producers to final users. Various transportation modes are railways, roadways, airways, etc. The choice of the mode of transportation depends upon relative costs of different modes available, their speed, availability, etc. Transportation plays a crucial role in today’s global marketing.

It creates the place utility. This issue of ownership deals with whether an organisation should own, contract, or hire transportation means. Depending upon a company’s capacity, it may own its own means of transportation or may go for hire option. Various aspects are to be analysed before selecting the mode of transportation.

4. Promotion Mix:

Product promotion is critical for every business due to the lasting impact promotion has on the clients. The promotion mix is essentially what promoting entails as well as how promoting is effectively done. Promotion is the process of communication with the potential buyers involving information, persuasion and influence. Promotion plays a vital role in establishing a marketing mix. A promotional mix should be designed in such a way that informs the target market audience about the values and benefits of the product or service offered.

The main functions of promotional activities are:

i. The first aim of promotion is to inform the prospective customers about the availability, uses and features of products.

ii. The primary objective in using promotions such as – advertising, sales promotions and public relations is to build sales.

iii. Promotional activities are used to differentiate the product from other competitive products available in the market.

iv. To build a favourable public image, organisations use various techniques for promotion like advertising, public relation, etc.

v. Promotional activities add value to a product by emphasising its special features.

Elements of Promotion Mix:

Promotion is the final element in the marketing mix. More and more promotional activities are required to induce the consumers to purchase more and more products and thus demand for the product is created. A basic purpose of promotion is to let the potential customers know about the products. There is no identical promotion mix for all the organisations. Every organisation has to design its own promotion mix. The elements of promotion mix represent alternative ways to influence the buyers.


Advertising is defined as any paid form of non-personal presentation and promotion of ideas, goods, and services by an identified sponsor. Advertising brings a product to the attention of the potential and current customers.

The main features of advertising are given below:

(i) It is a paid form of communication.

(ii) Adverting is non-personal or mass communication.

(iii) It is a one-way communication.

(iv) It can be done using a wide variety of media such as newspapers, radio, TV internet, etc.

(v) It is a widely used and highly popular tool of product promotion.

(vi) It is done by an identified sponsor. For example, producer.

(vii) It is a costly mode for promoting sales.

Objectives of Advertising:

(i) To fight competition in the market.

(ii) To introduce a new product in the market by creating awareness among the prospective customers.

(iii) To create goodwill for the organisation.

(iv) To educate the customers about the benefits and uses of the products.

(v) To attract new customers.

(vi) To provide useful information to the customers about the product like price, composition, quality, etc.

(vii) To create loyalty for a brand or product.

(viii) To reach inaccessible target customers where it is impossible for a salesman to reach,

(ix) To improve industrial relations.

Sales Promotion:

Sales promotion covers those marketing activities other than advertising, publicity and personal selling that stimulate consumer purchasing and dealer effectiveness. The popular methods used for sales promotion are demonstration, exhibition, exchange offer, seasonal discount, gifts, contests, etc. The sales promotion activities are temporary, non-routine and non-recurring in nature. The basic purpose of sales promotion is to promote on-the-spot buying of products through short-term incentives.

The main features of sales promotion are:

(i) Sales promotion activities are meant to supplement advertising and personal selling.

(ii) It involves all the promotional efforts other than advertising, personal selling and publicity.

(iii) It consists of short-term incentives, schemes, or plans offered to buyers, salesmen, etc.

(iv) It involves non-routine selling activities.

Objectives of Sales Promotion:

The main objective of sales promotion is to:

i. Increase immediate sales

ii. Supplement advertising and personal selling

iii. Generate demand for the products during the off-season

iv. Promote on-the-spot buying

v. Clear the stocks

vi. Prompt the existing customers to buy more

vii. Introduce new products in the market.

Personal Selling:

Personal selling is the process of assisting, informing and persuading people to buy a product or service through direct personal contact. It involves face-to-face contact between a seller and a buyer. It involves personal conversation and presentation of products with the customers. It is considered a highly effective tool of market promotion.

The main features of personal selling are given below:

(i) Personal selling is face-to-face contact with consumers.

(ii) Basic purpose is to promote products or increase sales.

(iii) It involves two-way communication.

(iv) It is an ability of the salesmen to persuade or influence the buyers.

(v) It is a more flexible way of market communication.

(vi) It is an expensive method. Per contact cost is higher than advertising.

(vii) It is an art to persuade the people to buy more. It involves teaching educating, and assisting people to buy more of a product.

(viii) It is used in all types of businesses.

Objectives of Personal Selling:

i. To increase sales

ii. To introduce new products

iii. To redress customers’ grievances; if any

iv. To collect feedback from customers

v. To persuade the customer to buy the product and switch from rival brands

vi. To persuade dealers to carry the brand

vii. To use one-to-one communication with the customer efficiently so that the customer is satisfied.

viii. To do the complete job of selling which helps in achieving the sales target and, at the same time, capturing market scale.


Publicity is a traditional form of public relations. Publicity is not paid for by the organisation. Publicity comes from reporters, columnists and journalists. It can be considered a part of public relations. Publicity can be positive or negative. Publicity is not always under the control of the company.

The main features of publicity are:

(i) It is a non-paid form of market promotion.

(ii) The company has no control over publicity

(iii) Publicity can be positive or negative

(iv) Publicity is done by the newspapers, magazines, radio, television, etc.

(v) Publicity can be done at a much lower cost than advertising.

Objectives of Publicity:

i. To inform the public about a product or a service

ii. To draw public attention

iii. To warn people of undesirable effects of goods

iv. To save cost because it is cheaper than advertising.

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