Marketing mix refers to the combination of controllable marketing variables that the firm uses to pursue the desired level of sales in the target market.
Optimization of the marketing mix is achieved by assigning the amount of the marketing budget to be spent on each element so as to maximize the total contribution to the firm. Contribution may be measured in terms of sales or profits or in terms of any other organizational goals.
Marketing mix models are used to determine the optimal marketing mix. They take into account the market response to the various marketing mix elements and their interactions.
These models include econometric market response models to the marketing mix variables of the firm (and its competitors) as well as microsimulation models, various optimization models, and customized applications of the analytic hierarchy process and other resource allocation models.
- ^ American Marketing Association, AMA Dictionary.