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Satisfy Consumer Needs

Introduction

When marketing managers are asked if a particular tactic will produce the desired results, their answer has normally been closer to the lines of: it all depends on the product or service, the target demographic, the message and, particularly, how the target customers want to be approached (Beinhocker and Kaplan 2002). All these elements form a part of the marketing mix. Traditionally, marketers use the marketing mix, the 4Ps of product, price, place and promotion, to position the brand and to create brand values around a coherent set of policies for each of these P’s. Marketing mix has been used as a framework which acts as a guideline for marketers to implement a marketing concept. It consists of a set of major decision areas that a company needs to manage in order to at least satisfy consumer needs. This study will relate the concept of marketing mix with the fast changing mobile technology product market. The mobile phone market are no more company driven, rather it is consumer driven. The business environment in which it operates is highly competitive with intense rivalry not only from direct competitors but also from the regulators and the environment.

Analyzing the elements of the Marketing mix 

‘Price’ in the ‘marketing mix’ is the amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service (Beckwith, 2001). This is the only element on the marketing mix that produces revenue while the other three creates costs. By, ‘product’, marketers refer to anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need (Sudhir, et al., 2005). This includes physical objects, services, persons, places, organizations and ideas. ‘Promotion’ refers to activities that communicate the product or service and its merits to target customers and persuade them to buy (Kotler & Keller, 2006). It is concerned about delivering the sales message and traditionally has consisted of Advertising, direct marketing, sales promotion, public relation, publicity and personal selling. ‘Place’, as the name suggests, refers to the geographic locations which has become increasingly significant in the wake of globalization. Every industry has to consider the culture and business practices of the place it is trying to do business with and the entry mode it wants to adapt before entering a different place/country/region.

The ‘people’ (recently added to the marketing mix) aspect of marketing mix signifies the level of customer service, advice, sales support and aftermarket back-up required, involving recruitment policies, training, retention and motivation of key personnel. Marketing is professional practice it involves people. Traditional marketing mix was about dictating the market through price, product, place, and promotion manipulation. Marketing managers have traditionally used it to make better use of the tools and resources available to them in supplying products and services to customers and prospects.

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Analysis and Discussion

A consumer’s utility for a model of mobile phone is a function of the attributes and the price of that model, with the consumer choosing the brand-model that maximizes utility (Sriram, 2005; pg 440). Product plays a big role for global mobile phone companies like Nokia which not only have to keep continuously innovating with their products but also need to change its product according to the ethical and cultural aspects of the local market. It might be argued that even though ‘product’ is an important part of the digital industry, it’s the ‘innovation’ aspect associated with the products that give firms distinctive advantage over its rivals. Eg Sony Ericsson (the Japanese / Swedish firm) has integrated its successful ‘cybershot’ camera within its mobile phones to add value to its offering. Sony has also added its much known Walkman (Sony was the inventor of Walkman) feature to its mobile phone to give customers the best of three worlds (mobile, camera and walkman) in one device. Some might argue that this sort of strategy falls under the ‘product’ category of the marketing mix but, its less associated with the product design and specifications and more with the value and innovativeness.

The price element of the marketing mix has traditionally relied on selecting the price objective by determining demand. Companies have estimated their price by comparing them to their competitors and basing it on a particular pricing method (Petrin, 2005). While the mobile phone industry still considers all these factors in setting its price, competitive pricing has given way to ‘value for money’ pricing. This means that low price as compared to competitors no longer means success in the mobile world. Pricing strategy in the mobile phone industry is more aligned to the company’s value proposition. Eg. Apple charges premium for its handset (iPhone) which is one of the costliest handset in the market, till its handset has achieved higher than expected sales. This is because its price is based not on competitor price but on its value proposition of innovativeness in terms of design and features. Similarly, Nokia N95 (market retail price c£500) is one of the most successful Nokia offerings because it was the first phone to integrate a 5 mega pixel camera with a mobile. Customers are not ‘price sensitive’ any more; they are ‘value sensitive’. They see the value they are getting in terms of price that they pay for the offering.  

While pricing strategy still needs to fit in with the overall mission of organisation, and reflect its financial objectives, it has to be more ‘value based’. Mobile products justify the fact that even though the four Ps are relevant in the current business environment, they probably need to be upgraded to include elements such as ‘innovation’ to reflect the present technology market realities.

The promotion element of the marketing mix has undergone a huge change within the last few years. According to the Mobile Marketing Association, by 2008, 89 percent of brands will use text and multimedia messaging to reach their audiences, with nearly one-third planning to spend more than 10 percent of their marketing budgets on advertising in the medium (Graham, 2008).

The newer element of marketing mix, ‘people’ is used to define modern mobile consumers and classifies consumers into a single entity. Researchers argue that ‘people’ cannot be classified as a single entity as requirement for product and services may vary. Also, increasing consumer power and sophistication due to wide availability of information has given rise to personalized marketing which requires interaction and sincere, direct dialog with the customer (Beinhocker, 2002). There is an increasingly need for marketers in the mobile market to identify the constantly changing and evolving customer needs, respond quickly to competitive movements and predict market trends early and accurately.

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Eg. Motorola pioneered the mobile revolution and was the first mobile phone brand to enter the market. But, it has moved from pioneer to a low third (in terms of market share) and currently under threat to lose market share to Sony Ericsson because of its innovative handsets. Eg. Major Motorola competitors like Nokia, Samsung, Sony Ericsson have come out with 5 Mega pixel camera mobiles but Motorola is still to catch up with them in terms of product design and value addition. Some may argue that this falls under ‘product’ part of the marketing mix but it is actually innovation that drives competition. Mobile was an innovative device and the market has always relied on innovation, which can be in terms of product or service. With organizations already providing internet access over mobile phones, the new trend is to add the capability to view television programs on the mobile. Rather than the 4P’s, performance in the mobile industry is driven more by changes tied to intrinsic preferences which can be because of the changing portfolio of models in the product line and/or modifications in the attributes and prices of the models in the product line.

While the 4P’s theory is still relevant in terms of marketing theory and practice, it oversimplifies the reality of marketing management in terms of mobile phone market (Brassington & Pettitt, 2003). It is more organization-centric and says about the interactions between the mix variables. Also, recent development in technology has led to the concept of Customer Relation Management which encourage relationship building with the customer. The 4P’s of marketing rely on more transactional variables. The mobile phone product is one such product where staying close to the customers is extremely important. Companies not only need to know who their customers are but also what they value, in terms of add-on services. Comaines need to understand the need for product extensions by maintaing a direct contact with their customers, the highly visible nature of the service process, and the simultaneity of the production and consumption (Coviello & Brodie, 2001). The extension allows a more thorough analysis of the marketing ingredients necessary for successful marketing (Akcura et al., 2004).

Also, depending on the product line, different elements of marketing mix may have varying importance attached to them. Eg. Previous financial researchers done by (Driussi, 2007; pg 57) have revealed that in some cases a 1 % change in price can deliver a 10% plus improvement in profit. This might mean that businesses deal with pricing with much more rigor that their product design, channel management or promotions planning. 

Despite the background and status of the Marketing mix as a major theoretical and practical parameter of contemporary marketing, several academics have at times expressed doubts and objections as to the value and the future of the Mix, proposing alternatives that range from minor modifications to total rejection (Brassington & Pettitt, 2003). The common issues where researchers feel they marketing mix has its limitations are, its inadequacy to address specific marketing situations like the marketing of services, the management of relationships or the marketing of industrial products. Due to these factors, researchers believe that the marketing mix theory has to be broadened to suit the current market conditions. Consumer behavior in the mobile phone industry has also evolved with a rise in the over the mass consumer markets towards increasingly global, segmented, customized or even personalized markets of today (Kotler & Keller 2006) where innovation, customization, relationships building and networking have become issues of vital significance. The new marketing principles imply that marketing activities should be based on identification of customer needs and wants, typical external and therefore uncontrollable factors (Naik et al., 2005). Researchers believe that by expanding the theoretical scope of the marketing theory, it will be easier to reflect on urge to better understand the managerial consequences of transformations taking place and identify sources of superior firm performance in constantly evolving competitive environments (Constantinides, 2001). Draganska (2006) believes that the growing pressure on marketers to better identify and satisfy constantly changing customer and industry needs, the increasing importance of services and the need to build-up long-lasting relationships with the client, have further contributed to the exposure of several limitations of the 4P framework as a marketing management tool. 

Conclusions 

The changing marketplace dynamics of mobile phone industry has meant that marketing mix as a differentiation strategy needs massive upgrading. The rise of competition, globalization, increasing use of technology in marketing practices has changed the traditional way to marketing to people. There are no certainties and no guarantees of success within the mobile phone industry even if companies get their 4P’s right. This is because, what works with one group of customers may not work with another, and some things which traditionally used to work may not work at all. In the continuously changing marketing environment, the marketing mix is still relevant but strategies based on them may not necessarily work. There are more variables and elements to the mix than the 4P’s, which depends of the industry type, market structure, competition and other related factors. Graham (2008; pg 40) while referring to the 4P’s states that rather than bouncing the four (price, promotion, people and place) balls at one time, marketers need to juggle up to a dozen or more at the same time. It is worth mentioning that in the wake of changing consumer preferences, marketing managers still need to evaluate the effects of product attributes and marketing activities to improve performance in the marketplace.

References

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