Marketing Mix

Introduction

For many people, the concept of “marketing mix” is the first thing that they come up with when we ask the question of “what is marketing?” In fact, the marketing mix approach is one of the most famous and widely-discussed concepts in marketing. The term “marketing mix” was coined by Borden (1964) who adopted the idea from Culliton’s (1948) research into marketing costs among manufacturers. It is not a scientific theory, but only a conceptual framework which is based on the “marketing concept” and identifies the principals to which marketers follow to devise strategies to suit their customers’ interest. The idea of marketing mix is similar to that of mixing a cake. Culliton (1948) made the analogies of marketing decisions as the outcome of recipes, and marketers as the “mixers of ingredients” who can choose to adopt various existing recipes at one time, and to develop their own original recipes at another. Marketing mix is suggested to constitute the four fundamental elements of marketing actions; namely, price, place, product and promotion (McCarthy, 1960). Together, these elements act as the means to illustrate the strategic position of a product within the market.

This essay will provide a general description of the marketing mix approach and its contribution as a tool for the implementation of marketing strategies so as to satisfy the needs and wants of the customers. It will then contend that this approach is in some ways flawed, and may sometimes be not applicable to the contemporary marketing environment due to the dramatic changes and movements in the market. Some alternative accounts are proposed. However one should also be cautious that the need for modifications in one approach does not imply the total abandonment of it. Instead, we should focus on the ways in which improvements can be done so as to reconceptualise the efforts on the marketing mix approach to see how it can fit into the current business environment.

The Four Ps

Taking on McCarthy’s (1960) ideas, the four elements of the marketing mix are often referred to as ‘the four Ps’. Product is the physical entity that people sell or buy. It is the central focus where marketing strategies should be targeted at. It is concerned with what the product means to customers and is what keeps the customer attached to the seller. Some marketing decisions to be made include the appearance and functionality of the product. Price is the amount that the customers pay for the product, the element which creates sales revenue. Pricing of a product is affected by a number of factors such as competition and market share. Place, or the distribution channel, is the location where manufacturers can deliver the products to the customers. Marketers have to consider issues relating to transportation of goods, inventory, logistics, etc. Promotion refers to the “business communication” with the customers within the market to generate a positive customer response. Some key processes include advertising, branding, public relations and publicity. Each of these four elements is interrelated, with one impacting on another (Borden, 1964). For instance, the branding strategy a marketer implements will affect the pricing, channel of distribution as well as promotional approaches. Every element plays a significant role and is not trade-off to each other. All of these are basic to marketing decisions and need to be considered and adjusted thoroughly so that they can in combination guide the appropriate marketing programme that will bring about desired consumer behaviour as well as returns.

Contributions of the marketing mix paradigm

The marketing mix is a powerful paradigm that has been popular and dominant in marketing literature and practice since 1950s. It takes into account the different forces from the environment which drive the marketers to produce diverse mixes in devising marketing strategies. The behaviour of customers, the trade, competitors and government make up these important forces (Borden, 1964). It is a simple and straightforward notion in which the ideas can be visualised through drawing a chart of the mix elements. Following the mix, marketing tasks in an organization are separated from other activities and given significance; they are also handed to specialists to handle. Marketers are informed about the fact that interrelations between each P indicate that the focused efforts on one may be a trade-off to another (Goi, 2009). It also provides a clear “checklist” of issues to be addressed and is thus useful for helping marketers to solve a variety of business problems.

The uncomplicated concept is easy to memorize and apply. It serves as a valuable teaching tool to aid the understanding of what marketing is. In fact, numerous marketing textbooks build up on this assumed-to-be indisputable model of marketing (McCarthy, 1960). Marketing mix has been taken by some as the single marketing truth. Marketers normally believe that marketing success is likely to be achieved by optimizing the 4Ps. However, the exclusive focus on managing and studying the use of the mix may be limited and lead one to overlook the meaning of the marketing concepts. Marketers may also fail to genuinely explore the nature of the firm’s market relationships so as to satisfy the needs and wants of the customers (Gronroos, 1994).

Critiques of the approach

The empirical basis of the four Ps and their rationale

The marketing mix is essentially a controlled set of decision variables which the marketers, or mixers of ingredients, manipulate so as to formulate policies to improve business results and optimize returns. Borden originally listed twelve elements of the mix whilst acknowledging that different lists can be employed by different people. The four Ps put forward by McCarthy (1960), and his advocates that contribute to the later prevailing marketing mix approach might be an oversimplified and overly-rigid perspective. It is debatable that how many elements should be included in the mix (Gronroos, 1994). It is hard for a fixed set to contain all the relevant variables to fit every marketing situation. There have been several attempts by the researchers to include extra elements in order to better accommodate specific aspects of marketing. For example,

Booms and Bitner (1980) add the three Ps of participants, physical evidence and process to the original four to apply the concept to service. While Kotler (1986) suggests public opinion and political power, Londre (2009) extends the Ps by adding planning, people, partners, presentation and passion.

Results from research suggest that the seven Ps by Booms and Bitner should replace the original four as the generic marketing mix (Rafiq and Ahmed, 1995). The traditional marketing mix approach is said to lack precise specification of its underlying assumptions and rationale (van Waterschoot and Van den Bulte, 1992). The requirements to classify distinct elements into the mix are also not clear. Although the original approach is built largely on an empirical inductive root, connecting to microeconomic theory from the 1930s (Chamberlin, 1933); later the model evolves to have loosen this linkage with the theory. There is not an agreed objective way to establish the validity of the account.

Failure to fulfill the marketing concept

The mix isolates the individual elements from the rest of the organizational actions, suggesting a separate marketing department carry out different marketing functions and responsibilities in accordance to the mix. It is argued that to truly cater to the needs and wants of the customers, there is a need to blend together the elements and other activities within the firm in an incorporative and interactive manner (Kotler, 1991); production and mechanical services, for instance. Yet, there is an inadequate integrative dimension in the approach itself for this to take place. Further, relying on the marketing mix for a mass market may lead marketers to constantly deal with only the data from surveys and statistics, without directly encountering and interacting with the customers. This limited information about the customer base also means that they evaluate their performance merely on marketing share figures. The view therefore obstructs a marketer’s effort to become genuinely market-oriented to deal with typically uncontrollable factors and appreciate the desires of the customers (Gronroos, 1994). As marketing following this inflexible approach fails to fulfil the basic marketing concept to be innovative and adaptive to the interest of the customers, the usefulness of the approach is doubtful.

Changes in contemporary marketing environment

The marketing mix paradigm is put forward in the North America in1950s which reflects the marketing environment with certain infrastructure at that time (Gronroos, 1994). In particular, it involves a mass market with a great amount of consumer-packaged goods. In the current business world, individuals have become increasingly wealthy; the range of products in the market is also more diverse. There is a rise in globalization and market fragmentation. This implies that businesses stretch out beyond local areas to a worldwide level with greater interdependence among themselves. The market has become more complex and heterogeneous, with more vigorous competitions existing among the firms. Firms progressively focus on particular niche markets that serve their target customers with specific needs and requirements. As a result, mass marketing techniques as implied by the conventional marketing mix approach which lacks personalization appears to be gradually ineffective.

Transaction marketing vs. network and interaction approach

Transaction marketing based on the four Ps concerns merely about operationally optimizing the efficiency and volume of individual sales. While this model views marketing from an internal product-oriented angle which may result in short-term, passive and reactive customer relationships; there is a growing emphasis on the interaction with different actors within the market (Moller, 2006). Some theories emerge in response to the criticisms of the traditional approach to address the strategic role of marketing, services marketing, interaction and relationship with the customers. In the marketing mix approach, the exchange between marketers and customers depends on the on-way efforts of the former, who are often viewed as the central element. The passive involvement of the latter is only limited to his/her reactive response, influencing by individual preferences, organizational structure, etc. However, this seems not to be the case for marketing should be a ‘customer-focused management’ (Fakeideas, 2008). The approach also lacks the strategic components of marketing.

Industrial marketing, on the other hand, emphasizes a collaborative and personalized perspective. The network and interaction approach in industrial marketing proposes a reciprocal relationship between the marketers and customers through which exchanges take place (Johanson and Mattsson, 1988). The actions of every member and the way they interact have an effect on all the parties within the network. There is a much higher degree of interdependence between individual actors. It also considers the way in which individual relationship is connected to a wider network, taking into account both cooperation and competition. The very nature of network organization suggests that this concept may explain more sufficiently the continuous nature of relationships among different marketing actors. The development is also supported by evolving trends such as those seen in strategic partnerships, alliances and networks.

Relationship marketing and services marketing

A key emerging concept amongst recent marketing research and practice is the customer-centric revolution. Consistent with the interaction and network perspective, marketing is increasingly seen as an interactive process within a social context. It becomes more concerned with the building and management of relationships, customer retention and a long-term and mutually beneficial pact between marketers and customers that involves richer and more meaningful contacts to achieve a more satisfying exchange experience. The concept of value-savvy customers leads firms to change from employing “make, tell, sell” to “listen, serve, customize” strategies so as to maximize the perceived value to the customers (Macdonald and Uncles, 2005). Customers are seen to be more experienced in terms of their knowledge in marketing, better informed, more independent, critical and demanding, as well as seeking to take control of their personal information. Services marketing derived from this relational-oriented view are seen to be essential to be integrated into management on the whole (Vargo and Lusch, 2004). Service gains growing significance in terms of gaining competitive advantage and product differentiation (Constantinides, 2006). It comes forward as a sub-discipline in marketing. It is the unique aspects of services marketing that the marketing mix concept is claimed to have ignored, for example, relationship building (Fakeideas, 2008). As suggested by Gummesson (1995), customers do not buy goods or services, but fulfil their wants by the services which deliver values to them. This implies a shift in the focus from the product itself as implied by the four Ps, to customer satisfaction and creating the value in use. From these developments, it is clear that the experiences and interactions customers have with other individuals and other non-marketing functions contribute to a great amount of marketing success. The marketing mix thus serves simply to support these customer contacts which often involve activities that are actually beyond the mix itself.

Adaptation of marketing mix approach to the modern world

However, despite the criticisms, the marketing approach remains the most widely-accepted method employed by marketers and academics. In fact, there is evidence from research that the four Ps account can fit into the current marketing environment. At present, the rise of high-technology digital age is accompanied by an increasing usage of computers and internet. “Conservatives” like Bhatt and Emdad (2001) believe that the marketing mix can adapt to the environmental change by the internal transformation of each P element. For instance, they suggest that the addition of personalized information in product and price will improve the model’s flexibility; the interactive nature of internet has led to the concept of ‘virtual product’ that can be personalized and customized depending on individual preferences (Dominici, 2008). Internet also enables customers to obtain information about product prices that can be compared across. Besides, the notion of physical place is no longer appropriate. Internet provides a virtual forum that is capable of building a stronger tie with the customers. Digital Customer Relationship Management can be used to monitor the customers through the data of registration and purchase as well as obtaining their opinion on the level of satisfaction. This enables the firms to build up a large database that provides valuable information to management. Promotion, on the other hand, can be seen from a digital communication point of view. It involves flexible transmission of information from the advertising messages to the customers not only to sell the product, but also create a purchase relation and a perception of trust in the customer.

This demonstrates that the potential the four Ps have for modifications. It is not sensible to abandon the whole marketing approach framework. Alternatively, we can enhance it by integrating it with other approaches to truly take into account customers’ needs and in turn fulfil the marketing concept. An example of these may include the four Cs model containing the elements of customer, cost, convenience and communication (Moller, 2006). These are not mutually exclusive and bridge the gap between the internal focus on the product alone, and the external orientation to customers. These marketing communications can then be integrated into all aspects of the marketing strategy.

Conclusion

To sum up, in examining the easy-to-use marketing mix paradigm, this essay has first outlined the four Ps including product, price, place and promotion. Although it has long been dominant in marketing, the observations in the contemporary marketing environment, as well as its failure to capture customer behaviour, relationships, and interactions make obvious its limitation and insufficiency as an approach for marketing on its own. Marketing mix management is not likely to be a universal approach to marketing. Nevertheless, the marketing concept itself and the four Ps remain crucial to marketing success. There has also not been a new normative approach to replace the marketing mix. One should therefore not discard the whole framework completely. Instead, this framework can act as the starting point for research; and modifications with some adjustments and extensions may be beneficial.

As marketing is a multi-faceted social process, multiple perspectives from several paradigms such as one that focuses on network and customer relationship should be incorporated simultaneously in order to provide a fuller view of the whole picture. Further research will have to be carried out to examine the possible combinations of several approaches, their validation and refinement. Marketing in different domains, such as services and relationship marketing, in an online context should also be further investigated.

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