Marketing Mix: Introduction
Marketing mix is one of the most popular theoretical frameworks in marketing that has been used by companies in order to make marketing and other decisions in a more efficient manner. Companies have concentrated on various elements of marketing mix as a source of competitive edge according to the strategy adopted by senior level management in order to achieve long-term aims and objectives.
The potential contribution of marketing in terms of obtaining competitive edge has been realised by management of many successful businesses therefore, the attention to this specific area of business practice has become greater than ever before (Egan, 2007). Accordingly, today most of the concepts associated with marketing such as marketing mix, product life-cycle, PEST and SWOT analysis, Porter’s Five forces, Value-Chain analysis and others attract more interest than ever before and these marketing concepts are finding their practical applications among increasing number of businesses.
Marketing mix, otherwise known as 4Ps can be highlighted as one of the fundamental concepts in marketing and focuses on four aspects of the business practice: product, price, promotion and place (Klein, 2007). The practical application of marketing mix by companies varies according to their size, chosen business strategies, geographical location, competitive edge and a range of other factors.
According to Kumar (2010), marketing mix is the terms used to describe the combination of methods employed by a business in order o achieve its objectives by marketing its products and services effectively to a specific target group.
Bootwala et al (2009) mention the definition of marketing mix as offered by Philip Kotler according to which “marketing mix is a set of controllable variables and their levels that the firm uses to influence the target market” (Bootwala et al, 2009, p.3.1).
Evolution of Marketing Mix
Kitchen (2010) informs that the theory of marketing mix has evolved from a notion of ‘mixer of ingredients’ a term introduced by James Culliton (1948) during the study of marketing costs conducted in 1947 and 1948. The principle of ‘mixer of ingredients’ consisted of analysing various business processes and marketing efforts looked at as ‘ingredients’ individually in order to find the best combination for the improvement of the business. The concept of ‘marketing mix’ itself was introduced by Neil Borden during 1950s an initially implied different means of cooperation (Borden, 1964).
Initially there were 12 elements within the marketing mix concept introduced by Borden: product planning; pricing; branding; channels of distribution; personal selling; advertising; promotions; packaging; display; servicing; physical handling; and fact finding and analysis (Goi, 2009).
Suggestion was made by Frey (1961) to divide these elements into two groups: offering and methods and tools. Accordingly, offering group contained product, packaging, brand, price and service, whereas the elements of methods and tools group were distribution channels, personal selling, advertising, sales promotion and publicity.
Around this time new theories of such a nature started to be introduced by other researchers as well with Lazer and Kelly (1962) introducing three components of marketing mix, namely the goods and services mix, the distribution mix and the communication mix.
However, the most popular form of marketing mix belongs to McCarthy (1964) which is a re-groped version of Borden’s marketing mix and consists of four elements: product, price, promotion, and place. Most of the theoretical and practical researches that have focused on various aspects of marketing mix have been based on this specific classification of marketing mix.
From then on the number of ‘P’s have been increasing with Judd (1987) introducing fifth ‘P’ (people), and three more ‘P’s (participants, physical evidence and process) being introduced by Booms and Bitner (1980).
Moreover, one of the most respected marketing theorists Kotler (1986) introduced two more ‘P’s that are political power and public opinion. Another substantial contribution to the theory was initiated by Goldsmith (1999), who added the element of personalisation.
However, it worth to be noted that no ‘P’ adding has been observed by any respected scholar in the last several years possibly due to the fact that the concept of marketing mix has faced a wide range of criticism recently due to its inability to establish customer relationships, and assuming the customers to be passive, as well as ignoring increasing customer expectations.
Explanation of Marketing Mix
“Marketing mix is not a scientific theory, but merely a conceptual framework that identifies the principal decision making managers make in configuring their offerings to suit consumers’ needs” (Goi, 2009, p.2)
In order to explain the level of implementation of marketing mix strategy by M&S in a more effective way it is a good idea to provide the explanation of the concept as suggested by some respected scholars in the field of marketing, and also provide critical analysis of some of their contributions.
Kumar (2010) maintains that following marketing variables should be defined and analysed in order to undertake the marketing mix strategies in the most efficient manner:
Firstly, the ways design and packaging are going to add value to the products. This should be done taking into account the nature of the product and the expectations of a target market, the product is aimed at. This specific point directly relates to the research in a way that the impact of design and packaging in retail industry M&S operates in is more significant compared to many other industries.
Secondly, finding the most appropriate pricing strategy. Specifically, selection should be made by the company from the available pricing strategies of market-led pricing, skimming, destruction, price wars, penetration, and cost-based pricing. This advise suggested by Kumar (2010) has already been adopted by M&S as well as most of its major competitors such as Waitrose, Tesco, Sainsbury’s and others, and each of these retail companies have formulated their position in the market mainly according to their pricing strategy.
Thirdly, decisions related to the location of the company and its various business processes. Pride and Ferrell (2008) emphasize the importance of location in retail industry, and inform about bitter ‘war’ between major retailers in terms of opening stores in most populous locations and city centres. From this perspective it can be stated that the importance of location in terms of profit maximisation is fully recognised by M&S as well as by most of its competitors.
Fourthly, ways in which the company is going to promote its products. According to Belch and Belch (2003) the role of promotion has increased significantly because of increasing level of competition, and thus M&S, along with its major competitors invest considerable amount of financial resources for promotional purposes.
The above discussions prove the point that Kumar’s (2010) contribution to the subject of marketing mix as well as the contribution of many other contemporary marketing writers (Goi, 2009, Bootwala et al, 2009, Kitchen, 2010) only discuss the aspects of marketing mix that already have been acknowledged by businesses and widely used in order to get competitive edge in the marketplace. Moreover, they mainly focus on four traditional components of marketing mix (product, price, promotion and place) not giving due importance to the other Ps such as people, process and physical evidence.
The practical application of marketing mix concept can be explained in a way that “a firm can vary its marketing mix by changing any one or more of these ingredients. Thus, a firm may use one marketing mix to reach to one target market and a second, somehow different marketing mix to reach to another target market” (Pride et al, 2009, p.348). This statement reveals the flexibility of marketing mix components in a way that marketing mix strategy adopted by companies such as M&S do not have to be universal and rigid, and they have to be adapted to different markets, taking into account the characteristics of each individual market.
According to Goi (2009) marketing mix became a powerful and popular concept due to the following three reasons:
Firstly, marketing mix makes marketing easy in theoretical and practical levels. Generally, the concept of marketing might seem to be vague and complicated to the general audience. However, the explanation of marketing through the concept of marketing mix makes the whole concept of marketing easy to understand also assists in practical application of marketing concepts by various parties in order to obtain competitive edge.
Secondly, marketing mix provides a framework in order to separate marketing activities of a business from various other business activities. In today’s complicated business environment new business concepts and theories are evolving that are aimed at helping companies to get effectiveness at various levels. However, it is not always clear which category of business activities a new concept relates to. Marketing mix can be used in such occasions as a tool that enables to distinguish marketing aspect of the business from other business practices.
Thirdly, marketing mix allows the delegation of marketing tasks to various specialists. Marketing is a broad concept and involves the cooperation of a wide range of specialists in order to be successful. The application of marketing mix concept into practice allows the opportunity for delegating tasks in an efficient manner through assigning activities associated with product, place, price and promotion aspects of the business to professionals with relevant skills and qualifications.
Benefits of Marketing Mix
Low and Tan (2005) point to two following benefits of marketing mix:
Firstly, marketing mix reveals the fact that competitive edge in the marketplace is achieved through focusing in one source of competitive edge at the expense of the other. For instance, if M&S decides to have the quality of products as a competitive edge for the company, the company would have to compromise its competitive edge for the price. Likewise, if M&S decides to compete on prices then the company would not be able to achieve competitive edge on high quality of products.
Secondly, marketing mix assists in resource allocation. Specifically, by dividing the sources of competitive edge in various components marketing mix allows marketing managers and strategic level management of the company to make decisions related to resource allocation in a more efficient manner.
Factors Affecting Marketing Mix
Literature review indicates that the effectiveness of marketing strategies initiated by M&S along with other supermarkets and businesses are subject to the external environment. Pride et al (2009) specify the forces of external environment to be the following:
a) Economic forces. The impact of economic conditions to the ability and willingness of customers to buy. The impact of economic forces to M&S and other supermarkets is huge due to the fact that in times of economic hardships retail industry is among the first to experience the negative consequences (Ball and Ball, 2005).
b) Sociocultural forces. These forces to effect society and culture in a way that attitudes, beliefs, norms, customs, and lifestyles of people are going to change. The importance of sociocultural forces to M&S is great because studying these forces allows M&S to be proactive in terms of meeting changing customer expectations.
c) Political forces. A type of influence that is generated through the actions of elected and appointed officials. M&S and all of its marketing efforts are also subject to the political forces within the UK as well as the political forces of any other counties the company operates in.
d) Competitive forces. The activities of competitors who are formulating and undertaking their own marketing plans. This includes the activities of M&S major competitors such as Waitrose, TESCO, Sainsbury’s etc. their manipulation with product, place, promotion and price and how this is going to affect M&S performance.
e) Legal and regulatory forces. Laws and regulations introduced in order to protect consumers and competition, as well as government regulations affecting marketing. For instance, government regulations such as prohibition on the sale of alcoholic beverages after eleven hours of the evening is going to affect M&S marketing mix strategies.
f) Technological forces. Technological changes affecting many aspects of business. Business processes involved in M&S marketing mix components might be improved through the application of the latest technological achievement.
The Role of Marketing Mix in Customer Attraction and Retention
A range of researchers have explored the role of marketing mix in attracting new customers and increasing the level of loyalty of existing customers i.e. customer retaining. The studies of such a nature can be divided into two groups.
The first group of researchers like Pickton and Broderick (2005), Lamb et al (2008), Kumar (2001) and others have researched these issues directly, trying to establish the connection between the implementation of marketing mix strategy by a company and the impact of the strategy in terms of customer attraction and retention.
Generally, there are no vast differences in the conclusions of works in this direction and they indicate that the successful implementation of marketing mix strategy in terms of customer attraction and retention does not depend on which element(s) of marketing mix the company concentrates on as a source of competitive edge, but it greatly depends on the level of effectiveness and efficiency by which the company is pursuing its chosen strategy.
In other words, according to authors from this group the viewpoint which states that concentrating on promotion element of marketing mix for customer attraction and retention is more effective than concentrating on place element for instance, is invalid. And regardless of the choice of marketing mix elements as a source of competitive edge, companies should adopt effective measures and efficiently implement them if they aim to improve the level of customer attraction and retention.
The second group of researchers that include Moller (2006), Kurtz et al (2009), Fill (2006), Egan (2007) and others, on the other hand, do not explore the impact of marketing mix in customer attraction and retention directly. Instead, these researchers focus on overall effectiveness of the concept, critically analysing its validity in the current market environment.
Authors ( Moller (2006), Kurtz et al (2009), Fill (2006), Egan (2007) etc.) agree that although marketing mix concept has been a leading marketing framework for several decades the level of its effectiveness has been compromised in the current market environment taking into account such factors as increasing level of importance of online marketplace, technological advancement, increasing forces of globalisation etc.
However, at the same time, the above mentioned authors from the second group do not offer to dismiss marketing mix concept as invalid altogether. Instead, the authors maintain taking into account additional factors internal and external factors as well when making decision related to the elements of marketing mix.
Criticism of Marketing Mix
The concept of marketing mix has attracted a range of criticisms as well. For instance, shortcomings of marketing mix have been summarised by Moller (2006) into following points:
Firstly, the role and effects of consumer behaviour are neglected in marketing mix concepts. Nowadays consumer behaviours have very dynamic character in a way that consumer expectations are ever increasing. There is a consensus among marketing industry researchers and practitioners (Koekemer and Bird, 2004, Kurtz et al, 2009) that increasing consumer expectations are closely linked to the intensifying level of competition, and cannot be ignored. Nevertheless, this important issue being ignored by marketing mix framework can be considered as one of its main flaws.
Secondly, customers are perceived as being passive within marketing mix framework, and no provision is given with interactions and relationships with customers. Consumer relationship management has evolved as a separate aspect of business due to its significant importance. Companies such as M&S cannot afford to ignore this important aspect of business, and this fact effects the implementation of marketing mix strategies by the company in various levels.
Thirdly, there is a lack of theoretical back-up for the marketing mix framework, and the whole concept is approached very simplistic. In other words, although marketing mix has been accepted as an individual concept, the theories associated with the concept are very general, and there are no detailed theoretical frameworks available regarding its practical application by business entities (Moller, 2006).
Fourthly, marketing activities are not personalised according to marketing mix concept. This specific shortcoming associated with the concept of marketing mix has been partially discussed above in a way that they are considered to be rigid and lack flexibility taking into account individual differences among the markets in various levels.
Another critic of marketing mix concept Fakeideas (2008) offers following reasoning justifying his opposition to the concept:
Firstly, unique elements of service marketing are not taken into account within marketing mix theoretical framework.
Secondly, marketing mix looks at products to be single items, not giving considerations to ranges, brands or image of the company.
Thirdly, the relationship building aspect of marketing, as well as experiences involved are not taken into account within the framework of marketing mix.
Fourthly, marketing mix puts marketers at the centre of marketing activities, rather than customers which opposes a popular approach of ‘customer-focused management’.
Baker and Hart (2007) warn about a range of failings associated with the concept of marketing mix which can be formulated in following points:
Firstly, assuming that the company is independent of its environment. In today’s globalised marketplace the performance of companies are subject to various external factors. But, there are no provisions provided to external factors within the framework of marketing mix concept.
Secondly, considering the seller to be active, and the buyer to be passive. Increased level of competition in most of the industries has triggered buyers to be more active in terms of forming their expectations, and thus dictating terms of the market. However, this important fact is ignored within marketing mix theoretical framework.
Thirdly, thinking that all markets are standard and homogeneous and standard version of marketing mix can be applied in all markets. Despite the increasing forces of globalisation, each of the marketplace has its own characteristics caused by various factors. The theory of marketing mix concept ignores this fact and therefore its validity as one of the main marketing concepts businesses should be guided by is highly compromised.
Fourthly, a viewpoint, according to which buyers and sellers are separate entities. The current business environment has revealed that fact that buyers and sellers are integrated in many levels, but no provision is given to this fact in marketing mix theoretical framework.
All above shortcomings of marketing mix have been discovered relatively recently, with businesses adopting more personalised approach to customers in order to improve their level of customer attraction and retention.
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