Wednesday, May 20, 2015
Marketing Mix (7Ps)
Marketing concept & Marketers Task
Marketers are tasked to create consumer awareness to the products or
services of their organizations through marketing techniques. Perhaps one of
the popular definitions given to marketing by the American Marketing
Association (My own learning, 2007) was in describing marketing as the tool
used by organizations to create new goods, ideas, and distribute it to generate
an exchange that satisfy consumers and organization.
Svenson (2001) mentioned that the 1940s era as a product-oriented phase;
the more efficiency in production the more success for the business. There was
no concern for consumer’s requirements.
Yet this mentality started to shift in the fifties towards the needs and
wants of the customers and was known as the marketing concept.
Svenson (2001, p.95) stated that marketing concept is “one of the most
important and famous concepts ever developed in marketing literature.”
Unlike the 18th or 19th century,
marketer’s nowadays face difficult tasks due to the ongoing changed is the
consumers behavior. This in turn is due to the turbulent environmental changes
that occurred.
“Marketers need to try to
understand the needs and wants of their customers” (My own learning, 2007:
section 1, p.1.6).
Actually if it is up to this paper, it would delete the word “try to”
from the quote because marketers should understand their customers clearly
before creating any new goods/services.
Understanding the consumer behavior and adopting the marketing concept
model is subjected to many elements in the environment i.e.: economical,
social, geographical, etc. Any poor decisions will have severe results
reflected on the organizations and its capital, such as an unsatisfied
stockholder.
The best way to acquire a customer’s needs and wants suggestions is
through extensive and studied marketing research system that reveals and
explores many hidden facts of great concern to shape the marketers decision. That
is why strategic decisions are built.
“If a company has information on market trends and customer Preferences,
then they are better equipped to meet the demands of that market.” (My own
learning, 2007: section 7, p.7.6).
Marketing Information System (MIS) is a very important element for
marketers to minimize the risk of a wrong decision through collecting and
analyzing data for decision makers.
Research can start through collecting internal data from the point of
sale i.e.: sales force, further surveys are a very crucial tool to obtain data
from the market.
Mail, telephone and personal interviews plus focus groups will surely
help marketers to obtain rich data to target their suitable segment(s).
However the extensive flood on a large-scale of information to marketers
will be counter-productive forcing them to mix between the relevant and the
irrelevant (My own learning, 2007). So it is very important to monitor this
process and filter unnecessary data to avoid misleading information that may
leads to wrong actions.
Based on the above mentioned, this paper believes that firms must place
the customer in the foreground for any invention of goods/services.
Kotler and Keller (2006) encourage organizations to follow the marketing
concept approach as the best way to achieve improved performance because it is
understanding and meeting customers’ needs.
The goal is to be aware of whom, how, when and why you will target those
segment(s). Marketers must use proper marketing tools to reach their target
markets. “These tools are referred to collectively as the marketing mix, and
comprise of the four Ps (or 4Ps)” (My own learning, 2007: section 1, p.1.9).
The
relation between marketing concept and marketing mix
Many practitioners, consultants and academics praise the marketing mix
models as a strategic tool for marketers, they wrote about it and taught it in
many textbooks and lectures.
“several studies confirm that 4Ps Mix is indeed the trusted conceptual
platform of practitioners dealing with tactical/operational marketing issues”
(Coviello et al., 2000 as quoted in
Constantinides, 2006, p.408).
Further, Kotler (1984, as quoted in Constantinides, 2006) has given the
marketing mix the same status as the marketing concept.
Actually Kotler’s opinion may have two perspectives, one this paper would
agree while the other does not agree, this paper will briefly demonstrate its
point of view.
What this paper would agree with Kotler is the importance of the
marketing mix and the marketing concept in strategic marketing planning, and
yes they are similar in priority and value.
The correlation between them is a must for the marketer in order to
create consumer’s awareness and satisfaction.
Consumer’s satisfaction is achieved when the firm adopts the marketing
concept perspective, which holds that “consumer needs and wants should be the
point of departure for any marketing process” (Svenson, 2001, p.95).
Whereas creating consumer’s awareness is through implementing the
marketing mix model.
Svenson (2001, p.96) stated “The underlying principle of the marketing
concept is the unifying feature in the different usages of the marketing mix
concept”
On the other hand, if his opinion reflects similarity in the mechanism,
this paper would not agree with his thoughts because marketing mix model is
controllable by the marketer (4/7Ps) while marketing concept is not.
Marketers could never predict what the consumer’s needs and wants
especially in a turbulent market environment and nor will they know what will
consequently reshape the consumer’s behavior.
Though marketing research can help to minor market environmental risks,
customers can shift their opinions to other products/services at any instance
they explore a low value of purchased products/services or bad welcoming, etc.
Regarding the above mentioned, we must ask critical questions about the
use of marketing mix (4Ps) in the 21st era. Can we still recognize
it as a strategic decision tool for marketers? Is it compatible for today’s
era? Should we terminate it and think in a new concept or can we update and
customize it to fit our turbulent environment?
Marketing
mix model in the 21 century
Marketing mix emerged in (1964) when Jerome McCarthy reduced Neil
Borden’s twelve controllable elements into four elements: Price, Product,
Promotion and Place (Constantinides, 2006), it is known then by the 4Ps.
“several studies confirm that 4Ps Mix is indeed the trusted conceptual
platform of practitioners dealing with tactical/operational marketing issues”
(Coviello et al., 2000, Romano and
Ratnatunga 1995 as quoted in Constantinides, 2006, p.408).
However, many other practitioners and academics criticize the 4Ps as an
old fashion mode that can not be implemented in our era. Today we are in the 21st
century, four decades later from the McCarthy’s era.
A critical question must be asked: does the marketing mix model still
applicable for modern marketers?
There are great differences in today’s era when comparing to fifty years
ago. Big differences in environmental conditions, mentality and most important
technological differences that is leading to diversity in marketplace and
consequently differences in consumer’s behaviour.
Schultz (2001, p.7) stated, “Fifty years ago, the so-called marketing mix
made sense”.
Further he claimed that the transition technology has given the consumer
the advantage to search for best prices, available products and their
locations, “and all the other things the marketer controlled in the days of
Jerry McCarthy’s 4Ps concept.” (Schultz, 2001, p.7).
Today’s era focuses on the importance of human aspect as a critical
factor to the success of any business or firm. One of the main criticisms to
the marketing mix is the ignorance of human aspect.
“Unfortunately, employees have seldom been considered part of any
marketing mix.” (Schultz, 2001, p.7)
Besides, constantinides (2006) survey on many writers and researchers
related to marketing domain reveal that the majority of them “express serious
doubts as to the role of the Mix as marketing management tool in its original
form, proposing alternative approaches: adding new parameters to the original
Mix or replacing it with alternative frameworks altogether.” (p.430)
Many authors, professionals and academics argue the implementation of the
Marketing mix on today’s era. Some requests for updating the 4Ps, others
request the termination of this model.
This paper stands between these debates; we can never terminate a theory
(4Ps) that was of a great value for marketers in its time. However, we can not
keep implementing the same theory in our 21st century for the vast
differences in marketplace conditions.
Actually we could not blame the Marketing mix (4Ps) to be old fashioned
and it is useless for our era, we must empower the mix to cope with the fast
and tough changes happening in our environment.
As a result, this paper considers the relevance of the
Marketing mix model as a critical tool for modern marketer if it is added with
three more important Ps (participants, physical evidence, the process) to have
what so-called the 7Ps.
Choosing
the 7Ps as a modern marketing tool
This paragraph will highlight on the unending debate between
Practitioners, academics and editors about the differences between the consumer
marketing and the industrial marketing and what is the best marketing mix to
use in each case (7 or 4 Ps).
However, it is not our objective to enter into this debate; still it is
an important issue to draw attention to and give our view on.
Industrial marketing is known as business to business (B2B) marketing,
while consumer marketing is known as business to consumer (B2C).
“Industrial marketers have long claimed that industrial marketing has
features that make it unique and different to consumer marketing” (Ahmed and
Rafiq, 1995, p.5).
Further Booms and Bitner claimed in their original article that the 7ps
marketing mix is limited to service marketing. (Rafiq and Ahmed, 1995, p.5).
Actually this paper has a different view from the above mentioned
opinions.
Marketers must believe in the new system that is dominated by consumer’s
needs and wants if they wish to succeed.
“Today, there’s little question that ours has became a customer-dominated
marketplace, and marketers are scrambling to adjust, adapt and respond”
(Schultz, 2001, p.7).
In light of this, marketers of both types must realize that customer’s
satisfaction is an important issue to achieve success, further they must build
a long relationship to have a profitable long lasting business.
Goldsmith (1999, p.179) stated:
“The services marketing emphasizes on customer satisfaction and long-term
relationships with customers have influenced goods marketers to think
differently about their businesses and their customers”
Further, Cowell (1984 as quoted in Ahmed and Rafiq, 1995) goes deeper
arguing that there are no fundamental differences between both, marketing of
goods and services.
An important survey made by Ahmed and Mohammed (1995) to test the
satisfaction of academics regarding the 4Ps and 7Ps. The study targeted two
important groups, UK’s Marketing Education Group (MEG) and the European
Marketing Academy (EMAC).
The majority of the respondent result (professors, associate professors)
regards the 7Ps having a broader perspective and was more refined than the
4Ps.
“The results suggest that the 7Ps framework has already achieved a high
degree of acceptance as a generic marketing mix among our sample of
respondents” (Ahmed and Rafiq, 1995, p.13).
As a result, this paper believes in the power of the 7Ps marketing mix to
achieve a broader perspective than the 4Ps. The most important specification of
the 7Ps is the personal factor that regulates the relationship between the
consumer and the organisation.
In-addition it will critically clarify the cause of being supportive to
the 7Ps method. This analysis will incorporate a brief illustration about the
execution of 7Ps marketing mix by the marketing department at X International.
Exploring X
International case
A brief explanation about X International is a must before starting the
debate because this company experienced the success and the bitter taste of
failure since it could not maintain its success.
X International is one of the biggest retail companies in Kuwait. It
holds more than 14 international brands (medium – high) of different product
mix including fashion, café, jewellery and accessories stores.
The company was established in 1993, it was the first to open X BRNAD in
the middle east and among the very few who started the retail business in
Kuwait. It started as a family business, grow rapidly in the first eight years
exceeding 450 employees and more than 50 stores all around Kuwait.
Nevertheless the company has experienced a decrease in revenues, which
started in 2002 and increased in the following two years due to the absence of
a long-term strategic marketing planning.
The rise of many strong
capitalized companies, which imported many franchise goods/services, started to
compete and steal a big market share from our company.
These deteriorating crises forced the top management to build a
professional marketing department to reshape a strategic marketing plan and
save the company from drowning. I was one of these new employees hired year
2004 and still present.
We made a SWOT analysis to have a clear view about the company’s
situation and the results were astonishing.
Wrong pricing decisions, bad merchandising, and unprofessional
salesperson, these factors affects the company on the long term and lead to a
drop in market share, thus profitability.
The marketing department decided that the only solution to save this
company is through implementing the 7Ps marketing mix theory and target each
segment with a suitable marketing plan.
Implementing
the 7Ps theory in the real world
I choose my company as an example because I experienced the relevance of
the Marketing mix theory to the modern marketer on the real world especially if
accompanied with a marketing information service (MIS).
This service will empower the mix
due to the fresh data acquired from the environment (customer tastes,
competitor, Etc.) to monitor, analyze and take action.
The 7Ps is a united model where each ingredient will affect the other
one. “Decisions cannot be made on one element of the marketing mix without
considering its impact on other elements” (Pheng and Ming, 1997, p. 278).
Nevertheless, Marketers should take into consideration that consumers are
heterogeneous in the marketplace and implementing the marketing mix will vary
from one target market to another. For example some segments may need more
highlighting (Ps) than others. i.e.: different price or promotion strategies.
This paper will give a brief explanation about each ingredient or two
related ingredients together to demonstrate for the reader how and why the
marketing department implemented this theory.
Person & Process:
Person and process are very
vital ingredients of the 7ps mix that a modern marketer must adopt especially
if the organization is service oriented.
X International is a retail
company, hence mixing between service and relationship marketing is crucial to
deliver customer’s satisfaction.
The connection between these
ingredients is a must to assure premium service that leads to consumer’s
satisfaction, therefore more success and profitability to the organisation.
Consumers are not solely
interested in the end results; they are also interested in the process of how
this service is delivered.
We realized that X
International mistake was in hiring unqualified and unprofessional salesperson
with low salaries to cut costs and decrease overheads in-order to compete with
the tough competition it was facing.
The point of sales was
suffering from untrained employees without any clear policies i.e.: how to
react, treats and serve consumers.
The results were
devastating; loss of many consumers since they found in other competitor a
similar product with a better service and became loyal to it.
The cure was in hiring
professional staff by the Human resource management, develops them by ongoing
training to deliver optimal consumer’s satisfaction.
Salespersons are the image
of the company; they are in direct contact with the consumer therefore they
have enormous impact on the daily sales.
Product:
Products are the backbone of
an organization, if the marketer understands and know the specification of his
product and what value it could deliver to the consumer he will succeed in
promoting it.
“we should note that it is the consumers’ perceptions of the product
which should be the cornerstone of all product policy.” (My own learning, 2007:
section 8, p.8.3).
X International prime mistake was choosing some fashion collection which
does not suit the social culture of the Kuwaiti market, thus less revenues and
big amount of stock.
As a result the new marketing department starts pressing on the
franchisers to customize some product lines for the Middle East market in order
to achieve better results.
Furthermore, brand managers and purchase managers were urged to choose
better collections that match consumer’s tastes.
Actually this step was a win-win situation for the franchisers and
retailers because they create brand equity for the consumers. I.e.:(Mango
Zuhair Murad edition)
Pricing:
Pricing is related to the product’s image and its amount of
differentiation in the market, what is the perceived value the consumer will
gain when purchasing it.
What about X International pricing strategy? What is the demand on its
products in the market?
Starting from this question we concluded after researches and
investigation that there is unprofessional mark-up pricing, consequently
leading to pricing above and below the market, thus loosing consumers and
profit at the same time.
Brands like Mango & Stradivarius for example have strong brand equity
but at the same time facing strong competition from other similar brands, so a
new pricing strategy was made (pricing at the market) in order to compete and
maintain our market share.
Place & Physical evidence:
This paper believes that place and physical evidence are relatively
related to each other. Whatever the segments (high or low) you are serving in
the point of sale, you must have suitable physical evidence that will help to
create the right environment to the consumer.
Nice ambiance, clean shop, good music will affect positively in consumers
and will reflect the image of the brand.
However, the main problem of X International was in the difficulties to
serve its segments especially the one who are living away from the shop
location (bad channel), in other word no strategic geographical coverage.
The solution was in investing into new shops to serve these geographical
areas especially those would provide good revenues. As a result the company
invested in more than 12 accessible shops for three different brands in year
2005 and still investing whenever it finds a prime location that will acquire
new segments in new geographical areas.
Promotion:
This paper believes in the power of this ingredient to create awareness
and easily promote the goods to the consumer. It depends on the budget to be
spent and what kind of media to use to target the segment(s) that seems to be
profitable.
The problem facing X International was the low budget allocated for
promotion. The owner’s incorrect mentality of this approach was “strong brands
does not need too much promotions”.
This mentality was slightly correct when they were a monopoly player in
the past, now the market is full of strong brands that are competing
aggressively so it is impossible to stay in the dark.
Accordingly we allocate budgets for each brand (2-3 percent of its
revenues) and adopt the AIDA model to direct our promotional efforts.
Conclusion
Based on what was
discussed, this paper stands firm with the marketing mix model as a modern
tool for marketers nowadays. X International is an example from the real world
where this theory was implemented on different product mix and proved its
success.
However, we must focus on a wider context; it is not a
matter of how many (Ps) the marketer must apply to achieve the firm’s strategic
goals.
Some marketers use the 4Cs others uses the Consumer
Relationship Management (CRM) and some may mix between them.
These theories are being implemented in the real world
by practitioners but some succeed more than others and achieve better results.
The main standard for any organisation to succeed in
today’s turbulent environment is to place the consumer’s perspective in the
foreground.
Svenson (2001, p.99) stated:
“The point of departure for any theory building,
modeling, or development of conceptual frameworks must emphasize the customer’s
perspective and eventually the ultimate consumer’s perspective”.
This paper stands firm with Svenson’s quote because
consumer’s tastes and views are the main cause to create new theories and
concepts as well as new goods/services.
Finally, as long as there are new generations of
mankind there will be new generations of theories and concepts to fit their
different tastes and demands, thus their behavior.
Many concepts and models were very successful in the 20th
century but they were vanished in our era due to many environmental changes.
Reference:
Anon, 2007. Strategic Marketing. Edition
10, University Of Leicester, Cheltenham
Constantinides, E. 2006. The Marketing
Mix Revistied: Towards the 21st Century Marketing. Marketing Management. 22, pp.407-438
Goldsmith, R.E. 1999. The personalised
marketplace: beyond the 4Ps. Marketing
Intelligence & Planning [online], 17(4), Available from:
http://www.emeraldinsight.com/10.1108/02634509910275917
[Accessed 25 March 2008].
Kotler, P. and Keller, K.L. (ed). 2006. Marketing Management. New Jersey: Pearson Prentice Hall
Pheng, L.S. and Ming, K.H. 1997.
Formulating a strategic marketing mix for quantity surveyors. Marketing Intelligence & Planning
[online], 15(6), Available from: www.emeraldinsight.com/10.1108/02634509710184857
[Accessed 15 March 2008].
Rafiq, M. and Ahmed, P.K. 1995. Using
the 7Ps as a generic marketing mix: an exploratory survey of UK and European
marketing academics. Marketing
Intelligence & Planning [online], 13(9), Available from:
http://www.emeraldinsight.com/10.1108/02634509510097793
[Accessed 25 March 2008].
Shultz, D.N. 2001. “Marketers: Bid farewell to strategy based on
old 4Ps”, Marketing News, 12
February, P.7.
Svenson, G. 2007. Strategic options and firm value. European Business Review [online],
13(2), Available from: www.emeraldinsight.com/10.1108/09555340110385263
[Accessed 3 April 2008].
Related articles
Subscribe to:
Posts (Atom)