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The marketing mix has been extremely significant in communicating the development and the execution of marketing theory. The concept was introduced by Neil Borden in the 1950s and further labelled as the Four P's- product, price, place, and promotion (Borden, 1964). According to Kottler (1991), 4P’s are “Set of tools that the firm uses to achieve its objectives in the target market”. Product refers to the physical item that is sold and adds value to the consumer. Price is the amount the customers give to receive an item E.g. credits and discounts. Place refers to how goods and services are moved to the customers. This includes distribution channels, transportation, and warehouse facilities. Promotion is how the seller tries to sell their product to their consumers with the help of advertisements, personal selling or public relations (Perreault et al., 2002).
Fig 1: Key marketing mix elements – the 4P’s ( source : Gronholm, 2012).
The question that rings in everyone’s mind is - why has the marketing mix become such a waterway coat for marketers? The principle purpose behind this is most likely the didactic virtues of the Four Ps that makes teaching marketing so natural and clear. The effortlessness of the model lures educators to tool kit thinking instead of reminding them that marketing is a social procedure with undeniably a greater number of facets than that. As an outcome of this, specialists and marketing professionals are likewise compelled by the oversimplified idea of the Four Ps. The unfortunate casualties are marketing theory and consumers. Then again, marketing is developing towards a path where the tool kit thinking about the marketing mix fits less well. “In industrial marketing, services marketing, managing distribution channels and even consumer packaged goods marketing itself” (Grönroos, C.,1997, Pg. 333), a shift is occurring from marketing to anonymous masses of consumers to overseeing relationships with recognized consumers.
Globalization has opened doors for new market openings, and also led to more up to date difficulties and complexities for marketers in this globally competitive environment. Now there is more need for global organizations to investigate the contemporary threats and opportunities in markets and technology and how they influence entry and expansion systems through a cautious recalibration of the marketing mix. This results in applying approaches that are different from what was applied before, mirroring a paradigm shift in global marketing(Agarwal and Terry.,2018). This paper aims to depict the irrelevance of 4P’s to firms adopting a contemporary approach towards marketing and to lay out other alternative approaches towards marketing that are relevant in the contemporary market.
CRITICISM OF THE TRADITIONAL MARKETING MIX
Gronroos(1989) proposes that the marketing mix is product-oriented, in the light of the fact that their starting point is the firm and not the market. A marketing mix is a universal approach followed by marketers around the globe. Gronroos (1989) argues that the marketing mix has been developed in North America, where there are well-created infrastructure and a huge consumer market, and the validity of this mix has not been tested at a general platform or internationally. This traditional marketing mix has been applied in Europe and also other parts of the world without even considering the need to modify it, which questions its validity outside of North America. Just because something is successful in one country doesn’t mean it is going to be successful in another country. For example, if a new software company is introduced in a country where the users aren't familiar with certain advanced features, then this company is not going to be successful in this country. Instead, they should introduce a more simple version of the product so that people get familiar with it. Similarly, an advanced market might require more features than the current one.
When marketing channels and consumer behaviour are changing at a rapid speed, should companies keep on paying attention to these conventional ideas, or rather rework the principles of marketing for themselves? Each business is unique thus systems ought to be lined up with business objectives, as opposed to a universal approach. As the consumers and the market is dynamic, this has resulted in pressure on marketers to identify and fulfil the constantly changing consumer behaviour, the increasing significance of services and the need to have to build a good relationship with the client. Over here, the usage of the 4P framework comes with several limitations. The factor underlying the dynamic market is the growing consumer power and easy availability of computing power that allows easy access to online companies and databases(Constantinides, E.,2006).
Envision yourself as a consumer in the year 2004. You just entered a supermarket to purchase a face wash. You see more than 10 facewash of different brands and types, and you have to settle on a choice on which one to buy. You may think about a few components when settling on this choice — how it looks, what is the fragrance, how it is positioned etc.
Now let us envision the same situation but in 2012. Presently, as a consumer, you have adequate access to cell phones and the web and would prefer to use that instead of going to the rack and assessing the product.. Truth be told, you probably won't be at the physical store at all since sites like Amazon and Boots have become popular, filling in as a suitable option in contrast to the physical retail location. In this way, when you need something like a face wash, you are probably not going to go to the store to buy, but instead, go online and google something like "the best face wash for acne-prone skin". This example shows the dynamic nature of the consumer behaviour.
The impact of this new setting is the focal point of marketers, which has moved towards satisfying customers and customized as opposed to aggregate needs while putting more emphasis on customer service and relationship promoting. Such changes pursue closely to the shifting patterns that consist of wealthier and educated consumers. These consumers are dominating the market by having more control over the marketing process(Hofman, Novak, Schlosser, 2000), valuing the customization approach and inclining towards services that can be expeditiously adjusted to their changing needs.
Contemporary market has developed with the approach of more prominent customer-centric marketing conditions. Companies' main focus is to work with consumers, identify their needs and design products according to their needs. We can see a shift towards personalization, interactivity and genuine, direct discourse with the client. These changes have made way for innovation, customization, and networking (Jackson, G. and Ahuja, V., 2016). These new methodologies permit marketers not only build a relationship with the target group but also to recognize the constantly changing consumer behaviour. Moreover, it has also enabled the markets to react quickly to their competitors and anticipate future market trends. Hence, all these developments have provoked the advancements of new theoretical approaches that deal with specific rather than general marketing issues and situations (Constantinides, E.,2006). It's further feasible for companies to interact with and administer the consumer better with the help of digital platforms. The contemporary market incorporates the following marketing mix in the current-day marketing environment: digital marketing, four C’s, relationship marketing, sustainability mix and COM model. These models fit the contemporary market trends as they are more customer-centric.
DIGITAL MARKETING VERSUS TRADITIONAL MARKETING
Digital marketing has made way for sales opportunities worldwide, giving organizations more places to sell their items. This modern digital marketplace encapsulates the development process from the mass markets of the 60’s to “ an increasingly segmented, niche-dominated or even mass-customized, highly interactive and global markets of today” (Constantinides, E.,2002, pg. 03).
It could be suggested that the marketing mix paradigm could be applied to the digital platform. One clear shortcoming of that the 4P's does not explicitly incorporate any interactive components (Grönroos, 1997), while interactivity is the premise of digital marketing. The marketing mix has been created as an operational as opposed to a strategic tool and conventional marketers have constantly regarded it as such. “In the physical world, the strategic management aspects are in effect separated from the commercial operations due to the very nature of the strategic management itself." The corporate strategy is regarded as an "external variable over-imposed to their marketing mix"( Constantinides, E., 2002). Applying the marketing mix as the planning platform for digital operations could imply that the strategic aspects would be disregarded altogether. British Airways learned that competing online using the existing strategic model with EasyJet.com and other airlines were impossible. After the poor results of the new British Airways website as a ticket counter, British Airways came up with a new strategic approach, low-cost offshoot airline.
Raluca Dania Todor (2016) points out some reasons why digital marketing is well suited for the contemporary world than traditional marketing ( referred to as the 4P’s). Customization: When it comes to digital marketing, it’s possible to create offers and projects that can be edited or modified based on the preferences of the consumer while in traditional marketing it’s hard to target a specific person. For example, an ad targets old ladies – In comparison, digital marketing will be able to track the viewers and suggest similar products. When it comes to cost efficiency, digital marketing has lower-cost while traditional marketing is much more expensive and time-consuming. Interactivity: When using the web, consumers can pick when to start contact and for how long. There is a huge audience and so the web can reach to consumers worldwide. Moreover, it is also possible to tailor a digital campaign to a local net. Traditional marketing is not applicable if there is much interaction with the audience involved. It is more about tossing data before individuals and trusting that they choose to make a move. Measurable: In digital technologies, it is easy to measure the impact than traditional marketing where such results cannot be measured (Todor, R.D., 2016).
Presently, technology promotes more individualized marketing. I can't go a week without using Netflix or Spotify recommendations to enable me to pick what I should watch or tune in to. I couldn't explore most web-based business destinations successfully without tapping on the items they suggest for me. These are instances of organizations finding out about me and conveying encounters that are important to me. However, those are only the most perceptible occurrences of personalization. There are numerous inconspicuous ways that marketers are utilizing technology to convey more relevant instances today across websites, phone apps, email marketing, and in-person channels like stores or branch areas, or webchat. As suggested by Hoffman and Novak (1997), marketers should concentrate on playing an active role in the development of these new paradigms for encouraging commerce in the emerging digital society underlying the Web, rather than penetrating the existing crude mechanical structures (4P’s) (Constantinides, E.,2002). This difference between virtual and physical commerce has prompted us to re-assess the existing marketing principles when working with E-commerce.
THE FOUR C’S
As we are trying to focus on the contemporary market, it would only make sense to include a mix that is more customer-oriented. Smith (2003) suggested a new mix, the four C’s, that focus on building long-lasting relationships with the consumer. This mix includes:
Customer- This focuses on customers’ needs rather than just products. This helps in relationship-based communication. For example, a watch company has introduced a watch that will play a happy birthday song on a particular date or time. If the customer isn’t intrigued by this exceptional feature the product is worthless, regardless of whether the company can offer it at a lower cost.
Cost- This focuses on what it costs a consumer to possess a product rather than evaluating the product to make a profit. This idea makes companies think about how much a product will cost over the long haul, including factors such as maintenance costs. For example, if there are 2 similar pizza joints, and one is 2 miles away from the other one then marketers need to consider the expense of driving when promoting their company.
Convenience- This focuses on how simple it is for customers to acquire/purchase the product rather than how simple it is for organizations to distribute the product. With the help of technology, consumers do not need to go out and buy the product. For example, Coca-Cola has been successful by using this concept. They have tried to make their products more accessible than their rival, Pepsi.
Communication- This focuses on two-way communication with customers (listening and learning) rather than one-way communication ( telling and selling). This is the last and the most significant shift for marketers. The promotion segment of 4P’s focused more on sending brand messages to the customers so they buy the product if they could relate to the product’s message. The communication segment is focused more on building long-lasting relationships through communication (Smith, K.T., 2003). For example, in our personal lives, we build relationships with people by listening to them and learning from what they have to tell us. The same concept is effective in a business looking to develop a relationship with their customers.
Another new approach that has emerged in the contemporary market is relationship marketing. A shift in paradigm is on its way. In Europe, Australia and North America there has been a paradigm shift in service marketing and Europe there has been a paradigm shift in industrial marketing (Grönroos, C.,1997). To utilize a marketing metaphor, the marketing mix is more product-oriented than being market-oriented or customer-oriented. Even though McCarthy (1979) perceives the interactive nature of the Ps, the model itself doesn't expressly incorporate any interactive components. Besides, it does not demonstrate the nature and extent of such interactions.
The new approach, relationship marketing, has developed inside the fields of service marketing and industrial marketing (Evert, G., 1991). The phenomenon depicted by this idea is unequivocally upheld by continuous patterns in the present-day business. Marketing is to establish, nurture, and improve relationships with consumers and different partners, at a benefit, so the targets of the parties included are met. This is accomplished by the fulfilment of promises and by mutual trust. This marketing mix has already become relevant in China. One of the most developing trends in Chinese e-business may originate from Guanxi, a Chinese word for social trust (Choi, Y. et al., 2015). The relationship marketing mix could be critical in maintaining Guanxi as this concept aims for a long term relationship, which is usually built on trust.
Promoting a product has now become more about engaging with individuals rather than targeting potential clients with advertisements and announcements. Rayport and Sviokla (1994) also agree that the 4P's are no good in the marketspace as they describe it as "disintermediation, i.e. elimination of market mediator enabling direct trade with buyers and consumers"(Rayport, J.F. and Sviokla, J.J., 1994, Pg 698). Marketers now are more concerned about customer satisfaction and personalization as opposed to aggregate needs while putting more emphasis on customer service and relationship promoting.
Sustainability has been a growing concern regarding the natural environment, which has resulted in the transformation of the competitive landscape and constraining companies to take a look at the costs and profits of greening their marketing mix. Sustainability is defined as the “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (World Commission on Environment and Development 1987, pg. 43). Sustainability issues have turned out to be progressively critical to corporate decision-makers as companies face public sensitivity, stricter guidelines, and growing stakeholder pressures focused on saving the common habitat (Maignan and Ferrell, 2004). There has been a shift in the consumer's preferences towards environmentally friendly products and services. (Kotler 2011).
Greening the marketing mix means incorporating the sustainability elements in the marketing mix. For example, HSBC is aiming for a zero-carbon footprint and Walmart is implementing procedures that empower sustainability among its suppliers.
Green pricing strategy refers to pricing exercises that record for both the environmental costs and the economic costs of marketing. Strategically, firms can utilize pricing activities, for example, refunds for returning recyclable packaging or charge more for products that harm the environment. For example, Coca-Cola launched its RecycleBank that rewards its customers for recycling their bottles (Goldschmidt, 2011), and in Mark & Spencer, they now charge their customers for plastic bags to limit their usage.
Greening the place segment in the marketing mix refers to creating policies that require suppliers and distributors to adopt environmentally friendly responsibilities. For example, Hewlett-Packard has joined forces with Staples in its authorized recycling location program for printer ink cartridges (Matthews, 2011). Firms could also set up eco unions with channel partners to refine the environment impact on their joint activities, such as “reconfiguring logistics arrangements to make them environmentally efficient, i.e. fewer and fuller cargos)”( Leonidou, C.N et al, 2013, pg. 154). World’s leading firms like Nestle and L’Oréal have partnered with Tesco, one of their biggest retail accomplices, to establish the Supply Chain Leadership Coalition, which stimulates ways to lower the carbon footprint in their distribution channels ( suppliers to consumers).
When it comes to green promotion methods, these are methods that are intended to convey the environmental benefits of the company’s goods and services. “Such efforts may include advertising environmental appeals and claims, publicizing environmental efforts, and incorporating environmental claims on product packaging”( Leonidou, C.N et al, 2013, pg. 154). For example, Timberland has launched its Green Index rating framework that tells the customers about the environmental effect of every item Timberland produces. In the U.K, Procter & Gamble has succeeded from its campaign to lower consumers’ washer temperatures and to profit from development in Ariel's technology as sparing 60,000 t of carbon dioxide every year (Belz and Peattie, 2009).
The green marketing strategy for the product segment of the marketing mix can be beneficial for two main reasons. To begin with, by embracing more environmentally friendly products along with price, place, and promotion programs, companies may grow their image and status among consumers. By fulfilling stakeholder demands for environmentally friendly products, companies can get more positive exposure and stay away from issues that concern environmentally driven consumers. Second, if the green marketing strategy is carried out well then it may increase sales volumes as it will permit the companies to access new market fragments, i.e. consumers for whom the environment is an abrogating concern(Baker and Sinkula, 2005). It might likewise result in enhanced satisfaction and loyalty among consumers since green marketing strategy may reinforce their impression of product value and address any environmental concerns. Therefore, we can conclude that implementing a green marketing mix is positively associated with product, price, place and promotion strategies. As the companies are promoting sustainability strategies in their businesses, the marketing mix also needs to promote the same goal, and thus the 4P’s do not work with the current market trends.
THE COM MODEL
The 4P’s labelling is not useful when it comes to real-time management process of comprehending the problem and working out a solution.An example of this could be moving locations of different foods in a canteen setting to impact the decision. The question that arises in our mind is over here is- to what extent has the 4P model helped the social marketer to execute his marketing plan? It’s simple enough to label the place as canteen, or product as healthy food; however, it is not easy to perceive how this label has added anything to our comprehension of how to successfully design canteen layouts. Another example might be the utilization of opt-out schemes to increase the rates of organ donations. Applying the 4P’s, it will depict this as a price drop. It might be right to depict this as a price drop, yet again the issue is whether the idea of price would have helped in solving the issue of low organ donation. Tapp (2013) has come up with a solution to this issue by introducing the capability opportunity motivation (COM) model. This model links together “behavioural analysis with design solutions” (Tapp, A. and Spotswood, F., 2013, pg. 213).
Figure 2: The figure above shows a basic outline of the capability opportunity motivation (COM) model ( Source: Tapp, A. et al., 2013).
This paper criticizes the role of the marketing mix as a management tool of traditional marketing and evaluates the role of the marketing mix as a marketing tool for the contemporary market. Despite the history and reputation of the 4P’s as a significant theoretical and practical segment of contemporary marketing, few scholastics have expressed their doubts and disapproval with regards to the value and the future of the 4P’s as a tool for marketing. Several academics have put forward their alternatives that range from minor adjustments to total dismissal. Both academic literature and textbooks have made it evident that 4P’s are regarded to be unfit to address service marketing, industrial marketing, and relationship marketing. The above discussion clearly emphasizes on communicating effectively with consumers and the need to invest in a consumer-centric market when approaching a contemporary market.
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