CHAPTER NINE
MARKETING MIX
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
i. Define marketing mix;
ii. Identify the 7Ps and 7Cs of marketing;
iii. Explain the 7Ps of marketing; and
iv. Explain the 7Cs of marketing.
THE MARKETING MIX
Marketing mix refers to a set of controllable tools or variables that a firm uses to influence the target market. The marketing mix comprises the traditional marketing mix (the 4Ps) and the enhanced or extended marketing mix (the 3Ps), all together making 7Ps of marketing. These 7Ps of marketing represents the producer or seller’s view of the marketing mix, while the consumers view the marketing mix as the 7Cs as shown in table 9.1:
Table 9.1: Marketing Mix Variables
| 7Ps | 7Cs |
ORGANIZATIONS’ VIEW | CUSTOMERS’ VIEW | |
1 | Product | Customer solution |
2 | Price | Customer cost |
3 | Place | Convenience |
4 | Promotion | Communication |
5 | Physical evidence | Customer visibility |
6 | Processes | Competence |
7 | People | Customer care |
THE 7Ps AND 7Cs OF MARKETING
1. Product versus Customer Solution
To a layman, a product is simply an output of a given company that is offered for sale. Technically, however, a product is more than a company’s output. It is a set of tangible and intangible attributes, including packaging, colour, price, manufacturer’s prestige, retailer’s prestige, and manufacturers’ and retailer’s services which the buyer accepts as offering satisfaction (Stanton, 1981:30). Also, Kotler and Armstrong (2006:252) define product as “anything that can be offered to a market for attention, acquisition, and use or consumption and that might satisfy a want or need.”
To fully comprehend Stanton’s definition of a product, the key terms used are explained below:
Tangibles: Products have certain features that can be sensed by the 5 organs: eyes, nose, ears, mouth/tongue and nervous systems (e.g. hand). For example, products like cars, computers, utensils, TVs, lamp, food, etc. can be seen, felt, heard, smelt, touched, and tested. Also, a product may have several attributes such as package (container), and colour (white, red, blue, green) etc. which offer satisfaction to consumers.
Intangibles: Products have major or minor intangible attributes. A product characterized with major intangibles is closer to pure service, and one that is characterized with minor intangibles is closer to pure goods/product. The intangible attributes of a product are those attributes that cannot be seen, or touched. Examples are after sales services such as servicing a car, installing and testing a satellite dish, etc.
Manufacturer’s and retailer’s prestige: A brand name is the most valuable assets of business organizations, often outlasting the organizations’ product. It takes time and costs money (high promotion budget) to build strong brands and good will. For example, Coca cola has been in business for decades and is one of the most expensive brands in the world; it costs several billion of dollars.
Manufacturer’s and retailer’s services: A product may include all services (i.e. cost of services) accompanying a product such as after sales services earlier mentioned.
Offering satisfaction: The hallmark of production and marketing is to satisfy consumer needs at a profit. That is, a company’s products should be capable of meeting and exceeding consumers’ expectation from the product in terms of attributes, services and prices.
As earlier stated, consumers view product as customer solution. Consumers do not just buy a product for the fancy of it but mainly because they have a problem to solve. Thus, consumer purchasing decision is a problem solving decision. Since no two consumers are the same in terms of needs and problems, firm’s should endevour to produce one product in different shapes, colour, and performance so as to be able to meet different consumers’ needs and solve different consumers’ problems. For example, apart from mobility, consumers may expect other priorities from a car: speed, uniqueness (one-in-town), economy, safety and durability.
2. Price versus Customer Cost
Price is the amount of money charged by a producer or seller for a given product and its accompanying services. To the producer, price serves as revenue. In fact, of all the marketing mix variables price is the only element that generates revenue for the company; other variables only produce cost.
We pay prices on daily basis without noticing it much because price is called by different names. For example, when we pay fare for transportation, tuition/fee for registration in a university, toll for motor park or road usage, commission for sales person, interest for money borrowed from a bank, bill for water and electricity consumption, etc., we are simply paying prices.
However, price to the consumer constitutes cost. That is, the amount of money he/she has to part with in order to receive something of value – product, services, idea, etc. This has a lot of implications for the marketing firm. First, when a firm reduces prices it has reduced customer cost. Price reduction can influence consumers to buy more especially if the consumers are price sensitive. Secondly, when a firm increases prices it has also increased customer cost. Price increments can influence consumers to buy less especially if the consumers are price sensitive. At the same time, prices can be fixed very high and still records higher sales especially if the firms target market is the very rich. High income earners are usually price insensitive.
3. Place versus Convenience
Place is the third element of the marketing mix. Narrowly defined, it refers to the placement of an entrepreneur’s products where the consumers can easily have access to them and purchase them. Broadly defined, it refers to the movement of products from the factories where they are produced to the intermediaries and finally to the consumers.
Consumers view the element of place as convenience. That is, small businesses’ products and services should be made available at places where consumers can easily see and purchase them without incurring high transportation cost or wasting much time and energy searching for the products. To do this effectively, the services of the intermediaries, otherwise called the middlemen becomes inevitable if the commodity is a physical product. However, for certain services such as banking services, the use of intermediaries may not be feasible since service production and consumptions take place simultaneously. Perhaps, this explains why commercial banks in Nigeria are taking their services available to almost the doorstep of consumers by opening branches everywhere.
4. Promotion versus Communication
After producing, pricing and placing product all right, there is also the need to inform the target consumers about the existence of the product, the price at which the product is sold, and the place(s) where the products can be seen and purchased. The marketing mix element that performs this vital function is promotion. Etzel, Walker and Stanton (1997:440) define promotion as “the element in an organization’s marketing mix that serves to inform, persuade, and remind the market of a product and/or the organization selling it, in the hope of influencing the recipients’ feelings, belief or behavior.”
Promotion is perceived to be one sided and sounds egocentric. That is, firms often promote their products and organization for their own selfish interest and not for the interest of the ultimate consumers. To change this thinking, most marketers and marketing textbooks now talk about marketing communication instead of marketing promotion. A company communicates message about a product to target consumers but promotes a product. Also, marketing communication facilitates passing of information from the producer to the consumers on one hand, and the passing of information (feedback) from the consumers to the producers on the other hand. For marketing communication(s) to be effective (unique, impressive, and capable of achieving marketing goals), it/they must be characterized with the cognitive and emotional attributes. Thus, companies should pay utmost attention to the content, length and sound of the message they are communicating to the consumers.
Marketing communication mix
Marketing communication mix is also called promotion mix. It refers to a set of communication tools that a company uses to achieve its communication and marketing objectives. These are advertising, sales promotion, public relations, personal selling, and direct marketing.
i. Advertising
In business, advertising is regarded as a communication tool that enables business enterprises to inform and remind the public, through commercial broadcasting and print media, about its goods and services for the purpose of stimulating and sustaining awareness, interest, desire, trial, repeated purchase and ultimately, increasing company sales and profits. It can also be regarded as the process of setting communication objectives and budget, designing the message, choosing a medium or media, implementing or dissemination information, and evaluating its effectiveness in terms of message recall, product awareness, attitudinal change, and change in sales revenue, etc. In particular, Kotler and Keller (2006:526) define advertising as “any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.” The advertising mediums are newspapers, television, direct mail, radio, magazines, and outdoor (e.g. bill boards, public spaces, etc).
ii. Sales promotion
Sales promotion is any temporary effort by a company that causes excitement and encourages immediate purchase of a firm’s products and services. It can also be regarded as a variety of short-term incentives that encourage trial purchase of a product or services. It includes contest, games, lotteries, premiums and gifts, samples, fairs and trade shows, exhibits, demonstrations, coupons, rebates (cash refund offers) , entertainments, etc.
iii. Public Relations (PR) (or Marketing Public Relations[MPR])
Through marketing activities, firms apart from producing value-added goods and service to the public on continuous basis, also provide social responsibility services to address environmental and health issues of public concern. These breakthroughs and interventions are newsworthy, and therefore, need to be communicated to the public through newsletters, press conferences, press releases, newspaper articles, and radio and television programmes. A simple definition of public relations, therefore, is getting credits or being recognized for doing good to the society through effective communication to the public. That is, PR is about publicity.
Public relations may be viewed as a tool for managing relationships with different public groups or stakeholders – government agents, consumers, suppliers, media, labour unions, environmentalists, financial institutions, and host community - in a given market. Since public relations is multi-disciplinary, marketers now tag public-relations that is marketing-oriented as Marketing Public Relations (MPR). MPR is concerned with developing programmes that encourage purchase and satisfaction by communicating information and delivering impressions.
iv. Personal selling
This refers to a direct method of selling in which a company’s sales representatives meet prospective buyers, communicate to them about the product, sell to them and offers installation and maintenance services. Put differently, it refers to face-to-face, telephone or internet interaction between the company’s sales person(s) and one or more prospective buyers for the purpose of making presentations, answering questions and procuring orders.
v. Direct Marketing
The advancement in information and communication technologies has taken marketing communication to another level – direct marketing. Direct marketing is the use of cell phones, e-mail, internet, fax or mail to inform individual customers and solicit for their response about a given product or service. Forms of direct marketing are telephone marketing, direct-mail marketing, catalog marketing, direct-response television marketing, kiosk marketing and on-line marketing.
5. Physical Evidence versus Consumer Visibility
Because service is intangible (i.e. consumers cannot see, touch, smell, feel it), consumers always look around the environment or atmosphere where service is provided for evidence of quality (to evaluate the quality of services that is about to be received). Thus, the emergence of physical evidence as a marketing mix tool for influencing consumer purchasing decisions.
Physical evidence refers to the general appearance of the service environment: office building, office fittings, computers and other equipment, staff outfits, painting and other tangibles. Consumers view physical evidence as consumer visibility. Therefore, service companies must decorate their service environment not only with visible items but with latest, unique and attractive internal decors and working equipment to give new and old customers an impression of high and superb services quality prior to services delivery.
6. Processes versus Competence
Purchase and delivery of service usually involves many steps or procedures called service process. For example, to post a mail, one first buys a stamp from a Nigerian Postal Service (NIPOST) official, then gums the stamp on an envelope, and posts it in a mailing box. The process may be long like in hospital services, booking flight ticket, etc. It is important to note that the consumer is the input that is processed in the services process. Hence, time and convenience is of utmost concern to the service consumer.
What customers expect from the service company is competence in handling their (customers’) complaints, orders, and emergencies. Thus, the service company must be very competent in these areas. Service processes must be simplified to be less time consuming on one hand and very convenient on the other hand. If consumers must join queue, let them join the queue sitting instead of standing. If consumers must wait for long, the company must devise ways of making their long stay look short and comfortable. Music, television programs, satellite dish programs, movies, and newspapers can be provided to entertain consumers and reduce waiting time.
7. People versus Customer Care
People refer to the service providers or employees providing services. Service itself and service providers are inseparable. For example, the barber must be present before he/she can perform haircut services to consumers. Also, the doctor must be present to carry out surgery on a patient. Since service provider must interact with the customer and carry out services directly on him/her, the employees’ job skills and proficiency, friendliness, politeness, patience, and empathy in dealing with customers are very crucial.
Ultimately, apart from the front-liners and other executives being competent on their jobs the customer is essentially expecting care. Smiling at customers on arrival, beginning a transaction with “good day and what can I do for you,” and ending the transaction with “thank you and have a nice day” is a systematic way of providing and delivering high customer care and superb service quality. To do this effectively, service companies must imbibe the concept of internal marketing – training and motivating all staff in organization to think customer and serve customers well. That is, every employee is a marketer irrespective of department or management level.
SELF-ASSESSMENT QUESTIONS
1. List the 7P’s and 7C’s of marketing.
2. Explain the following:
i. Product versus Customer solution
ii. Price versus Customer cost
iii. Place versus Convenience
iv. Promotion versus Communication
v. Physical Evidence versus Consumer Visibility
vi. Process versus Competence, and
vii. People versus Customer Care.