Contribution to BOLA by Charles Dennis

The Marketing Mix

When we talk to "marketing mix", it refers to the make-up of organisation's overall offer, or value, to the customer. 'The basic marketing mix is often nicknamed

"the 4Ps" (product, place/distribution, pricing, promotion); these are elements in the marketers armoury - aspects that can be manipulated to keep ahead of the competition'

Dibb & Simkin, 1994.

The marketing mix can be expressed in a more customer orientated way as the '4Cs':

• Customer Value 'product' benefits from the buyers point of view
• Cost to the customer 'price' plus the customers buying and acquisition costs - e.g. travel
• Convenience for the buyer equivalent to 'place'/channels of distribution
• Communication - a two-way dialogue - not just the sales promotion or sales transaction itself but all interactions between marketer and customer - before, during and after the exchange in a long-term relationship.

Marketing of Services

The marketing of services presents particular problems given characteristics such as:

• Intangibility
  Services cannot be touched or stocked. They are an experience.
• Inseparability
  Production, consumption and distribution are simultaneous. 'Production' staff are also the customer contact.
• Variability
  Quality is variable - and customers tend to use Price as an indicator of quality
• Perceived Risk
  Customers are less easily convinced of reliability than with a tangible product.

To address the special difficulties of services marketing, 3 more 'Ps' can be added to the marketing mix:

• People
  Staff selection, motivation and particularly customer care training are critical.
• Physical Evidence
  The decor and ambience are very much part of the product offer - as are customer testimonials and celebrity endorsement.
• Process
  The efficiency of the process is what provides the benefits for the customer. Efficiency can be monitored by measurers of performance, e.g. based on satisfaction questionnaires and 'mystery customer' surveys.

[largely based on Dibb and Simkin 1994].

Marketing Strategy

The key steps to a successful strategy can be summarised as:

• Being Clear about Mission
  The common, customer-orientated thread running through all the activities of the organisation and how we define the kind of market-oriented organisation we want to be.

• Marketing Research
  Answering basic questions such as
  • Who are our customers? What do we really know about their needs, wants, preferences, their behaviour, their life styles?
  • What benefits do our customers want from us? What can we give then .... at a price .... that other companies do not?
  • How do we perform in comparison to our competitors? (Benchmarking)
  • How are we currently performing for our customers? Where are the gaps, the dull points, the fudges, the points of excellence .... the USPs (unique selling points)?
  • How are we different, why are we different?
  • How can we better delight? How do we change? What do we change?
  • How clever are we with our market intelligence? How well is our market research working?
    
    

• Setting Strategic Aims
  e.g. in terms of:
  • market penetration
  • market development
  • product development and
  • entering new markets
    
    

• Segment the Customers
  Considering and targeting groups who share similar needs - and who, according to their characteristics, will respond in a similar way
  
  
• Design a Marketing Strategy
  to achieve specific marketing objectives, based (e.g.) on the Marketing Mix.
  
  
• Set Tactical Plans, Budgets, Programmes
  and assign individual responsibilities to achieve the objectives
  
  
• Monitor Progress
  measure against standards and control

Summary

Marketing puts the customer at the centre of the organisation. The organisations which do so, reap the profits. In the grocery sector, Sainsburys, and more recently Tesco, have a firm commitment to marketing, putting them amongst the most profitable retailers in the country. It was said several years ago that Marks & Spencer did not even use the word 'marketing'. They believed they placed their customer truly at the centre and that their merchandising and customer definition strategy led them to be the most profitable retailer in Europe.

But how does this stack up today. It seems that their customers changed. Customer preferences and desires moved on and the company neglected to see how their customer base was becoming more segmented with differing tastes emerging. The company's products and services become seen as less "vibrant", too staid, insufficiently dynamic.

The word got out quickly to customers that the merchandise range was dull, lifeless, old. Profitability levels and customer confidence dropped. The company that neglected its market research needed to regroup urgently and strengthen its marketing skills. However this required profound management reorientation and development of marketing competences. The famous retailer is now struggling to make up lost ground and to regain its ascendency in a much more volatile market.

References

• Adcock D, Bradfield R, Halborg A & Ross C, Marketing Principles & Practice, Pitman, 1995
• Jobber D, Principles and Practices of Marketing, McGraw Hill, 1995
• Dibb S & Simkin L, The Marketing Casebook, Routledge, 1994