The
marketing mix is a business tool used in
marketing
and by marketing professionals. The marketing mix is often crucial when
determining a product or brand's offering, and is often synonymous with
the
four Ps:
price,
product,
promotion, and
place; in service marketing, however, the four Ps have been expanded to the
Seven Ps or
eight Ps to address the different nature of services.
In recent times, the concept of
four Cs has been introduced as a more customer-driven replacement of
four Ps.
[1] And there are two
four Cs theories today. One is Lauterborn's four Cs (
consumer,
cost,
communication,
convenience), another is Shimizu's four Cs (
commodity,
cost,
communication,
channel).
History
The term marketing mix was coined in an article written by Neil Borden called “The Concept of the Marketing Mix.”
[2]
He started teaching the term after he learned about it from an
associate, James Culliton, who in 1948 described the role of the
marketing manager as a "
mixer of ingredients"; one who sometimes
follows recipes prepared by others, sometimes prepares his own recipe as
he goes along, sometimes adapts a recipe from immediately available
ingredients, and at other times invents new ingredients no one else has
tried.
[3]
Producer-oriented model
The marketer
E. Jerome McCarthy proposed a four Ps classification in 1960, which has since been used by marketers throughout the world.
[1]
Classification
| Category |
Definition |
| Product |
A product is seen as an item that satisfies what a consumer needs or
wants. It is a tangible good or an intangible service. Intangible
products are service based like the tourism industry, the hotel industry and the financial industry.
Tangible products are those that have an independent physical
existence. Typical examples of mass-produced, tangible objects are the motor car and the disposable razor. A less obvious but ubiquitous mass-produced service is a computer operating system.[1]
Every product is subject to a life-cycle
including a growth phase followed by a maturity phase and finally an
eventual period of decline as sales falls. Marketers must do careful
research on how long the life cycle of the product they are marketing is
likely to be and focus their attention on different challenges that
arise as the product moves through each stage.[1]
The marketer must also consider the product mix.
Marketers can expand the current product mix by increasing a certain
product line's depth or by increasing the number of product lines.
Marketers should consider how to position the product, how to exploit
the brand, how to exploit the company's resources and how to configure
the product mix so that each product complements the other. The marketer
must also consider product development strategies.[1] |
| Price |
the amount a customer pays for the product. The price is very
important as it determines the company's profit and hence, survival.
Adjusting the price has a profound impact on the marketing strategy, and
depending on the price elasticity of the product, often it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix.[1]
When setting a price, the marketer must be aware of the customer perceived value for the product. Three basic pricing strategies are: market skimming pricing, market penetration pricing
and neutral pricing. The 'reference value' (where the consumer refers
to the prices of competing products) and the 'differential value' (the
consumer's view of this product's attributes versus the attributes of
other products) must be taken into account.[1] |
| Promotion |
all of the methods of communication that a marketer may use to
provide information to different parties about the product. Promotion
comprises elements such as: advertising, public relations, personal selling and sales promotion.[1]
Advertising covers any communication that is paid for, from cinema
commercials, radio and Internet advertisements through print media and
billboards. Public relations is where the communication is not directly
paid for and includes press releases, sponsorship deals, exhibitions,
conferences, seminars or trade fairs and events. Word-of-mouth
is any apparently informal communication about the product by ordinary
individuals, satisfied customers or people specifically engaged to
create word of mouth momentum. Sales staff often plays an important role
in word of mouth and public relations (see 'product' above).[1] |
| distribution (Place) |
refers to providing the product at a place which is convenient for consumers to access. Various strategies such as intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer to complement the other aspects of the marketing mix.[1][4] |
The
seven Ps
is an additional marketing model that refers to the already mentioned
four Ps, plus 'Physical evidence', 'People', and 'Process':
[5]
Classifications
| Category |
Definition |
| Physical evidence |
elements within the store -- the store front, the uniforms employees wear, signboards, etc. |
| People |
the employees of the organization with whom customers come into contact. |
| Process |
the processes and systems within the organization that affects its marketing process. |
These latter three factors are not cited nearly as often as the first four.
Consumer-oriented model
Robert F. Lauterborn proposed a four Cs classification in 1993
[6]
which is a more consumer-oriented version of the four Ps that attempts
to better fit the movement from mass marketing to niche marketing:
| "P" category |
"C" category |
"C" definition |
| Product |
Consumer |
shifting the focus to satisfying the consumer needs. By defining
offerings as individual capabilities that are combined and focused to a
specific industry, the result is a custom solution rather than the
pigeon-holing of a customer into a product. |
| Price |
Cost |
reflecting the total cost of ownership. Many factors affect Cost,
including but not limited to the customer's cost to change or implement
the new product or service and the customer's cost for not selecting a
competitor's product or service. |
| Promotion |
Communication |
represents a broader focus. Communications can include advertising, public relations, personal selling, viral advertising, and any form of communication between the organization and the consumer. |
| distribution (Place) |
Convenience |
With the rise of Internet and hybrid models of purchasing, Place is
becoming less relevant. Convenience takes into account the ease of
buying the product, finding the product, finding information about the
product, and several other factors. |
Four Cs: in the Seven Cs Compass Model
(Corporation and consumer -oriented model)
After Koichi Shimizu proposed a four Cs classification in 1973, this was expanded to
the seven Cs compass model
to provide a more complete picture of the nature of marketing in 1981.
It attempts to explain the success or failure of a firm within a market
and is somewhat analogous to Michael Porter's
diamond model, which tries to explain the success and failure of different countries economically.
[7][8][9]
The seven Cs compass model are:
The four elements in the seven Cs compass model are:
| "P" category |
"C" category |
"C" definition |
| Product |
(C2)Commodity |
(Original meaning of Latin: Commodus=convenient) : It is not
"product out". The goods and services for the consumers or citizens.
Steve Jobs has been making the goods with which people are pleased. It
will not become commoditization if a commodity is built from the start. |
| Price |
(C3)Cost |
(Original meaning of Latin: Constare= It makes sacrifices) : There
is not only producing cost and selling cost but purchasing cost and
social cost. |
| Promotion |
(C4)Communication |
(Original meaning of Latin:Communio=sharing of meaning) : marketing
communication : Not only promotion but communication is important.
Communications can include advertising, sales promotion, public
relations, publicity, personal selling, corporate identity. |
| place |
(C5)Channel |
(Original meaning is a Canal) : marketing channels. Flow of goods. |
The compass of consumers and Circumstances (environment) are:
- (C6)Consumer – (Needle of compass to Consumer)
The factors related to consumers can be explained by the first character of four directions marked on the
compass model. These can be remembered by the
cardinal directions, hence the name
compass model:
In addition to the consumer, there are various uncontrollable
external environmental factors encircling the companies. Here it can
also be explained by the first character of the four directions marked
on the
compass model:
These can also be remembered by the cardinal directions marked on a compass. The seven Cs compass model is a framework in
co-marketing
(symbiotic marketing). It has been criticized for being little more
than the four Ps with different points of emphasis. In particular, the
seven Cs inclusion of consumers in the marketing mix is criticized,
since they are a
target of marketing, while the other elements of the marketing mix are
tactics.
The seven Cs also include numerous strategies for product development,
distribution, and pricing, while assuming that consumers want two-way
communications with companies.
