Marketing mix

The marketing mix approach to marketing is a model of crafting and implementing marketing strategies. It stresses the "mixing" or blending of various factors in such a way that both organizational and consumer (target markets) objectives are attained. The model was developed by Neil Borden (Borden, N. 1964) who first started using the phrase in 1949. Borden claims the phrase came to him while reading James Culliton's description of the activities of a business executive:

(An executive is) "a mixer of ingredients, who sometimes follows a recipe as he goes along, sometimes adapts a recipe to the ingredients immediately available, and sometimes experiments with or invents ingredients no one else has tried." (Culliton, J. 1948)

When blending the mix elements, marketer(s) must consider their target market. They must understand the wants and needs (see Maslow) of the market (customer) then use these mix elements in constructing (formulating) appropriate marketing strategies and plans that will satisfy these wants. The mix must also meet or exceed the objectives of the organization. As Borden put it,"When building a marketing program to fit the needs of his firm, the marketing manager has to weigh the behavioral forces and then juggle marketing elements in his mix with a keen eye on the resources with which he has to work." (Borden, N. 1964 pg 365). A separate marketing mix is usually crafted for each product offering or for each market segment, depending on the organizational structure of the firm. Borden goes on to suggest a procedure for developing a marketing mix. He claims that you need two sets of information; a list of important elements that go into the mix, and a list of forces that influence these decision variables.

"The Four Ps"

The most common variables used in constructing a marketing mix are price, promotion, product and place (also called distribution). First suggested by Jerome McCarthy (McCarthy, J. 1960), they are sometimes referred to as the four Ps. McCarthy said that marketers have essentially these four variables to use when crafting a marketing strategy and writing a marketing plan. In the long term, all four of the mix variables can be changed, but in the short term it is difficult to modify the product or the distribution channel. Therefore in the short term, marketers are limited to working with only half their tool kit. This limitation underscores the importance of long term strategic planning.

McCarthy's four P's look at marketing from the perspective of the marketer. It describes what variables marketers have to work with, and hence is sometimes referred to as a marketing management perspective. Robert Lauterborn (Lauterborn, R. 1990) claims that each of these variables should also be seen from a consumer's perspective. This transformation is accomplished by converting Product into "customer solution", Price into "cost to the customer", Place into "convenience", and Promotion into "communication". He calls these the four C's.

Other variables

Shortly after McCarthy developed the four P's, Borden devised a model with twelve decision variables. They were product planning, pricing, branding, channels of distribution, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding (Borden, N. 1964 pg 363).

Another set of marketing mix variables were developed by Albert Frey. He (Frey, A. 1961) classified the marketing variables into two categories: the offering, and process variables. The "offering" consists of the product, service, packaging, brand, and price. The "process" or "method" variables included advertising, promotion, sales promotion, personal selling, publicity, distribution channels, marketing research, strategy formation, and new product development.

More recently, Bernard Booms and Mary Bitner built a model consisting of seven P's (Booms, B. and Bitner, M. 1981). In addition to product, price, promotion, and place, they included people, physical evidence, and process. "People" was added, to recognize the importance of the human element in all aspects of marketing. They added "process" to reflect the fact that services, unlike physical products, are experienced as a process at the time that they are purchased. "Physical evidence" or "peripheral clues" reflects the physical surroundings associated with a service encounter or retail location. Other marketing theorists include "partners" as a mix variable because of the growing importance of collaborative channel relationships.

One more P, packaging, has been added to this list by some people. The rationale is that it is very important how the product is presented to the customer, and the packaging is often the first contact that a customer has with a product.

The marketing mix model is often expanded to include sub-mixes. For example, the promotion variable can be further decomposed into a promotional mix consisting of advertising, sales promotion, personal selling, publicity, direct marketing, undercover marketing, viral marketing, and e-marketing. Within the promotional mix, advertising can be further broken down into an "advertising media mix" that specifies how much emphasis is placed on television ads, radio ads, newspaper ads, internet ads, magazine ads, etc.

Mix coherency refers to how well the components of the mix blend together. A strategy of selling expensive luxury products in discount stores has poor coherency between distribution and product offering.

Mix dynamics refers to how the mix must be adapted to a changing business environment, to changes in the organization's resources, and to changes in the product life cycle.

What's appropriate? Many professional marketers are confused or frustrated because they are not getting the results they desire. Often, it's due to an inappropriate marketing mix. It's essential to do research yet it must begin with the buyer, both prospective or existing. This buyer research should be the first element of any marketing mix and cannot be ignored.

Criticisms

Against the mix process generally, reengineering theorists claim that it re-enforces functional divisions within a company that lead to inefficiencies. According to Michael Hammer and James Champy (Hammer, M. and Champy, J. 1993), rather than organizing a firm into functional specialties (like marketing, sales, advertising, marketing research, new product development, public relations, etc.) and looking at the tasks that each function performs, we should be looking at complete processes from materials acquisition, to production, to marketing and distribution and customer satisfaction.

Also Peter Doyle (Doyle, P. 2000) claims that the marketing mix approach leads to unprofitable decisions because it is not grounded in financial objectives such as increasing shareholder value. According to Doyle it has never been clear what criteria to use in determining an optimum marketing mix. Objectives such as providing solutions for customers' at low cost have not generated adequate profit margins. Doyle claims that developing marketing based objectives while ignoring profitability has resulted in the dot-com crash and the Japanese economic collapse. He also claims that pursuing a ROI approach while ignoring marketing objectives is just as problematic. He argues that a net present value approach that maximizes shareholder value provides a "rational framework" for managing the marketing mix.

Against McCarthy's fourP's, some claim that they are too strongly oriented towards consumer markets and is not an appropriate model for industrial product marketing. Others claim it has too strong of a product market perspective and is not appropriate for the marketing of services.

References

• Borden, N. (1964) "The concept of the marketing mix" Journal of Advertising Research, vol 4, June, 1964, pp 2-7. - The same article can also be found in: Schwartz, G. (ed), Science in Marketing, John Wiley, New York, 1965, pp 386-397 - and also in: Enis, B. and Cox, K. (1991) Marketing Classics, A selection of influential articles, Allyn and Brown, Boston, 1991, pp 361-369.
• Bitner, J. and Booms, B. (1981) Marketing strategies and organizational structures for service firms, in Donnelly, J. and George, W. Marketing, American Marketing Association, Chicago, 1981.
• Culliton, J. (1948) The management of marketing costs, Graduate School of Business Administration, Research Division, Harvard University, Boston, 1948.
• Doyle, P. (2000) Value based marketing, Wiley, Chichester, 2000.
• Frey, A. (1961) Advertising, 3rd ed., Ronald Press, New York, 1961.
• Hammer, M. and Champy, J. (1993) Reengineering the Corporation: A Manifesto for Business Revolution, Harper Business Books, New York, 1993, ISBN 0-06-662112-7
• Lauterborn, R (1990) "New Marketing Litany: 4P's Passe; C words take over", Advertising Age, October 1, 1990, pg 26.
• McCarthy, J. (1960 1st ed.), Basic Marketing: A managerial approach, 13th ed., Irwin, Homewood Il, 2001.

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