3.10. NEW APPROACHES TO MARKETING MIX

When marketing their products companies need to create a successful mix of:

 the right product  in the right place  sold at the right price  using the most suitable promotion. Everyone who has studied marketing in the last 50 years has been introduced to the 4Ps (product, place, price, promotion) of the Marketing Mix (see pill "Introduction to Marketing Mix"). However, the 4 Ps is just one approach to the Marketing Mix. As this is quite an old concept, some new approaches have been developed over the years.

7 PS OF SERVICE MARKETING Traditionally, the marketing mix was developed for the fast moving consumer goods sector. As service sectors became more important and more aware of marketing, the concept of marketing mix evolved. Extended Marketing Mix was suggested in 1981 by Booms & Bitner, which added 3 new elements to the 4 P’s Principle. This is the most widely used extension of the traditional marketing mix, which was initially intended for services marketing but can actually be applied to any business (as there are very few "pure" goods left on the market - they are usually surrounded or bundled with services!). The additional 3 Ps include:

1

People The most important part of any business is people. You and your employees are the ones who think of that great idea, deliver that great customer service and represent your company. It’s important to recruit and train the right people, because this is who the customers will be dealing with. When dining at a restaurant, if a rude waiter is encountered, the entire experience will be labelled as bad service. Do you have the skills to deliver your products and services? Have you got the right blend of experience? Customers are often included in this part of Marketing Mix as well. These are the people who help you spread the word about your business, who love your brand and will introduce you to your new customers. Building strong and engaging relationships with your customers is a key to the successful communication of your product or service offer. Processes The process of service delivery is crucial since it ensures that the same standard of service is repeatedly delivered to the customers. Some companies have a service blue print which provides the details of the service delivery process, often going down to even defining the service script and the greeting phrases to be used by the service staff. How many rings does your customer need to wait until the phone is answered? Does each member of staff get on the job training? Are the processes in place for your staff to deliver great customer service? Physical evidence/ Layout Physical evidence refers to whatever your customers can see before purchasing. This can include the physical environment, packaging, and anything else that helps in presentation. People will not buy from a website if they feel it looks insecure or looks like a spam site. If you are selling your goods in a market, they will expect the stall to look clean and tidy with the goods displayed. What experience are you providing to your customers during the purchase process itself? Is it pleasant and rewarding doing business with you? How can you tailor your customer interactions to add value and act as a unique differentiator for you?

C's, A's or O's? Since 90s, new variations of Marketing Mix were introduced, replacing the Ps with Cs, As, Os, Es, etc. The most well-known "alternative" - Four Cs model - suggests looking at the marketing mix from a more consumer-oriented point of view and replaces the traditional P's with 4 C's:

2

Consumer wants and needs (vs. Products) Study consumer wants and needs! In most cases, you have to find out what people want and then "build" it for them, their way. Cost (vs. Price) It is important to understand that Price is just one part of the cost to consumer. If you sell produce of your farm directly to the consumer, you have to consider the cost of driving to your farm. Convenience (vs. Place) You must think of convenience to buy instead of place. You have to know how each customer segment prefers to buy - directly from the producer, on the Internet, on the phone, using credit cards, etc. Communication (vs. Promotion) Consider the communication instead of promotion. Promotion is a one-way action. Communication requires a give and take between the buyer and seller (that's nicer). If you’re a small business owner, understanding the 4Cs can give you advantage over your competitors. Remember that 4C success starts with knowing your target customer and identifying their needs and wants. Then you can respond with products or services that they feel are valuable. In the 4 A's model, the A's stand for Acceptability, Affordability, Availability, and Awareness. Again, it emphasises the need to see every business action through the eyes of its consumers. It's ensuring that customers are aware of the product, but also that the product is affordable, accessible and acceptable to them. It's about creating value for customers, building relationships and brand loyalty. The 4 O's model is basically the same four Ps, with slightly more emphasis on organisational objectives that marketing should serve: 1. Objects - the way the product is manufactured as well as its level of quality. 2. Objectives - considerations about the revenue the company should generate and the price at which this revenue objective should be met. 3. Organization Sale and distribution of the product; determining the distribution methods to be used.

3

4.

Operations: Promotional operations that most suit the product, such as telemarketing, direct mail etc.

http://www.livingstonwhite.com/wp-content/uploads/2013/03/untitled-11.png

An interesting new approach to Marketing Mix is 4 E's: 1. Experience (vs. Product) Instead of thinking just about your product, start thinking about the full customer experience. How do customers shop for your product? Who influences their purchases? What happens after they buy? 2. Everyplace (vs. Place) Companies need to understand the full range of possibilities in reaching people. It’s no longer about grabbing attention when people are watching television, reading a magazine or visiting a shop. We have to contact consumers on their terms, and that could be anyplace or everyplace. 3. Exchange (vs. Price) Do you know the value of your customers – what they really bring to you in revenue and profit in a long term? What are you willing to offer your consumers in exchange to their time and engagement? 4. Evangelism (vs. Promotion) This is about creating a mission and brand (see more on brands in pill "Branding") experience that are so inspiring to consumers that they engage with you, and share their enthusiasm with others. In today's marketing, the key ingredients are emotion and passion. You must know how to find the energy and passion in what you are selling. Marketing mix used by a particular company will vary according to its resources, market conditions and changing needs of its customers.

4

The ‘four Ps’ and ‘four Cs’ are like two sides of the same coin, one seen from the seller's and the other from the buyer’s perspective. When combining them in your marketing mix, you get a fuller picture of what you want the product or service to do and how it should be achieved. While additional P's in the so-called extended marketing mix put emphasis on people, processes and presentation that are especially important in service business, the C's, A's, O's and E's (and any other X's you may encounter) are simply another way of looking at the P's. You need to consider all viewpoints in order to maximise the possibility of success. While you must structure the product offer to serve your own interests, often you will find that looking at the deal from the customer’s perspective allows you to find the most effective solutions.

EXAMPLES The 4 A's of Marketing: the Starbucks case: http://www.mind-storm.com/mastering-the-4-as/ The 4As model is explained using the example of Starbucks. A key factor in developing acceptability was to educate the consumers to the quality of the products. By increasing the perceived value of the product in the eye of the consumer, Starbucks was able to raise its prices while keeping the product affordable. The company’s availability strategy relies on two approaches driven at the same time: horizontal expansion and vertical growth. While small coffee shops would benefit from local awareness, Starbucks leveraged its size and location strategy to reach high brand awareness, mainly by word-of-mouth. By building your corporate strategy on the framework of the 4 A’s you are creating a high demand business from a customer-value perspective.

FURTHER READING How to tell your local food story: http://www.gov.mb.ca/agriculture/business-andeconomics/market-development/pubs/how-to-tell-your-local-food-story.pdf Let’s take a look at the business of selling locally-grown and/or locally-produced foods at a farmers’ market, roadside stand, or farm gate from your customers’ perspective using each of the elements of the 4 C’s marketing mix. The marketing mix – the 4Cs. A customer centric approach to looking at your marketing: http://business-survival-toolkit.co.uk/stage-four/marketing-and-communications2/themarketing-mix-the-4cs

5

The tool asks you to consider a number of statements based on the 4Cs and answer true or false. It is an exercise you can do on your own or with a group and should take 20 to 30 minutes. It is suitable for businesses of all scales and sectors. A. Rodriguez. Tourism and the Marketing Mix: http://www.freenomads.com/blog/?p=296#sthash.w5FBbDse.dpbs The article discusses the traditional 4 Ps as well as additional Ps for tourism. B. Fetherstonhaugh. The P's are out, the E's are in: http://www.ogilvy.com/On-OurMinds/Articles/the_4E_-are_in.aspx The author's advice is to stop thinking just about your product and start thinking about the full experience. And the first step is to discover the Customer Journey. Do you know how customers shop for your category? Do you know who infl uences their purchases, and where and when their purchases happen? Do you know what happens after they buy? If you don’t, you cannot understand the end-to-end customer experience. And you cannot know where to focus your precious marketing effort. J. King. Social Media IS the 7 P's of Marketing: http://www.business2community.com/socialmedia/social-media-is-the-7-ps-of-marketing-0544260 The old fundamental classic 7 P’s of Marketing can be adapted to incorporate Social Media. By applying old and new theories and tools, Social Media should be seen to compliment and enhance traditional Marketing.

6