Is The Marketing Mix Approach Redundant

Published Date: 02 Nov 2017

Introduction

For many people, the concept of "marketing mix" is the first thing that they come up with when we ask the question of "what is marketing?" In fact, the marketing mix approach is one of the most famous and widely-discussed concepts in marketing. The term "marketing mix" was coined by Borden (1953) who adopted the idea from Culliton's (1948) research into marketing costs among manufacturers. Culliton (1948) made the analogies of marketing decisions as the outcome of recipes, and marketers as the "mixers of ingredients" who can choose to adopt various existing recipes at one time, and to develop their own original recipes at another. Marketing mix is suggested to constitute the four fundamental elements of marketing actions; namely, price, place, product and promotion (McCarthy, 1960). Together, these elements act as the means to illustrate the strategic position of a product within the market. This essay will provide a general description of the marketing mix approach and its contribution as a tool for the implementation of marketing strategies so as to satisfy the needs and wants of the customers. It will then contend that this approach is in some ways flawed, and may sometimes be not applicable to the contemporary marketing environment due to the dramatic changes and movements in the market. However one should also be cautious that the need for modifications in one approach does not imply the total abandonment of it. Instead, we should focus on the ways in which improvements can be done so as to reconceptualise the efforts on the marketing mix approach to see how it can fit into the current business environment.

Taking on McCarthy's (1953) ideas, the four elements of the marketing mix are often referred to as 'the four Ps'. Product is the physical entity, or the intangible service that people sell or buy. It is the central focus where marketing strategies should be targeted at. It is concerned with what the product means to customers and is what keeps the customer attached to the seller. Some marketing decisions to be made include the appearance, functionality and branding of the product. Price is the amount that the customers pay for the product, the element which creates sales revenue. Pricing of a product is affected by a number of factors such as competition, market share and the perceived value by the customers. Place, or the distribution channel, is the location where manufacturers can deliver the products to the customers. Marketers have to consider issues relating to transportation of goods, inventory, logistics, etc. Promotion refers to the "business communication" with the customers within the market to generate a positive customer response. Some key processes include advertising, branding, public relations and publicity. Each of these four elements is interrelated, with one impacting on another (Borden, 1964). For instance, the branding strategy a marketer implements will affect the pricing, channel of distribution as well as promotional approaches. Every element plays a significant role and is not trade-off to one another. All of these are basic to marketing decisions and need to be considered and adjusted thoroughly so that they can in combination guide the appropriate marketing programme that will bring about desired consumer behaviour as well as returns.

The marketing mix paradigm has been popular and dominant in marketing literature and practice since 1950s. It takes into account the different forces from the environment which drive the marketers to produce diverse mixes in devising marketing strategies. The behaviour of customers, the trade, competitors and government make up these important forces (Borden, 1964). It is a simple and straightforward notion in which the ideas can be visualised through drawing a chart of the mix elements. The concept serves as a valuable teaching tool to aid the understanding of what marketing is. In fact, numerous marketing textbooks build up on this assumed-to-be indisputable model of marketing (McCarthy, 1960). It also provides a clear "checklist" of issues to be addressed and is thus useful for informing marketers on a variety of marketing questions so as to solve business problems. However, the exclusive focus on managing and studying the use of the mix may lead one to overlook the meaning and consequences of the marketing concepts. Marketers may also fail to genuinely explore the nature of the firm's market relationships so as to satisfy the needs and wants of the customers (Gronroos, 1994).

The marketing mix is essentially a controlled set of marketing variables which the marketers, or mixer of ingredients, manipulate so as to formulate policies to improve business results and optimize returns. Borden originally listed twelve elements of the mix whilst acknowledging that different lists can be employed by different people. The four Ps put forward by McCarthy (1960), and his advocates that contribute to the later prevailing marketing mix approach might be an oversimplified and overly-rigid perspective. It is debatable that how many elements should be included in the mix. It is hard for a fixed set to contain all the relevant variables to fit every possible situation. There have been several attempts by the researchers to include additional elements in order to better accommodate specific aspects of marketing. For example, while Kotler (1986) suggests public opinion and political power, Londre (2009) extends the elements to nine Ps, with the addition of planning, people, partners, presentation and passion. The marketing mix approach is said to lack precise specification of its underlying assumptions and rationale (van Waterschoot and Van den Bulte, 1992). The requirements to classify distinct elements into the mix are also not clear. Although the original approach is built largely on an empirical inductive root, connecting to microeconomic theory from the 1930s (Chamberlin, 1933); later the model evolves to have loosen this linkage with the theory. There is not an agreed objective way to establish the validity of the account.

The view also isolates the individual elements from the rest of the organizational actions, suggesting a separate marketing department carry out different marketing functions and responsibilities in accordance to the mix. It is argued that to truly cater to the needs and wants of the customers, there is a need to blend together the elements and other activities within the firm; financial in an incorporative and interactive manner (Kotler, 1991); production and mechanical services, for instance. Yet, there is an inadequate integrative dimension in the approach itself for this to take place. Further, relying on the marketing mix for a mass market may lead marketers to constantly deal with only the data from surveys and statistics, without really encountering the customers. This view therefore obstructs a marketer's effort to become genuinely market-oriented to appreciate the desires of the customers. As marketing following this inflexible account fails to fulfil the basic marketing concept to be innovative and adaptive to the interest of the customers, the usefulness of the approach is doubtful.

The marketing mix paradigm is put forward in the North America in1950s which reflects the marketing environment with certain infrastructure at that time (Gronroos, 1994). In particular, it involves a mass market with a great amount of consumer-packaged goods. In the current business world, individuals have become increasingly wealthy. There is also a rise in globalization and market fragmentation. This implies that businesses stretch out beyond local areas to a worldwide level with interdependence among themselves. The market has become more heterogeneous, with more vigorous competitions existing among the firms. Firms progressively focus on particular niche markets that serve their target customers with specific needs and requirements. As a result, mass marketing techniques as indicated by the conventional marketing mix approach appears to be gradually ineffective.

Transaction marketing based on the four Ps concerns about optimizing the efficiency and volume of individual sales. While this model views marketing from a product-oriented angle which may result in short-term, passive and reactive customer relationships; there is a growing emphasis on the interaction with different actors within the market (Clancy and Shulman, 1991). Some theories emerge in response to the criticisms of the traditional approach to address the strategic role of marketing, service marketing, interaction and relationship with the customers. In the marketing mix approach, the exchange between marketers and customers depends on the efforts of the former. The passive involvement of the latter is only limited to his/her response, influencing by individual preferences, organizational structure, etc. The network and interaction approach, on the other hand, proposes a reciprocal relationship between the marketers and customers through which exchanges take place (Johanson and Mattsson, 1988). The actions of every member and the way they interact have an effect on all the parties within the network. There is a much higher degree of interdependence between individual actors. It also considers the way in which individual relationship is connected to a wider network, taking into account both cooperation and competition. The very nature of network organization suggests that this paradigm may explain more sufficiently the continuous nature of relationships among different marketing actors. The development is also supported by evolving trends such as those seen in strategic partnerships, alliances and networks.

The concept of value-savvy customers leads firms to change from employing "make, tell, sell" to "listen, serve, customize" strategies so as to maximize the perceived value to the customers. Customers are seen to be more experienced in terms of their knowledge in marketing, more technologically-sophisticated, well-networked, active and demanding as well as seeking to take control of their personal information (Macdonald and Uncles, 2005). A key emerging concept amongst marketing research and practice is the customer-centric revolution. Consistent with the interaction and network perspective, marketing is increasingly seen as an interactive process within a social context. Thus, the building and management of relationships, and the retention of customers become the core of marketing activities. Marketing approaches to service derived from this relational-oriented view are seen to be essential to be integrated into management on the whole (Vargo and Lusch, 2004). Service marketing gains growing significance and comes forward as a separate area in marketing. As suggested by Gummesson (1995), customers do not buy goods or services, but fulfil their wants by the services which deliver values to them. This implies a shift in the focus from the product itself to customer satisfaction and creating the value in use. This may not necessarily be provided by the product itself, but other information-, knowledge- or social related aspects. From these developments, it is clear that the interactions customers have with other individuals, technology and other non-marketing functions contribute to a great amount of marketing success. The marketing mix thus serves simply to support these customer contacts which often involve activities that are actually beyond the mix itself.

As mentioned earlier, firms that adopt the marketing mix approach typically lack direct contact with their customers. The limited information about the customer base means that they evaluate their performance merely on marketing share figures. In contrast, customer-oriented approaches allow the measurement of marketing success through the knowledge gained from direct interactions with the customers, for example, customer satisfaction from surveys and feedback forums. This enables the firms to build up a large database that provides valuable information to management.

However, despite the criticisms, there is also evidence from research that the four Ps account can fit in the current marketing environment. At present, there is a rise of high-technology digital age with an increasing usage of computers and internet. "Conservatives" like Bhatt and Emdad (2001) believe that the marketing mix can still adapt to the environmental change by the internal transformation of each P. For example, they suggest that the addition of personalized information in product and price will improve the model's flexibility. The interactive nature of internet has led to the concept of 'virtual product' which can be personalized depending on individual preferences. Individuals can actively customize the products to suit their own taste (Dominici, 2008). Internet also enables customers to obtain information about product prices that can be compared across. Moreover, the notion of physical place is no longer appropriate. It provides a virtual forum that is capable of building relationship with the customers. Digital Customer Relationship Management can be used to monitor the customers through the data of registration and purchase as well as obtaining their opinion on satisfaction. Promotion can also be seen from a digital communication point of view. It involves flexible transmission of information from the advertising messages to the customers not only to sell the product, but also to create a purchase relation and a perception of trust in the customer.

To sum up, in examining the easy-to-use and straightforward marketing mix paradigm, this essay has first outlined the four Ps including product, price, place and promotion. Although this approach has long been dominant in marketing, the observations in the contemporary marketing environment, as well as its failure to take into account interactions and interdependence make obvious its rigidity and insufficiency as an account for marketing on its own. Marketing mix management is not likely to be a universal approach to marketing. Nevertheless, the marketing concept itself and the four Ps remain crucial to a firm's success. There has also not been a new widely- accepted approach to substitute the marketing mix. It is therefore not sensible to abandon the whole framework completely. Instead, modifications with some adjustments and extensions may be beneficial. As marketing is a multi-faceted social process, new perspectives such as one that focuses on network and customer relationship should be incorporated simultaneously in order to provide a fuller view of the whole picture.

However, what marketing deserves is new perspectives, which are more market-oriented and less manipulative, and where the customer indeed is the focal point as suggested by the marketing concept.

However, bearing in mind the long-term damages of the marketing mix as the universal truth, we are going to need several approaches or paradigms

A paradigm shift, as used by Thomas Kuhn..., occurs when a field's practitioners are not satisfied with the field's explanatory variables or breadth...What I think we are witnessing today is a movement away from a focus on exchange - in the narrow sense of transaction - and toward a focus on building value-laden relationships and marketing networks...We start thinking mostly about how to hold on to our existing customers...Our thinking therefore is moving from a marketing mix focus to a relationship focus".

from an academic or theoretical perspective, the relatively narrow conceptualization of marketing as a profit-maximization problem, focused on market transactions or series of transactions, seems increasingly out of touch with an emphasis on long-term customer relationships and the formation and management of strategic alliances"

There has been a significant movement away from thinking solely in terms of one player beating the competition toward thinking in terms of mutual interdependence and cooperation among all participants. The companies no longer run the game themselves, but rely on the suppliers, the customers and the employees working together. The object of the game is no longer to have only one winner, but rather to have a win-win team to beat the competition, which is the true victory.

An alternative to the transactional model, relationship marketing, emphasizes customer retention and future interaction with the company. There are advantages and disadvantages to both approaches. According to customer relationship management (CRM) expert Michael Lowenstein, because transactional marketing does not value customer retention, it can lead to "passive, reactive and short-term customer relationships." However, traditional elements of marketing such as those listed above will always be crucial to success.

The main disadvantage of the relationship-based model is its relative expense. However, fostering ongoing interaction with buyers through customer relationship management (CRM) strategies typically improves return on investment (ROI) in the long run. Most organizations include components of both approaches in their strategy.

http://www.londremarketing.com/documents/Nineps05122009.pdf

Suggests relationship marketing, based on relationship building and management, as one emerging new marketing paradigm of the future. Concludes that the simplicity of the marketing mix paradigm, with its Four P model, has become a strait-jacket, fostering toolbox thinking rather than an awareness that marketing is a multi-faceted social process, and notes that marketing theory and customers are the victims of today's mainstream marketing thinking.

Rasmussen[31] and Gosta Mickwitz[32] developed what became known as parameter theory, which was a dynamic marketing mix approach linked to the product life cycle and where the parameters were integrated by means of varying market elasticities. Moreover, Mickwitz also stated that the demand side has to be connected to the supply side in a managerial marketing theory. This was done using an economic approach rather than a behavioural approach. Parameter theory was a much more developed model than the Four P version of the marketing mix notion. Unfortunately, it never received enough international attention, and eventually it was overwhelmed by the Four Ps that were much easier to comprehend and teach. Today, the key aspects of parameter theory, dynamism and an integration of consumer behaviour and managerial decision making are pointed out as important research topics (cf.[3]).

The fact that a problem seemingly lying in one segment of the mix must be deliberated with constant thought regarding the effect of any change in that sector on the other areas of marketing operations. The necessity of integration in marketing thinking is ever present. the mix chart provides an ever ready checklist as to areas into which to guide thinking when considering marketing questions or dealing with marketing problems.

As the world has become more and more dynamic, blessed is that corporation which has managers who have foresight, who can study trends of all kinds — natural, economic, social, and technological — and, guided by these, devise long-range plans that give promise of keeping their corporations afloat and successful in the turbulent sea of market change. Accordingly, when we think of the marketing mix, we need to give particular heed today to devising a mix based on long-range planning that promises to fit the world of five or ten or more years hence. the ideas were reduced to a formal statement with an accompanying visual presentation, the concept of the mix has proved a helpful devise in teaching, in business problem solving, and, generally, as an aid to thinking about marketing. First of all, it is helpful in giving an answer to the question often raised as to "what is marketing?" A chart which shows the elements of the mix and the forces that bear on the mix helps to bring understanding of what marketing is. It helps to explain why in our dynamic world the thinking of management in all its functional areas must he oriented to the market.

Kotler, P., "Megamarketing", Harvard Business Review, 64, March-April, 1986, 117-24.

Nickels, William G. & Jolson, Marvin A. (1976) 'Packaging - The Fifth 'P' In The Marketing Mix', Advanced Management Journal, Winter, Vol. 41, Iss. 1, p.13.

Culliton, J. W. (1948), The Management of Marketing Costs, Graduate School of Business Administration, Boston, Mass: Harvard University.

McCarthy, J. (1960 1st ed.), Basic Marketing: A managerial approach, 13th ed., Irwin, Homewood Il, 2001.

Johanson, J.U., Mattsson, L.G. (1988), "Internationalisation in industrial systems: a network approach", in Hood, N., Vahlne, J.E. (Eds),Strategies in Global Competition, Croom Helm, New York, NY, pp.198-211.