Critically discuss an established marketing theory Essay
Critically discuss an established marketing theory
Customer expectations are increasing because of the increasing choices from a wider range of consumption. Nowadays, customers do not just buy clothes from a boutique, but also large retail stores, web stores or even mobile phone shopping apps. Claes Fornell International states, “the multiple channel models focus on providing information, purchase or fulfillment orders, after-sale servicing and technical support” (CFI Group, 2006). There are many considerations that customers may make when they repurchase: Past experience, convenience, service, price, product features, company image, and the recommendations of others. These considerations are determined by the way that companies integrate initial purchases and problem resolution in a multi-channel environment.
Marketing mix originally had 12 elements which were defined by Broden (1965). Thy are product planning, pricing, branding, channels distribution, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. McCarthy (1964) afterwards redefined the marketing mix based on the idea of Borden. He combined Borden’s 12 marketing mix elements to the four new elements: product, price, place and promotion, also called the 4Ps. McCarthy suggested they are combination of all of the factors at a marketing manager’s command to satisfy the target market.
Therefore, the 4Ps concept is now the most common way in defining marketing mix. It is something that companies need to consider in order to market a product or service, they also provide a guideline for the companies to achieve a successful marketing campaign. The 4Ps are designed to analysis the needs and wants of customers, in order to satisfy them and therefore attract more customers and sales. Each element of the 4Ps plays an important role in fulfilling the satisfaction of customers and these roles change with the changing environment of the marketplace. This essay will be covering the concept of 4Ps and also how this concept is applied in the current multi-channel marketplace.
The first p Product is the most important thing in an organization. Baines,
Fill and Page (2011) define “Anything that can be offered for use and consumption, in exchange for money or some other form of value, is referred to as a product”. It might be tangible or intangible. As mentioned in the first paragraph, customers think a lot before they purchase, they do not just buy a product for the function of a product, but many other elements as well. So, product can be divided into 3 different forms in order to understand the elements, which are core, embodied and the augmented forms. Core product consists of the benefit or satisfaction that a customer expects from purchasing a product or service. The benefit can be in terms of either functional or emotional. Embodied product takes account into the physical benefit of a product such as the features, durability, design, packaging and brand name. Augmented product consists of the embodied product and also the other factors affecting the purchase activity.
The second p is price. It is described as the amount a customer pays in exchange for goods and services. This is another crucial thing to a company, as price determines the money it earns through setting the prices of products. Companies have different pricing strategies in order to satisfy their target customers, setting a price for a product is difficult to a company. If the price is too high customers may not be able or willing to purchase whereas a very low price may make the customers think that the product are in very low quality therefore refuse to purchase. How should price be set depends heavily on the product itself and this relates to the expectations of the customers about the product. Not only the quality of the product but also other factors such as features of the product, the packaging and some other psychosocial expectations determine the price of a product.
Place is the next p, it can also be called distribution. Baines, Fill and Page (2011) define this “Place or distribution concerns how to place the optimum amount of goods and/or services before the maximum number of a target market at the times and locations they want.” It focuses on the availability of the product at the desired place and time. Places can be in many kinds such as physical stores like departmental stores and supermarkets. It can also be in virtual form such as e-malls and e-market. “Distribution activities are vital element in creating customer value. A product will provide customer value and satisfaction only if it is available to the customer when and where it is needed, and in the appropriate quality” (Douglas, James, and Ellram, 1998). The delivery of a product is important as it affects customer’s satisfaction and the evaluations over the quality of the service. Therefore companies need to think and manage well enough of the ways of distributing their products or services and here are some crucial factors of delivering goods: speed of the delivery, availability, range of choices, level of convenience and also after sale services.
Lastly is promotion, it is also called marketing communication. Baines, Fill and Page (2011) state, “It is used to communicate elements of an organization’s offering to a target audience. This offer might refer to a product, a service, or the organization itself as it tries to build its reputation.” There are four promoting methods that companies commonly use, which are advertising, public relation, sales promotion and personal selling. Also today, promoting through Internet is the most popular way as it is cheap and effective, with the rapid development in technology and the increasing amount of access to the Internet. Since the purpose of promotion is to increase customers’ awareness to a product, companies usually begin to promote before a particular product is actually launched into the market. However, the volume of promotion depends on the finance of a company. A company with cash flow or other financial problems may find it difficult to implement promotion activities due to costs.
The marketing mix 4Ps models seem to be a very effective marketing strategy as it gives guidelines to companies of how to market a product or service. However many studies have criticised the 4ps concept as not being customer oriented. Today’s marketplace is customer oriented, companies should do everything in the favor of customers. Therefore, the original 4Ps marketing mix model defined by E McCarthy that is claimed to be product-oriented should be adjusted.
Lauterborn (1990) suggests that the 4ps elements should be considered in the customer’s perspective, through converting the 4Ps to 4Cs, which is from product to customer solution, price to cost of customer, place to convenience, and promotion to communication. Möller (2006) criticised the 4Ps marketing mix in 4 areas: Internal orientation, lack of consumer interactivity, void of theoretical content and does not offer help for personification of marketing activities. The mix does not take into account the element of service marketing, it also ignores the relationship building with the customers. The idea of the marketing mix has implied the central element as marketers but this is not correct. ‘Customer-focused management’ should be the core of marketing.
So nowadays in the marketplace, companies focus heavily on the ways of engaging with customers, by offering good customer services and provide the best buying experience to the customers. It is no longer just focus on the product itself. Apple’s product like iphone and Macbook are designed fashionable together with newest technology and good functions. However the company also pays huge effort in serving the customers, the features and functions of the product are not the only concerns. Well-designed Apple stores and massive amount of staff in each store provide a good atmosphere for the customers when they are making purchases. This provides memorable buying experience to the customers and therefore huge amount of sales can be generated.
In the side of promotion, companies no longer promote their products by emphasising the features of the product but to engage with the customers. Many organisations use social network sites such as Facebook and Twitter as their promotion platform. Pages are created and the purpose of that is to interact with the customers. They tend to build relationships with customers through updating company’s status frequently and also observation from the customers’ activities. The TV adverts of the iphone now focus more on how it gets involved in customers’ daily life. It does not just mention the functions of the phone but highlight the way that iphone improves our life.
Besides, there are also significant changes of the distribution of products under the multi-channel market place. More customers now make their purchase online instead of in store. This is because of the rapid development of technology and the increased popularity of online shopping, and it is convenience as well. This change has caused huge impact on the retailing industry. Increasing numbers of customers download movies and songs from the Internet or iTunes Store, this made companies such as Blockbuster and HMV suffers, causing them to close stores and cut the number of staff.
The use of marketing mix of a company depends on many factors, such as the finance of the company, the resources available and also the changing condition of the market and customer’s wants. The 4Ps are closely related, one change of one of the Ps has direct effect on the others. Companies need to pay huge attention to the current market with rapid changes, in order to make adjustments to their marketing mix. The 4Ps marketing mix, has been criticised by different studies in terms of its limitations to the current consumer-oriented market. However, despite the limitations, this concept still remains strong because of its simplicity. The majority of the marketing textbooks still define marketing mix with the component of the 4Ps.
Companies still manage their marketing mix on the basis of this concept, perhaps with little variations according to the market condition. It is better for people to learn the 4Ps concept of marketing mix even though the concept might not fit into today’s marketplace, as it is relevant and it provides a clear guideline. Although there are many new marketing approaches and frameworks that have been suggested by different studies, these findings still cannot be agreed in the real business life as they are just raised theoretically but not empirically. This is because there is still a lack of data about how practitioners make use of the marketing mix to tackle the marketing problems, there is also a lack of effects of the 4Ps components on the success or failure of marketing programmes (E. Constantinides 2006). However, it is still preferable for the companies to consider improving the limitations of the 4Ps framework by taking account into the other suggested approaches that are focusing more on the customer side, given that the frequently changing of the customer behavior and wants.
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