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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 offer, 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. 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).
In his paper "The Concept of the Marketing Mix", Neil Borden reconstructed the history of the term "marketing mix".  He started teaching the term after an associate, James Culliton, described the role of the marketing manager in 1948 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.
McCarthy's Four Ps
|Product||A product is seen as an item that satisfies what a consumer demands. It is a tangible good or an intangible service.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.
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 move.
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.
|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.
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.
|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, sales organisation and sales promotion.
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).
|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.|
The seven Ps is an additional marketing model that refers to the already mentioned four Ps, plus 'Physical evidence', 'People', and 'Process':
|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.
Lauterborn's Four Cs
Robert F. Lauterborn proposed a four Cs classification in 1990 which is a more consumer-oriented version of the four Ps that attempts to better fit the movement from mass marketing to niche marketing:
|Four Ps||Four Cs||Definition|
Consumer wants and needs
|A company will only sell what the consumer specifically wants to buy. So, marketers should study consumer wants and needs in order to attract them one by one with something he/she wants to purchase.|
|Price is only a part of the total cost to satisfy a want or a need. The total cost will consider for example the cost of time in acquiring a good or a service, a cost of conscience by consuming that or even a cost of guilt "for not treating the kids". It reflects 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.|
|While promotion is "manipulative" and from the seller, communication is "cooperative" and from the buyer with the aim to create a dialogue with the potential costumers based on their needs and lifestyles. It 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.|
|In the era of Internet, catalogs, credit cards and phones people neither need to go anyplace to satisfy a want or a need nor are limited to a few places to satisfy them. Marketers should know how the target market prefers to buy, how to be there and be ubiquitous, in order to guarantee convenience to buy. 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.
The Seven Cs Compass Model are:
- (C1)Corporation – The core of four Cs is corporation ( company and non profit organization). C-O-S (Organization, Competitor, Stakeholder) within the Corporation. The company has to think of compliance and accountability as important. The competition in the areas in which the company competes with other firms in its industry.
The four elements in the Seven Cs Compass Model are:
- A formal approach to this customer-focused marketing mix is known as Four Cs (Commodity, Cost, Communication, Channel) in “the Seven Cs Compass Model. The four Cs Model provides a demand/customer centric version alternative to the well-known four Ps supply side model (product, price, promotion, place) of marketing management.
|"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:Communis=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:
- (C7)Circumstances – (Needle of compass to Circumstances )
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.
An alternative approach has been suggested in a book called 'Service 7' by Australian Author, Peter Bowman. Bowman suggests a values based approach to service marketing activities. Bowman suggests implementing seven service marketing principles which include value, business development, reputation, customer service and service design. Service 7 has been widely distributed within Australia.
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|url=missing title (help). Retrieved 2010-11-12.
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- Brian Solis(2011) Engage!: The Complete Guide for Brands and Businesses to Build, Cultivate, and Measure Success in the New Web, John Wiley & Sons, Inc. pp.201-202.
- E. Jerome McCarthy (1975)”Basic Marketing: A Managerial Approach," fifth edition, Richard D. Irwin, Inc., p.37.
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- Marketing Mix (bitesize 4P's), British Broadcasting Corporation (BBC) Schools
- Professor Koichi Shimizu's 7 Cs Compass model (1979)
- Four P’s, Four C’s And The Consumer Revolution
- , Service 7 Transform the way you think about marketing your service business