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Marketing mix is a business tool used in marketing and by marketers. The marketing mix is often crucial when determining a product or brand's offer, and is often associated with the four Ps: product, price, promotion, and place. In service marketing, however, the four Ps are expanded to the seven Ps: process, people, physical environment  or Seven Ps to address the different nature of services.
In the 1990s, the concept of four C's was introduced as a more customer-driven replacement of the four P's. There are two theories based on four Cs: Lauterborn's four Cs (consumer, cost, communication, convenience), and Shimizu's four Cs (commodity, cost, communication, channel).
In 2012, a new four P's theory was proposed with people, processes, programs, and performance.
McCarthy's four Ps (1960, MTG 1.0 )
|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 fall. 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 moves.
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 to 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.
After web 2.0, the capacity of the customers to discuss products that they have bought, making reviews and testimonials related to their experiences, are examples of public relations, as well. This kind of behavior takes the dissemination of the product information over the internet space and creates the phenomenon known as word-of-mouth.Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create grassroots 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 last P is place, the distribution channel which is the location where the delivery the value. The role of the marketing channels is not only focus on the participate in demand satisfaction by offering goods, but also need to stimulate demand through information, creating proximity and promotion by customer (Balasecu, 2014). In other words, distribution channels for the product is a system process. Generally, majority of the product need a retail shop. But place also can be a telephone call center or a website.|
The "seven Ps" is a marketing model that adds to the aforementioned four Ps, including "physical evidence", "people", and "process": It is used when the relevant product is a service, not merely a physical good.
|Physical evidence||The evidence which shows that a service was performed, such as the delivery packaging for the item delivered by a delivery service, or a scar left by a surgeon. This reminds or reassures the consumer that the service took place, positively or negatively.|
|People||The employees that execute the service, chiefly concerning the manner and skill in which they do so.|
|Process||The processes and systems within the organization that affect the execution of its service, such as job queuing or query handling.|
Lauterborn's four Cs (1990, MTG 2.0)
Robert F. Lauterborn proposed a four Cs classification in 1990. His classification is a more consumer-orientated 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 customers 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, catalogues, credit cards and phones people neither need to go anywhere 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.|
Shimizu's Four Cs: in the 7Cs Compass Model (1973-, 2010 MTG 3.0)
After Koichi Shimizu proposed a four Cs classification in 1973, it was expanded to the 7Cs Compass Model to provide a more complete picture of the nature of marketing in 1979. The ７Cs Compass Model is a framework of Co-marketing (Commensal marketing or Symbiotic marketing). Also the Co-creative marketing of a company and consumers are contained in the co-marketing. Co-marketing (Collaborate marketing) is a marketing practice where two companies cooperate with separate distribution channels, sometimes including profit sharing. It is frequently confused with co-promotion. Also Commensal (symbiotic) marketing is a marketing on which both corporation and a corporation, a corporation and a consumer, country and a country, human and nature can live.
- The 7Cs Compass Model comprises:
(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 7Cs 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 (narrow)||"C" category (broad)||"C" definition|
|Product||(C2) Commodity||(Latin derivation: commodus=convenient) : Co-creation.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 starting.|
|Price||(C3) Cost||(Latin derivation: constare= It makes sacrifices) : There is not only producing cost and selling cost but purchasing cost and social cost.|
|Promotion||(C4) Communication||(Latin derivation: 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, internal communication, SNS, MIS.|
|Place||(C5) Channel||(Latin derivation: 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 7Cs 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.
E. Jerome McCarthy
Since the first propose of marketing mix of 12 marketing variables by Neil H. Borden, the marketing mix have developed in 1960s. The idea of marketing mix was widely used to help with a business. A business can succeed with carry out all these process properly of marketing mix.
However, it is difficult to a company use 12 marketing variables propose by Mr. Borden. So that E. Jerome McCarthy developed the marketing mix into "4Ps". The 4Ps model is known as price, place, promotion and product.
Product can be the "quality, features, benefits, style, design, branding, packaging, services, warranties, guarantees, life cycles, investments and returns".
Product: this is what the business offers a product or service to the customers. Each of the company want their product appeal to everybody even through some kind of product only appeal to a special group of customers. And all the companies are trying to maximize the customer group that can benefit from their products.
Price can be "list pricing, discount pricing, special offer pricing, credit payment or credit terms".
Price: price is the total cost to customer to assume the product, but it is not the cash payment from the business to the supplier. This costs also included learning how to use the product and the peripheral costs. Not only the raw material included, and also the machining costs by workers, transports costs.
Place can be the "direct or indirect channels to market, geographical distribution, territorial coverage, retail outlet, market location, catalogues, inventory, logistics and order fulfilment".
Place: place is the location where a business doing their business. It can be a retail store in a most original way. But nowadays it can mean "a mail order catalogue, a telephone call centre or a website ". As the development of business, e-business is become more and more popular, and this is exactly the reason why website is treated as a location now.
Promotion can be the "advertising, external communications with the media, direct selling and sales promotions".
Promotion: "Promotion is the marketing communication used to make the offer known to potential customers and persuade them to investigate it further ". In terms of promotion can be propose to promotion mix, which is advertising, public relations, sales promotion and personal selling.
The 4Ps of marketing mix which is helpful to the business, and businesses are attempting to find a balance in these 4Ps process to approach the success. And the marketing mix is helpful to the business to simplify the present marketing conditions, and then make the adjustment appropriate.
Booms and Bitner
Booms and Bitner are responsible for the creation of the extended marketing mix, featuring 7P's. E. Jerome McCarthy's original 4P's of product, price, promotion, and place are now joined by people, process and physical evidence.
People are essential in the marketing of any product or service. In the professional, financial or hospitality service industry, people are not producers, but rather the products themselves. When people are the product, they impact public perception of an organization as much as any tangible consumer goods. From a marketing management perspective, it is important to ensure that employees represent the company in alignment with broader messaging strategies. This is easier to ensure when people feel as though they have been treated fairly and earn wages sufficient enough to support their daily lives.
Process refers a "the set of activities that results in delivery of the product benefits". A process could be a sequential order of tasks that an employee undertakes as a part of their job. It can represent sequential steps taken by a number of various employees while attempting to complete a task. Some people are responsible for managing multiple processes at once. For example, a restaurant manager should monitor the performance of employees, ensuring that processes are followed. (S)he is also expected to supervise while customers are promptly greeted, seated, fed, and led out so that the next customer can begin this process.
Physical evidence is the lasting proof that the service has happened. In terms of buying a physical product, the physical evidence is the product itself. According to Booms and Bitner's framework, "physical evidence is the service is delivered and any tangible goods that facilitate the performance and communication of the service. Physical evidence is important to customers because the tangible goods are evidence that the seller has (or has not) provided what the customer was expecting . The more inviting the physical environment that surrounds a product when it is sold, the more people are willing to pay for said good or service. Anyone who does not understand how important the physical environment is in business, need only to compare the price of a 4-star and a 2-star hotel.
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