Marketing mix: Kotler on marketing

 

Marketing mix describes the set of tools that management can use to influence sales. The traditional formulation is called the 4Ps— product, price, place, and promotion.

From the very beginning questions were raised about the 4P formulation of the marketing mix.

• Perfume companies wanted packaging to be added as a fifth P. 4P guardians said that packaging is already in the scheme, under product.
• Sales managers asked whether the sales force was left out because it began with an S. No, said the guardians, sales force is a promotion tool, along with advertising, sales promotion, public relations, and direct marketing.
• Service managers asked where services were in the marketing mix, or whether they, too, were excluded because the first letter was S. Here the guardians said services are part of the product. As services grew more important, service marketers suggested adding three Ps to the original 4Ps, namelypersonnel,procedures, andphysical evidence. Thus a restaurant’s performance will depend on its staff, the process by which it serves food (buffet, fast food, tablecloths, etc.), and its physical looks and features as a restaurant.
• Others suggested addingpersonalizationto the marketing mix. The marketer has to decide how personalized to make the product, the price, the place, and the promotion.
• In my own case, I suggested adding politics and public relations to the 4Ps, because these can also influence a company’s ability to sell.
• At one time, I had also proposed escaping from the prison of the letter P by redefining the essential function of each P:

	Product	=	Configuration
	Price	=	Valuation
	Place	=	Facilitation
	Promotion	=	Symbolization

 

 

 A more basic criticism has been that the 4Ps represent the seller’s mind-set, not the buyer’s mind-set. Robert Lauterborn suggested that sellers should first work with 4Cs before setting the 4Ps.¹The 4Cs are customer value (not product), customer costs (not price alone), convenience (not place), and communication (not promotion). Once the marketer thinks through the 4Cs for the target customer, it becomes much easier to set the 4Ps.

The Ps can substitute for each other in driving sales. A car dealer sold cars with 10 salespeople and normal markups. His sales were poor. Then he cut his staff to five salespeople and lowered his car prices significantly. He did a land-office business. Similarly, Jeff Bezos, CEO of Amazon, reduced his advertising expenditures and lowered his book prices, and Amazon’s sales shot up significantly.
Setting the 4Ps is difficult because of their interactions. Take product and place:

• Suppose product is 0 and place is 1. How much is 0× 1? Answer = 0.
• Suppose product is 1 and place is 0. How much is 1× 0? Answer = 0.
• Suppose product is 1 and place is 1. How much is 1× 1? Answer = 3.

 

One selects marketing tools that are appropriate to the stage of theproduct’s life cycle. For example, advertising and publicity will produce the biggest payoff in the introduction stage of a product; their job is to build consumer awareness and interest. Sales promotions and personal selling grow more important during a product’s maturity stage. Personal selling can strengthen customers’ comprehension of your product’s advantages and their conviction that the offering is worthwhile. Sales promotions are most effective for triggering purchases today. In the decline stage, the company should keep pushing sales promotions but reduce advertising, publicity, and personal selling.

The marketing vice president of a major European airline wanted to increase the airline’s traffic share. His strategy was to build up customer satisfaction through providing better food, cleaner cabins, better trained cabin crews, and lower fares. Yet he had no authority in these matters. The catering department chose food that kept down food costs; the maintenance department used cleaning services that kept down cleaning costs; the human resources department hired flight crew people without regard to whether they were naturally friendly; the finance department set the fares. Because these departments generally took a cost or production point of view, the vice president of marketing was stymied in creating an integrated marketing mix.

 

The choice of tools is also influenced by company size. Market leaders can afford more advertising and use sales promotion more sparingly. Smaller competitors, in contrast, use sales promotion more aggressively.

Consumer marketers tend to emphasize advertising over personal selling, and business marketers do the reverse. But both tools are required in both types of markets. Consumer marketers who emphasizepush strategiesneed their sales force to convince retailers or dealers to carry, promote, and sell the company’s product to end users. By contrast, consumer marketers who emphasizepull strategiesrely heavily on advertising and consumer promotions to draw customers into stores.

For marketing to work, you must manage the marketing mix in an integrated fashion. Yet in many companies, responsibility for different elements of the marketing mix is in the hands of different individuals or departments.
 

Copyright© 2003 by Philip Kotler. All rights reserved. Published by John Wiley& Sons., Hoboken, New Jersey
http://www.wiley.com/WileyCDA/WileyTitle/productCd-0471268674.html
 

 

References

1. Lauterborn, R. (1990). New marketing litany: 4P’s passé; c-words take over.Advertising Age, (October 1), p. 26. 

Tags: market-strategies