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A double adapter for connecting only two electrical appliances to a power source can cost as much as R20. That's
expensive. The human brain, in contrast, allows billions of connections, with miniscule amounts of energy leaping
from one neuron to another. That's cheap.
Although the billions of mental connections we can make are both cheap and plentiful, when we buy brand ‘x'
instead of ‘y', it often boils down to only one or two ‘things'.
So, when product parity exists, an alien visitor would be most surprised to see a Homo sapien homexecutistravel
an extra 10 km to buy a tub of margarine for 10c less. Oh, the power of a single-minded positioning.
Kotler defines brand positioning as an act “of designing the company's offer and image so that it occupies a distinct
and valued place in the target customer's mind”.
Roughly translated from Nguni: “I am because you are, you are because we are,” or “A person is a person through
other people”.
The above introduces a crucial aspect of positioning – that it is relative. You cannot be avant-garde if you have
nothing to be avant about. Someone can only be old-fashioned relative to existing fashion. Covering the 100
meters in 10.5 secs at the Olympics is agonizingly slow, even though it is a feat few of us will achieve in our lives.
So, adding some African wisdom, we can adapt Kotler's definition to read:
Positioning is an act of designing the company's offer and image so that it occupies a distinct and valued place in
the target customer's mind, relative to other things.
That's why positioning is such a dynamic activity - we often reposition annually - simply because ‘other things'
change. There's no point testing a new car shape if the consumer is going to compare it to what they know now, as
opposed to what will be in the market then. Cameras today have to be positioned relative to cell phones, and the
tables takes in the latter category change dramatically month to month (you don't have polyphonic!?).
The challenge, however, is to make the positioning, as Kotler says, ‘distinct and valued'. Although the Coke/New
Coke debacle is well chronicled, Pepsi had their own positioning fiasco with Pepsi One. It was launched in 1998
with a first-year budget of $100 million, targeted at young men who did not like the taste of diet colas (the artificial
sweetener in Pepsi One was Ace-K, as opposed to the funny-tasting aspertame). The design team spent 37 000
hours designing a can, nowhere on which could be found a clear description of what was inside – diet cola. Pepsi's
Phil Marineau said it best: “Consumers did not understand why Pepsi One was different from other diet drinks”. It
certainly was a drink in a class of its own – and that was the problem.
Respondents to my column about the tenets of new strategic marketing by and large
projected the view that new strategic marketing, as propounded by the authors of the
new book, Marketing Moves: A New Approach to Profits, Growth and Renewal, by Philip
Kotler, Suvit Maesincee, and Dipak C. Jain (Harvard Business School Publishing, 2002) is
a fact in many organizations today. It can be summed up by the question, "What's new?"
Karl Hansen commented, "New Marketing is just another way to help people try to
understand and define the role of marketing." Lee Vargas-Bianchi added, "I do think we
need to advance...marketing concepts beyond the 4 Ps, but ultimately, didn't they imply
to a certain extent what the authors now mean by 'value'?"
Perhaps we should be encouraged that the ideas excerpted from Marketing Moves (always
at the risk of doing violence to the depth of the authors' arguments) raised so few eyebrows.
—James Heskett
What seems to many to be new is the Internet. Comments Thomas Rector, "...the 4 Ps
remain valid—even in the Internet age. ...'interactivity' provides the best opportunity to
fine-tune the positioning (and sometimes the tangible features) of the product." He
concurs with Balu Rajagopal who wrote, "The marketing 4 Ps are still a valid framework
but the Internet has added a new dimension—interactivity. ... If there is a case to be
made for a new '5P' framework then the fifth 'P' would be a 'Partner.' By 'Partner' I mean
both the customers (who help define the value) as well as the enabling partners (who
help in delivering the value)."
Perhaps we should be encouraged that the ideas excerpted from Marketing Moves
(always at the risk of doing violence to the depth of the authors' arguments) raised so
few eyebrows. Comments from readers of this column suggest that marketing has, in
practice, moved beyond the product development, promotion, pricing, and distribution
activities that defined the field five decades ago. Alternatively, the extent to which the
Internet cuts across organizational boundaries and fuses various functions of a firm
together (as well as a firm with its customers, suppliers, and partners) may suggest that
marketing as we knew it has become so identified with the development and
implementation of Internet-fueled strategies that it is losing its identify as a function.
What do you think?
Original Article
Who doesn't remember the basic lesson from Marketing 101, the four Ps—which I
don't even need to enumerate? They were based on concepts of a marketing mix
developed in the 1950s and popularized for marketing instructors by Jerry McCarthy in
1962. Now the three authors of the book Marketing Moves, Philip Kotler, Dipak Jain, and
Savit Maesincee, ask us to transform the thinking we explored in good old 101. The ideas
gain added impact because the team of authors is led by Kotler, perhaps the most widely
read marketing academic of the past three decades.
I basically agree to the premise that Internet has transformed the way we transact,
but whether it really impacts the way people purchase is a point in question.
— Praveen
HCL Technologies
Basically, we are asked to put aside the strategic marketing tenets of the past when
marketing was done by a marketing department and focused on the "interruption" of
customer buying behaviors, the need to acquire new customers, immediate transactions,
and the treatment of marketing costs as expenses. Instead we are asked to think of
marketing as the work of exploring, creating, and delivering customer value. This work
focuses on gaining the "permission" of customers to sell to them, customer retention and
loyalty, the capture of lifetime value, and marketing expenditures as investments.
Everything happens faster. And, among other things, product design is shifted from the
manufacturer to the customer.
Many of the examples that the authors cite are from the world of the Internet and e-
commerce. And yet, one can't help but ask the following questions: To what extent is the
"new" marketing new? How much of it would have evolved regardless of the emergence
of the Internet? And how has it really changed the life of marketing managers? What do
you think?
Reader Comments:
1. The marketing four Ps are still a valid framework but the Internet has added a
new dimension—interactivity.
The Internet has had a profound impact, more so in the area of market
intelligence than in any other. Before Internet technology touched the business-
computing environment, market intelligence gathering had an inherent latency
that marketers had to take into account in developing a "go-to-market" plan.
This latency affected not only the time to respond customer needs but also the
time to respond to competitive moves.
The Internet has helped reduce this latency by orders of magnitude. This has
allowed savvy marketers to not only respond to market conditions much sooner,
but also to collect market intelligence in new ways.
If there is a case to be made for a new "five P" framework then the fifth "P"
would be a "Partner." By "Partner" I mean both the customers (who help define
the value) as well as the enabling partners (who help in delivering the value).
Balu Rajagopal
VP of Marketing
Bossworks, Inc.
2. I basically agree to the premise that Internet has transformed the way we
transact, but whether it really impacts the way people purchase is a point in
question. Intrinsically, buying behavior is more of a culture-driven and
socioeconomic paradigm than simply a thought pattern that can be readily
altered.
The concept of a New Marketing that entails a premise of value creation for
customers is an old phenomenon—even our "Grand Uncle Ford" believed it when
he produced his famous Model T. Yet, as times change, I believe it is the change
in technology that really alters behavior patterns more than anything else. And a
new product reaches its optimum value proposition only when the market is
prepared for it. For example, 3GL was not accepted because no amount of
marketing could show value to customers in terms of accessing their TV sets
through mobile phones, especially in an economically battered Japan, which
otherwise led the world in terms of new product usage. Marketing managers can
really leverage the Net at best to create a more user-friendly transaction
mechanism.
Praveen
Manager Quality
HCL Technologies
There are many cases in the e-business but one of the most significant examples
of this New Marketing is construction marketing. The design is the responsibility
of the customer, the product is unique, the value is essential for the customer
and the business developer of the construction company are the key to achieve
and gain news clients many months and years before the investment decision.
Dinis Silva
Marketing Manager
Edifer Group (Portuguese Construction Group)
Lee Vargas-Bianchi
Second, the customer is telling you that they want to hear from you. What other
market niche gives you "permission" to speak to your customer? If anything, it
allows you to simply say thank you.
Third, it gives the restaurant the opportunity to reward loyalty anytime without
the burden of coordinating a direct mail, radio, or TV campaign.
Michael Fischer
Media Consultant
7. "New Marketing" is just another nice term to use but really doesn't help. One
size terminology does not apply to all of marketing.
For an information appliance you could compare its function to that of a daily
planner. Everyone enters names, addresses, and their schedule. The marketing
problem is that the value of "syncing" your PDA is not as obvious as getting a
burger made to order. The value of having to learn to write in "graffiti" compared
to your own freestyle manner inhibits consumers' perception of the value. This of
course is not even considering a price tag of hundreds of dollars compared to the
cheapest daily planner, which can be found for under ten bucks.
Exploring, creating and delivering customer value are not nice-to-haves but
have-to-haves. You cannot stop there. Don't underestimate the difficulties of new
product introduction without considering all of the variables, of which consumer
behavior is most important.
Maybe the year 2003 will become the year to focus on consumer behavior.
Hopefully not as a new marketing flavor of the day, but a real transition to
understanding consumer adoption behavior in order to calculate better forecasts
of both products and services. A leading consultant said only too recently "build it
and they will come if it is a good, solid product." I think we have seen a number
of good products sit on the shelf—all because someone underestimated what it
would take to change a current pattern of behavior in order to sell the latest
gadget.
9. The basic issue is the lack of understanding of the role of marketing in most
companies and organizations. People at all levels of the organization do not
understand the role or roles that marketing professionals serve in the
organization. So many times marketing is limited to making things look good and
sales support functions. This is but one of the many roles marketing plays in an
organization.
The Internet has made people rethink the role of marketing as new ideas,
technologies, and channels to communicate to customers have developed.
Marketing fills the role of collecting information and identifying the highest and
best use for the organization to attack the market or maintain market share.
Marketing's role is the four Ps: Product, Price, Promotion, and Place. The sales
role is volume and customer relationships. It is when the roles are not clearly
identified and defined in an organization that we seek new definitions on what
marketing is and how it should be measured. If marketing is not involved in the
business at many different levels and departments, the role of marketing in the
organization is not defined, and then Marketing has to justify its role on a day-to-
day basis within the organization.
Marketing is a difficult concept to define but when the role and mission are
clearly defined strong brands, sales, information, positioning, new product
innovation, and leading organizations are created.
New Marketing is just another way to help people try to understand and define
the role of marketing.
10. Waffle, waffle, waffle. I am so tired of all this marketing propaganda.
We threw out our television because of it and are trying to pare down our lives to
a Socratic minimum. After wasting thousands on clothes over the past ten years,
I've finally taught myself to sew and can now whip up a linen skirt for about $10
(in an hour), instead of working for two to pay for it. I'm also teaching three
friends who are also tired of cheap junk being sold to us as "fashion." We're also
making our own skin/hair products but are in no way "hippies" or "alternative
types." You would have us work like slaves to buy rubbish and I think the
American middle class is starting to turn against you. Your business and
psychology degrees have only turned you into verbose peddlers of trash and you
ought to be ashamed of yourselves for not doing something more worthwhile
with your minds and your "fine" educations.
Anonymous
11. The short article does not give me enough insight into their full theory,
but in my mind the four Ps remain valid—even in the Internet age. "Place" can
still be identified, the combination of "Price" and "Promotion" creates "Customer
Value," an evolved method of discussing this same concept. Identifying the
customer remains the most difficult and elusive issue, and as was identified by
Mr. Rajagopal's comment, "interactivity" provides the best opportunity to fine-
tune the positioning (and sometimes the tangible features) of the product.
Long before the four Ps became popular, Mahatma Gandhi, the Indian leader who
led the struggle for Indian independence, emphasized that an organization owed
its existence to the customer. Gandhi was neither a management expert nor a
businessman. The venerable Peter Drucker has outlined the only relevant
purpose for a business as "to create a satisfied customer." The value creation
process, sought to be popularized by Kotler et al, has its roots in the seminal
work of Michael Porter in the 1980s and in his concepts of the Value Chain and
the Value System.
And yet, the fascination for new words and phrases, accompanied by carefully
chosen examples, continues. Thus, value engineering of the 1920s has become
business process reengineering in the 1990s. The simple concept of retrenchment
has spawned over twenty-five alternate terms including downsizing, rightsizing
and de-employment. The value system so beautifully developed by Porter has
given birth to two esoteric disciplines—SCM and CRM. And thanks to the Internet,
we now have eCRM too.
Where are we heading? What does this mindless explosion of terms and phrases
mean to academics, students, and managers?
One cannot help agreeing with Lawrence Peter: "Progress is our ability to
complicate the simple."
Once you decide on a viable business, spend all the necessary time on the one
concept to reap the full potential of the profit from that business.
I often see clients take a product or idea and attempt to market it to the best of
their knowledge. They break even or make a small profit only to drop the idea or
product hoping they will find a way to make bigger profits. This is a mistake. You
want to tap into the idea to its full potential. When you find something that
breaks even or makes a small profit, why not refine it so it becomes really
profitable?
14. I don't believe that the "new marketing is new." Focusing on the
customer, doing what you say you will do, developing long-term loyal customers,
is what marketing and business is all about, this has not changed. Granted the
Internet is changing the way marketing is done but not the reasons. Good
marketing has always been customer centered and successful businesses will
utilize new technology to service the customer better and faster.
The Internet has increased the speed of all aspects of business not just
marketing. Technology will continue to do that, but the great companies will still
focus on the customer.
15. The effective practice of marketing has always been a reflection of the
way a society works. In a time where societies are changing at an unprecedented
pace, driven by the globalization of capital, information, and resources, the
paradox is that individuals are becoming isolated. The human being is a herd
animal, and the rise of digital technology is reducing our capacity to relate to
others in a herd.
Allen Roberts
General Manager
Agri Chain Solutions Ltd
16. There is no big answer. The new marketing is driven by the "1 N"—
and that is NEED. I am talking about the needs of the customer in the new driven
economy, however you name it: Internet, globalization, etc.
17. I know it sounds a bit trite but there is nothing new about this
marketing...really. If you look at some long-standing retail traditions, the
principles have been there all along.
The new tool of the Internet has simply created a customer environment in which
all experiences have pressure on them to become consumer-like retail
experiences. Because Internet technologies have leveled the playing field in
terms of information, the point of differentiation has become the service and the
brand values that "wrap" the vendor's products and/or services. At least for
those privileged enough to have access to the Internet.
Matthew Childs
Director
eBrands
Marketing mix
From Wikipedia, the free encyclopedia
Marketing
Key concepts
Product • Pricing
Brand management
Account-based marketing
Marketing ethics
Marketing effectiveness
Market research
Market segmentation
Marketing strategy
Marketing management
Market dominance
Promotional content
Advertising • Branding • Underwriting
Promotional media
Printing • Publication
Broadcasting • Out-of-home
Promotional merchandise
Digital marketing • In-game
In-store demonstration
Word-of-mouth marketing
The term "marketing mix" was coined in 1953 by Neil Borden in his American
Marketing Association presidential address. However, this was actually a
reformulation of an earlier idea by his associate, James Culliton, who in 1948
described the role of the marketing manager as a "mixer of ingredients", 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.[1] A
prominent marketer, E. Jerome McCarthy, proposed a Four P classification in 1960,
which has seen wide use.
Contents
[hide]
• 1 Four P's
• 4 Four Cs (2)
• 5 References
• 6 External links
[edit]Four P's
Elements of the marketing mix are often referred to as the "Four P's":
Price – The price is the amount a customer pays for the product. The
business may increase or decrease the price of product if other stores have the
same product.
Place – Place represents the location where a product can be purchased. It is
often referred to as the distribution channel. It can include any physical store as
well as virtual stores on the Internet.
Promotion represents all of the communications that a marketer may use in
the marketplace. Promotion has four distinct elements:advertising, public
relations, personal selling and sales promotion. A certain amount of crossover
occurs when promotion uses the four principal elements together, which is
common in film promotion. Advertising covers any communication that is paid for,
from cinema commercials, radio and Internet adverts through print media and
billboards. Public relations are 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).
Any organization, before introducing its products or services into the market;
conducts a market survey. The sequence of all 'P's as above is very much important
in every stage of product life cycle Introduction, Growth, Maturity and Decline.
People: All people involved with consumption of a service are important. For
example workers, management, consumers etc. It also defines the market
segmentation, mainly demographic segmentation. It addresses particular class of
people for whom the product or service is made available.
Process: Procedure, mechanism and flow of activities by which services are
used. Also the 'Procedure' how the product will reach the end user.
Physical Evidence: The marketing strategy should include effectively
communicating their satisfaction to potential customers.
This system is basically the four Ps [4] renamed and reworded to provide a customer
focus. The four Cs Model provides a demand/customercentric version alternative to
the well-known four Ps supply side model (product, price, place, promotion) of
marketing management.The Four Cs model is more consumer-oriented and attempts
to better fit the movement from mass marketing to symbiotic marketing.
The factors related to customers can be explained by the first character of four
directions marked on the compass model: N = Needs, W = Wants, S = Security and
E = Education (consumer education).
[edit]Four Cs (2)
Robert F. Lauterborn proposed a four Cs(2) classification in 1993.[5] The Four Cs
model is more consumer-oriented and attempts to better fit the movement from mass
marketing to niche marketing. The Product part of the Four Ps model is replaced
by Consumer or Consumer Models, shifting the focus to satisfying the consumer
needs. Another C replacement for Product is Capable. By defining offerings as
individual capabilities that when combined and focused to a specific industry, creates
a custom solution rather than pigeon-holing a customer into a product. Pricing is
replaced by Cost reflecting 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. Placement is replaced by Convenience. 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. Finally, the Promotions feature is replaced
by Communication which represents a broader focus than simply Promotions.
Communications can include advertising, public relations, personal selling, viral
advertising, and any form of communication between the firm and the consumer.
[edit]