You probably know that the department responsible for the marketing mix at the enterprise is involved in the preparation of organizational plans for the production and marketing of products for the future of a strategic and operational nature. Actually, this complex will become the main topic of the article.
Definition of marketing
First, let us give a scientific definition of the concept of "marketing". Marketing is a multicomponent system for approving the structure of production and further marketing of products (both the sale of goods and the provision of services), which is based on satisfying consumer demand by anticipating the preferences of potential buyers. Enterprises today are developing in rather difficult conditions of a market economy. It is only natural that the market defines a whole range of tasks and questions that companies need to find the answer to.
The main issues of a market economy for manufacturers are the following:
- What and how to produce?
- How many products do you need to produce?
- How to effectively organize intra-organizational planning and management of the production process?
- Who will buy the manufactured products?
- What is the most effective way to survive in a competitive market environment?
- How to develop a better way to distribute goods between potential buyers?
If you do not like scientific definitions, just remember these questions, because in essence marketing answers them specifically.
The organization’s plans mentioned above include forecasts for future market conditions, short- and medium-term goals of the enterprise. In addition, the plans include the development of a marketing mix (a kind of PR company): a behavior strategy and tactics of an enterprise’s actions in a market, its price, product orientation and marketing policy, as well as an advertising or communication course of action.
Definition of a marketing complex
The marketing mix is the totality of controllable inconsistent marketing factors that are used primarily to ensure interest and positive feedback from the target market audience.
Otherwise, this complex is called marketing-mix. The marketing function of the "mix" is to form a set of elements of the marketing mix. A complex that not only satisfies the needs of the target audience of potential consumers, but also maximizes the effectiveness of the organization.
"Marketing mix" is mainly used to solve the tasks set in the marketing policy of a certain economic subject on a specific market segment during the development of the complex.
A Brief History of the Marketing Complex
The first attempts to systematize disparate marketing tools were made in the middle of the last century. The term "marketing mix" appeared in an article by J. Calliton. It seemed that the author decided to develop some recipe for the effective solution of marketing problems.
Albert Frey was the first to express the idea that marketing variables must be divided into two main groups:
- make up an offer (brand, packaging, price, product, service);
- form methods and means (advertising, distribution channels, PR, sales promotion, personal sales).
The 4P model, which has become a classic of marketing, was proposed by the American Jerry McCarthy in 1964. It was a marketing mix of special components: product, price, place, promotion. By a fluke, all the elements began on P (it is not established that the author selects them intentionally). Actually, the odd name of the model, 4P, was formed in such an odious way. The name has become a fundamental factor in the popularity of this marketing model due to the fact that it was simple and easy to remember. For the first time, the McCarthy concept called 4P was shown to a wide audience in 1965, the presentation was organized by the author of the article with information about 4P Neil Boden. Paradoxically, such a long-standing marketing model has indeed become (and continues to be) universally accepted, while innovative and revolutionary models of modernity cannot repeat or even come close to its success.
Still somewhat acceptable, experts recognize the model developed by Booms and Bitner in 1981. The authors in the new concept added three more to the four Ps: the process, the people, the physical justification (for example, the rationale for the provision of the service). Bitner and Booms did not think long over the name, deciding that the 7P was quite original and acceptable to itself. (More on that later.)
One of the most revolutionary marketing models was proposed by Bob Loteborn in 1990. The author decided to speak at a scientific conference, setting out in his report the main principles for constructing the 4C model. (Read more about this concept below.)
Dev and Schulz created the SIVA model in 2005, innovatively reflecting the 4P classic through the eyes of the consumer. That year was generally rich in marketing revolutions: Otlakan was offered the 2P + 2C + 3S model (information about both models is in this article.)
General characteristics of marketing
Marketing is designed so that the whole system is built on the availability of the goods directly. No product - no marketing. However, simply finding a product is not enough; it must certainly have some value (usefulness) for the consumer. The product of the offer should be available to the consumer who is interested in purchasing it, otherwise the offer does not make sense. If there are at least two parties expressing interest in exchanging with the opposite participant in economic relations, there must necessarily be some means of interaction between them. Actually, marketing is involved in solving these problems.
The ratio that defines consumer consciousness sounds like "price - quality." The buyer always gives the product an assessment based on the amount of costs that are spent on its purchase. The above ratio can be given as a price-utility option: the consumer analyzes how useful this acquisition can be for him and what price he is willing to pay for this utility.
Another element of the marketing mix is communication. Otherwise, how should the manufacturer know about the consumer. The parties to the transaction will certainly communicate, otherwise it would be very difficult for them to solve the tasks.
There are classic and non-classical versions of the marketing complex.
Classic elements of the marketing mix:
- Product. This concept includes both goods and services: packaging and design, technical specifications, assortment and its definition, quality level and many others.
- Price. The next element has the meaning of determining such characteristics as the rate of profit, cost, discounts, the price that is optimal for the consumer, the value of the product in consumer perception, and so on.
- Distribution (product reaching the consumer’s instance). In this case, we are talking about the choice of points of sale (outlets), intermediaries in the transaction, channels and methods of distribution of products, and so on.
- "Promotion" of the product. Under the product promotion on the market is understood the work of establishing effective public relations and personal sales, as well as advertising mechanisms, sales promotion of products and the like.
It’s not worth mentioning separately that communication channels are established between all marketing elements. So, the qualitative characteristics of the product and its functionality (capabilities) rightly affect the formation of the price of the goods. This specific example is due to the fact that the consumer (often on an intuitive level) puts his purchase rating on one single criterion - the ratio of price and efficiency (utility). That is, the buyer unknowingly compares the cost of the goods with the set of benefits that these products can offer him.
The classical structure of the marketing mix is a 4P concept: product, price, place, promotion. Actually, all elements of the model are described in detail above. The 4P marketing complex determines the organization’s policy in the areas of product sales, price characteristics, sales and communication. However, the main thing in determining the vector of activity of any enterprise is directly the sale of products. In its process, elements of the marketing mix may well change. Rearrangements in this case are a means of more effective impact on consumers, possible with the resources available to the organization. In this case, there is a real possibility of "betraying" the company to itself, so it is extremely important to maintain your own understanding of marketing and follow a special marketing path.
In modern conditions, there is constant development, and consequently, the complexity of the competitive component of the market. In this regard, new elements are added to the improvement of the marketing mix, forming the concepts of 5P - 12P, 4C and others. However, the increase in the components of the concept of “marketing complex” is far from provoking a stormy positive reaction among all specialists.
The main reason for the dissatisfaction highlighted by the opponents themselves of the idea of expanding the complex is the possibility, in their opinion, of violating and deforming the very concept of marketing as such, of transferring the role of additional elements from the managerial plane of marketing. It is also important that the four main components can indeed be comprehensively studied and controlled by marketers, which is difficult to say about additional elements.
Specialists recognize 7P as the most successful of all options for expanding the 4P model. To the four Ps mentioned earlier, are added:
- People - everything related to the sale.
- Process (purchase process) - the consumer's active choice of the right product.
- Physical Evidence (physical attribute) - a certain material item that satisfies the client as confirmation that the service was provided and is completely legitimate.
The model with the P family was originally created for marketing services, but is now actively used in the product version.
The main complex of 4P marketing is also criticized by experts for orientation to the micro level or the fact that only the seller is affected. As part of the expansion of this concept, the number P in the economics of marketing is increasing.
- Purchase - the reasons and consequences of the purchase.
- Package (packaging) - represents not only the prerequisites for the purchase, but also the consequences.
- Profit (profit).
- Physical Surround (environment) - updated conditions for increasing the efficiency introduced by the manufacturer.
- PR (public relations) - forms a positive perception of the consumer about the organization.
A very bold attempt to shift the focus to the consumer is to formulate the 4C model. Its main drawback, which does not allow the concept to function effectively, is the absolute rejection of P-components.
This marketing mix includes:
- Customer needs and wants.
- Cost to the customer (consumer spending).
- Communication (exchange of information).
- Convenience (consumer convenience).
All components that make up the model clearly demonstrate an attempt to reorient from the manufacturer to the consumer at all stages of both production and subsequent sale of goods. There is a desire to create an antagonist of four R. But the author, apparently, did not think that the classical elements of the marketing mix also somehow take into account the needs of the buyer. When using the 4P concept, no one will get away from analyzing the expectations of customers and other marketing research. Moreover, in addition to manufacturers and consumers, competitors and suppliers are also taken into account in the 4P model.
A relatively new alternative to tradition (SIVA was published in Marketing Management magazine in 2005). Not for nothing that we use the definition of "alternative". In this version of the marketing complex, a SIVA replacement element is selected for each component of the classic 4P concept. Classics seem to be presented “from the inside” - the gaze of the consumer.
The ratio of 4P and SIVA looks like this:
- PRODUCT -> SOLUTION (solution).
- PROMOTION -> INFORMATION (information).
- PRICE -> VALUE (value).
- PLACE -> ACCESS (access).
And now more about each of the four elements of SIVA:
- Solution Search for the most acceptable solution to the problem in order to fully satisfy the needs of the buyer.
- Information. Who should give the consumer information about the product and how to do this to ensure the sale of goods.
- Value About the costs and benefits of the buyer, about his losses and compensation.
- Access In what sources the buyer should seek help in deciding how easy it is to find or purchase a particular source.
2P + 2C + 3S
The Otlakan model refers exclusively to electronic marketing, representing a range of marketing services and narrowing. Actually, this is the main drawback of the concept. And now we indicate all the elements of the model:
- 2P - Privacy (Personalization), Personalization (personalization).
- 2C - Community (community), Customer Service (customer service).
- 3S - Sales Promotion (Security), Site (site).