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Marketing Mix: A Review of �P�

By Chai Lee GOI, Curtin University of Technology, Malaysia

Web: http://www.curtin.edu.my
Email: [email protected]

Goi is lecturer, School of Business, Curtin University of Technology, Sarawak Campus, Malaysia

Abstract

There has been a lot of debate in identifying the list of marketing mix elements. The traditional
marketing mix by McCarthy (1964) has regrouped Borden�s (1965) 12 elements and has
comprised to four elements of product, price, promotion and place. A number of researchers
have additionally suggested adding �people, process and physical evidence decisions�
(Booms and Bitner, 1981; Fifield and Gilligan, 1996). The other suggested Ps are �personnel,
physical assets and procedures� (Lovelock, 1996; Goldsmith, 1999); �personalisation�
(Goldsmith, 1999); �publications� (Melewar and Saunders, 2000); �partnerships� (Reppel,
2003); �premium price, preference of company or product, portion of overall customer budget
and permanence of overall relationship longevity� (Arussy, 2005); and �2P+2C+3S formula�
(Otlacan, 2005), therefore personalisation, privacy, customer Service, community, site, security
and sales promotion.

Introduction

After first marketing mix concept has been claims introduced by Borden (1965) that was suggested to
him by Culliton (1948), and has been �refined this further and defined the marketing mix as a
combination of all of the factors at a marketing manger�s command to satisfy the target market� by
McCarthy�s (1964), �numerous modifications to the 4Ps framework have been proposed� (Rafiq and
Ahmed, 1995). The marketing mix has dominated marketing thought, research and practice since it was
introduced almost 40 years ago (Gr�nroos, 1994). Marketing mix �means of translating marketing
planning into practice� (Bennett, 1997).

Marketing Mix

�Marketing mix is the set of the marketing tools that the firm uses to pursue its marketing objectives in
the target market� (Kotler, Ang, Leong and Tan, 1999). �Theories of marketing management and
strategy need to evolve and change to keep pace with changes in the marketplace and in marketing
practice� (Goldsmith, 1999). �Central to marketing management is the concept of the marketing mix
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(see Figure 1). The marketing mix is not a theory of management that has been derived from scientific
analysis, but a conceptual framework which highlights the principal decisions that marketing managers
make in configuring their offerings to suit customers� needs. The tools can be used to develop both
long term strategies and short term tactical programmes� (Palmer, 2004).

Figure 1: The Marketing Mix

Adapted from: Palmer (2004)

The original of Borden�s (1965) marketing mix includes product planning, pricing, branding, channels
of distribution, personal selling, advertising, promotions, packaging, display, servicing, physical handling,
as well as fact finding and analysis. However, all the 12 elements did not be fixed or sacrosanct (Rafiq
and Ahmed, 1995).

Frey (1961) has suggested that marketing variables should be divided into two parts. The first part
covers the offering that includes product, packaging, brand, price and service. Second part refers to the
methods and tools that include distribution channels, personal selling, advertising, sales promotion and
publicity.

Another suggestion has been arising to suggest three elements: the goods and services mix, the
distribution mix and the communication mix (Lazer and Kelly, 1962; Lazer et al. 1973; Rafiq and Ahmed,
1995).

Finally, McCarthy (1964) has regrouped Borden�s 12 elements to the 4Ps. Figure 2 shows the
marketing variables under the each P and Figure 3 shows the company preparing an offer mix of the
products, services, and price, and utilising a promotion mix of sales promotion, advertising, sales force,
public relations, and direct mail to reach the distribution channels and the target consumers (Kotler, Ang,
Leong and Tan, 1999).

Figure 2: The 4Ps of the Marketing Mix

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Adapted from: Kotler, Ang, Leong and Tan (1999)

Figure 3: Marketing Mix Strategy

Adapted from: Kotler, Ang, Leong and Tan (1999)

Evolutionary of �P�

In the context of services marketing, Booms and Bitner (1981) has suggested another extra 3Ps that contain
people, physical evidence and process. People refer to all people directly or indirectly involved in the consumption
of a service, example employees or other consumers. Process is all about the procedure, mechanisms and flow of
activities by which services are consumed. Finally, physical evidence, that related to the environment in which the
service is delivered. It also includes tangible goods that help to communicate and perform the service (see Table
1). Fifield and Gilligan (1996) also has identifies extra 3Ps that shows some similarity with Booms and Bitner (1981)
framework, therefore process, physical and people.
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Table 1: 4Ps and Booms & Bitner�s 3Ps

Product Price Place Promotion Participants Physical Process

evidence

Traditional            

Quality Level Distribution Advertising      

Features and Discounts and Channel Personal selling      

Option Allowances Distribution Sales      

promotion

Style Payment terms Coverage Publicity      

Brand name   Outlet locations        

Packaging   Sales territories        

Warranty   Inventory levels        

Service level   And locations        

Other   Transport        
services

    Carriers        

             

Adapted from: Kotler (1976); Rafiq and Ahmed        

(1995)

             

Modified and expanded for          

services

Quality Level Location Advertising Personnel Environment: Policies

Brand name Discounts and Accessibility Personal selling Training Furnishings Procedures

Service line Allowances Distribution Sales Discretion Colour Mechandisation

promotion

Warranty Payment terms Channel Publicity Commitment Layout Employee

Capabilities Customer�s Distribution Personnel Incentives Noise level Discretion

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own

Facilitating Perceived Coverage Physical Appearance Facilitating Customer

Goods Value   Environment Interpersonal Goods Involvement

Tangible Quality/ price   Facilitating Behaviour Tangible clues Customer

clues

Price Interaction   Goods Attitudes   Direction

Personnel Differentiation   Tangible clues Other customers:   Flow of

Physical     Process of Behaviour   Activities

Environment     Service Degree of    

Process of     Delivery Involvement,    

Service       Customer/    

Delivery       Customer    

        Contact    

Adapted from: Booms and Bitner (1981); Rafiq and Ahmed (1995)      

             

Marketing strategy development may therefore be viewed as developing a marketing mix aimed at satisfying the
needs of selected markets and accomplishing specific marketing objectives. All activities are affected by two
general kinds of variables, therefore those relating to the marketing mix, and those relating to the marketing
environment (see Figure 4). The other Ps are power, public relations, physical facilities, personnel and process
management. In order to achieve organisational goals, the marketer must be engaged constantly in fashioning a
mix of marketing procedures and policies to cope with the dynamic environment or known as the uncontrollable
variables (Low and Tan, 1995).

Figure 4: An Overview of the Marketing Environment

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Adapted from: Low and Tan (1995)

�Services marketing theorists have taken great pains to distinguish services marketing from product marketing. A
major portion of this effort has focused on rethinking the marketing mix and showing how it is different for services.
By demonstrating that the marketing of services requires different decisions than goods marketing requires, these
thinkers present services marketing as a unique and distinct type of marketing. The services marketing mix differs
chiefly from the 4Ps by the addition of three new decision responsibilities that must be integrated to form a coherent
and effective services marketing mix. By adding personnel, physical assets, and procedures to the marketing mix,
forming the 7Ps, services marketing theorists staked out a new field of management theory and practice separate
from the marketing of tangible goods� (Lovelock, 1996; Goldsmith, 1999). �This conceptual advance has, in turn,
caused a re-evaluation of traditional marketing management thought by obscuring the boundary between goods
and services, forcing the realisation that many products consist of elements of both tangible goods and intangible
services� (Goldsmith, 1999).

Theories of marketing management and strategy need to evolve and change to keep pace with changes in the
marketplace and in marketing practice. As the next century draws closer, it is apparent that some marketing
managers are basing their relationships with customers on policies and procedures called either
�individualisation�, �mass-customisation�, or �personalisation�. The core of this practice involves tailoring
goods and services to the individual needs and wants of specific consumers, just the opposite of one-size-fits-all
(Goldsmith, 1999). Goldsmith (1999) propose that personalisation is so important to marketing strategy that it
should become one of the featured elements of the marketing mix, alongside product, price, promotion, place,
personnel, physical assets and procedures to form a new marketing mix, the 8Ps.

Based on Melewar and Saunders (2000) study, designers have used Corporate Visual Identity Systems (CVIS) to
widen the communications mix based on the eight Ps. The eight Ps is based on the traditional four Ps (product,
price, promotion, and place), with Booms and Bitner�s (1981) extra added three Ps, service marketing�s extra
3Ps (participation, physical evidence, and process); and the new P added, publications. CVIS component covers
clothing, buildings, and vehicles, and the publications cover the stationary, forms and general publications.

In the context of relationship marketing (to consumers) or key-account management (in industrial marketing), it
could be argued to add partnerships as an additional P to the marketing mix. Main reason for this addition would
be the growing focus in marketing toward long-term orientation that needs to be considered in most marketing
concepts (Reppel, 2003).

Arussy (2005) believes that the traditional 4Ps were subjected to massive depreciation. It is time to face the
emerging new Ps, around which each company must build leadership and core competency, therefore premium
price, preference of company or product, portion of overall customer budget and permanence of overall relationship
longevity. Unlike the old 4Ps, which represented the company�s choices and decisions and were driven by the
company�s actions, these 4Ps are driven by customer actions and finally incorporate customers into the centre of
a company�s principles. Premium price is about your ability to charge and obtain a higher price. Preference for
products and services goes beyond selection of a product. Portion of budget is all about providing your company
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with a larger portion of the customer�s total budget. Permanence, as in personal relationships, is the ultimate
measure.

E-Marketing Strategy

By understanding the impact of the Internet on marketing mix and competitive forces, E-business
managers can adopt appropriate strategies for meeting the unique challenges of E-business. A look at
E-business strategies composed of the five competitive forces and the four marketing mix (see Table 2)
shows that there is no single optimal business strategy for E-commerce because the sources of
competitive advantage differ across different industries or markets. By the same token, in industries or
markets where different levels of competitive forces are present, certain combinations of product, price,
promotion and place strategies may not work for gaining competitive advantage (Shin, 2001)

Table 2: Business Online Strategies for Competitive Advantage: Product, Price, Promotion and
Place Strategies Responding to Five Competitive Forces

  Product Price Promotion Place

Threat of Product differentiation Price Customer-centric Outsourcing or

new entrants (e.g., bundling) discrimination strategic
Promotion strategy alliances
 
  (e.g., price lining
and smart pricing) (One-to-one  
Niche products or
marketing or
innovation   Clicks-and-
relationship
mortar strategy
 
Cost leadership marketing)
(Integration of
Customer-centric  
  Online and
Strategy Offline
Value-added Brand appeal based
businesses)
 
products or on experiences and
services beliefs
Expansion into a
related product line  

Revenue-sharing
marketing (many to-
many marketing or
performance-based
marketing)

Rivalries Product differentiation Price Customer-centric Outsourcing or

among (e.g. bundling) discrimination  
strategic
existing  
alliances
firms (e.g., Price lining Promotion strategy  
Niche products or and smart pricing)
 
innovation   Clicks-and-
 
Brand appeal based Mortar strategy
Cost leadership on experiences and
Customer-centric   beliefs
strategy  
Value-added
 
products or Revenue-sharing
Expansion into a services marketing
related product line

Threat of Product differentiation Price Cost leadership Clicks-and-

substitutes discrimination Mortar
(e.g., bundling) Value-added
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(e.g., price lining Strategy
and smart pricing)  
Niche products or Products or services
innovation
 
 

Customer-centric  
strategy
 

Bargaining   Value-added Revenue-sharing Outsourcing or

power of products or marketing strategic
suppliers services alliances

Bargaining   Value-added Customer-centric Outsourcing or

power of products or strategic
buyers services Promotion strategy alliances
 
     
Brand appeal based
on experiences and
beliefs
 

Revenue-sharing
marketing

Adapted from: Shin (2001)

E-marketing strategy is based and built upon the principles that govern the traditional, offline marketing
or 4Ps that form the classic marketing mix. The extra 3Ps, people, processes and proof provide the
whole extended marketing mix. The extended marketing mix (4 + 3Ps) is built around the concept of
�transactional� and its elements perform transactional functions defined by the exchange paradigm.
What gives E-marketing its uniqueness is a series of specific functions, relational functions that can be
synthesised in the 2P+2C+3S formula (personalisation, privacy, customer service, community, site,
security and sales promotion) (see Figure 5). These 7 functions of the E-marketing stay at the base of
any E-marketing strategy and they have a moderating character, unlike the classic marketing mix that
comprises situational functions only. Moderating functions of E-marketing have the quality of moderate
and operate upon all situational functions of the classic 4 Ps and upon each other (Otlacan, 2005).
Figure 6 illustrates how the E-marketing tools are classified into the functions of the E-marketing mix.
E-marketing implies new dimensions to be considered aside of those inherited from the traditional
Marketing. These dimensions revolve around the concept of relational functions and they are a must to
be included in any E-marketing strategy in order for it to be efficient and deliver results (Otlacan, 2005).

Figure 5: The E-Marketing Mix

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Adapted from: Kalyanam and McIntyre (2002)

Figure 6: A Taxonomy of E-Marketing Tools

Adapted from: Kalyanam and McIntyre (2002)

Conclusion

�There is no clear yes or no regarding the usefulness of any possible extension to the traditional 4Ps
approach in marketing� (Reppel, 2003). However, �the definition of the elements of the marketing mix
is largely intuitive and semantic. The list of mix elements has a lot of everyday practice value because it
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provides headings around which management thoughts and actions can be focused� (Palmer, 2004).
Seem the marketing activity still going on and active, the marketing strategy may be need to be
redefined based on the current and future�s needs and requirements.

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