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Marketing mix - Wikipedia

Marketing mix
The m arketing m ix (also known as the 4 Ps) is a foundation model in marketing. The marketing mix has been
defined as the "set of marketing tools that the firm uses to pursue its marketing objectives in the target". [1] Thus
the marketing mix refers to four broad lev els of marketing decision, namely : product, price, promotion, and
place. [2] Marketing practice has been occurring for millennia, but marketing theory emerged in the early
twentieth century . The contemporary marketing mix, or the 4 Ps, which has become the dominant framework for
marketing management decisions, was first published in 1960. [3] In serv ices marketing, an extended marketing
mix is used, ty pically comprising 7 Ps, made up of the original 4 Ps extended by process, people, and phy sical
ev idence. [4] Occasionally serv ice marketers will refer to 8 Ps, comprising these 7 Ps plus performance. [5]
In the 1990s, the model of 4 Cs was introduced as a more customer-driv en replacement of the 4 Ps. [6] There are
two theories based on 4 Cs: Lauterborn's 4 Cs (consumer, cost, communication, convenience), and Shimizu's 4 Cs
(commodity , cost, communication, and channel).
Giv en the v aluation of customers towards potential product attributes (in any category , e.g. product, promotion,
etc.) and the attributes of the products sold by other companies, the problem of selecting the attributes of a
product to maximize the number of customers preferring it is a computationally intractable problem. [7]
Emergence and growth
McCarthy's 4 Ps
Modified and expanded marketing mix: 7 Ps
Lauterborn's 4 Cs (1990)
Shimizu's 4 Cs: in the 7Cs Compass Model
Digital Marketing Mix
Difficulty of computational methods
See also
Further reading
External links
Emergence and growth
The origins of the 4 Ps can be traced to the late 1940s. [8][9] The first known mention of a mix has been attributed
to a Professor of Marketing at Harv ard Univ ersity , Prof. James Culliton. [10] In 1948, Culliton published an article
entitled, The Management of Marketing Costs[11] in which Culliton describes marketers as 'mixers of ingredients'.
Some y ears later, Culliton's colleague, Professor Neil Borden, published a retrospectiv e article detailing the early
history of the marketing mix in which he claims that he was inspired by Culliton's idea of 'mixers', and credits
himself with popularising the concept of the 'marketing mix'. [12] According to Borden's account, he used the term,
'marketing mix' consistently from the late 1940s. For instance, he is known to hav e used the term 'marketing mix'
in his presidential address giv en to the American Marketing Association in 1953. [13]
Although the idea of marketers as 'mixers of ingredients' caught on, marketers could not reach any real
consensus about what elements should be included in the mix until the 1960s. [14] The 4 Ps, in its modern form,
was first proposed in 1960 by E. Jerome McCarthy ; who presented them within a managerial approach that
cov ered analy sis, consumer behav ior, market research, market segmentation, and planning. [15] Phillip Kotler,
popularised this approach and helped spread the 4 Ps model. [16][1] McCarthy 's 4 Ps hav e been widely adopted by
both marketing academics and practitioners. [17]
The prospect of extending the marketing mix first took hold at the inaugural AMA Conference dedicated to
Serv ices Marketing in the early 1980s, and built on earlier theoretical works pointing to many important
limitations of the 4 Ps model. [18] Taken collectiv ely , the papers presented at that conference indicate that serv ice
marketers were thinking about a rev ision to the general marketing mix based on an understanding that serv ices
were fundamentally different to products, and therefore required different tools and strategies. In 1981, Booms
and Bitner proposed a model of 7 Ps, comprising the original 4 Ps extended by process, people and phy sical
ev idence, as being more applicable for serv ices marketing. [19]
Since then there hav e been a number of different proposals for a serv ice marketing mix (with v arious numbers of
Ps), most notably the 8 Ps, comprising the 7 Ps abov e extended by 'performance'[5].
McCarthy's 4 Ps
The original marketing mix, or 4 Ps, as originally proposed by marketer and academic E. Jerome McCarthy ,
prov ides a framework for marketing decision-making. [6] McCarthy 's marketing mix has since become one of the
most enduring and widely accepted frameworks in marketing. [20]
Table 1: Brief Outline of 4 Ps[6]
Definition/ Explanation
Typical Marketing Decisions
Product design – features, quality
A product refers to an item that satisfies the
consumer's needs or wants.
Products may be tangible (goods) or intangible
(services, ideas or experiences).
Product assortment – product range, product
mix, product lines
Packaging and labeling
Services (complementary service, after-sales
service, service level)
Guarantees and warranties
Managing products through the life-cycle[6]
Price refers to the amount a customer pays for a
Price may also refer to the sacrifice consumers
are prepared to make to acquire a product.
(e.g. time or effort)
Price strategy
Price tactics
Price is the only variable that has implications
Allowances – e.g. rebates for distributors
for revenue.
Discounts – for customers
Payment terms – credit, payment methods
Price also includes considerations of customer
perceived value.
Strategies such as intensive distribution,
selective distribution, exclusive distribution [21]
Refers to providing customer access
Market coverage
Considers providing convenience for consumer.
Channel member selection and channel member
Location decisions
Transport, warehousing and logistics
Promotion refers to marketing communications
May comprise elements such as: advertising,
PR, direct marketing and sales promotion.
Promotional mix - appropriate balance of
advertising, PR, direct marketing and sales
Message strategy - what is to be communicated
Channel/ media strategy - how to reach the
target audience
Message Frequency - how often to communicate
Product refers to what the business offers for sale and may include products or serv ices. Product decisions
include the "quality , features, benefits, sty le, design, branding, packaging, serv ices, warranties, guarantees, life
cy cles, inv estments and returns". [23]
Price refers to decisions surrounding "list pricing, discount pricing, special offer pricing, credit pay ment or
credit terms". Price refers to the total cost to customer to acquire the product, and may inv olv e both monetary
and psy chological costs such as the time and effort expended in acquisition. [23]
Place is defined as the "direct or indirect channels to market,
geographical distribution, territorial cov erage, retail outlet, market
location, catalogues, inv entory , logistics and order fulfilment". Place
refers either to the phy sical location where a business carries out
business or the distribution channels used to reach markets. Place may
refer to a retail outlet, but increasingly refers to v irtual stores such as "a
mail order catalogue, a telephone call centre or a website". [23]
Prom otion refers to "the marketing communication used to make the
offer known to potential customers and persuade them to inv estigate it
The 4Ps have been the cornerstone
of the managerial approach to
marketing since the 1960s
further". [23] Promotion elements include "adv ertising, public relations,
direct selling and sales promotions.
Modified and expanded marketing mix: 7 Ps
By the 1980s, a number of theorists were calling for an expanded and modified framework that would be more
useful to serv ice marketers. The prospect of expanding or modify ing the marketing mix for serv ices was a core
discussion topic at the inaugural AMA Conference dedicated to Serv ices Marketing in the early 1980s, and built
on earlier theoretical works pointing to many important problems and limitations of the 4 Ps model. [18] Taken
collectiv ely , the papers presented at that conference indicate that serv ice marketers were thinking about a
rev ision to the general marketing mix based on an understanding that serv ices were fundamentally different to
products, and therefore required different tools and strategies. In 1981, Booms and Bitner proposed a model of 7
Ps, comprising the original 4 Ps plus process, people and physical evidence, as being more applicable for
serv ices marketing. [19][24]
Table 2: Outline of the Modified and Expanded Marketing Mix
Definition/ Explanation
Typical Marketing Decisions
Facilities (e.g. furniture, equipment,
The environment in which service occurs.
The space where customers and service personnel
Spatial layout (e.g. functionality,
Signage (e.g. directional signage,
symbols, other signage)
Tangible commodities (e.g. equipment, furniture) that
Interior design (e.g. furniture, color
facilitate service performance.
Ambient conditions (e.g. noise, air,
Design of livery (e.g. stationery,
brochures, menus, etc.)
Artifacts: (e.g. souvenirs, mementos,
Human actors who participate in service delivery.[26]
Service personnel who represent the company's values
Staff recruitment and training
to customers.
Interactions between customers.
Interactions between employees and customers.[27]
Queuing systems, managing waits
Handling complaints, service failures
Managing social interactions
Process design
Blueprinting (i.e. flowcharting) service
Standardization vs customization
The procedures, mechanisms and flow of activities by
which service is delivered.
Diagnosing fail-points, critical incidents
and system failures
Monitoring and tracking service
Analysis of resource requirements and
Creation and measurement of key
performance indicators (KPIs)
Alignment with Best Practices
Preparation of operations manuals
People are essential in the marketing of any product or serv ice. Personnel stand for the serv ice. In the
professional, financial or hospitality serv ice industry , people are not producers, but rather the products
themselv es. [29] When people are the product, they impact public perception of an organization as much as any
tangible consumer goods. From a marketing management perspectiv e, it is important to ensure that employ ees
represent the company in alignment with broader messaging strategies. [30] This is easier to ensure when people
feel as though they hav e been treated fairly and earn wages sufficient to support their daily liv es.
Process refers a "the set of activ ities that results in deliv ery of the product benefits". A process could be a
sequential order of tasks that an employ ee undertakes as a part of their job. It can represent sequential steps
taken by a number of v arious employ ees 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
employ ees, ensuring that processes are followed. They are also expected to superv ise while customers are
promptly greeted, seated, fed, and led out so that the next customer can begin this process. [30]
Phy sical ev idence refers to the non-human elements of the serv ice encounter, including equipment, furniture
and facilities. It may also refer to the more abstract components of the env ironment in which the serv ice
encounter occurs including interior design, colour schemes and lay out. Some aspects of phy sical ev idence
prov ide lasting proof that the serv ice has occurred, such as souv enirs, mementos, inv oices and other liv ery of
artifacts. [29] According to Booms and Bitner's framework, the phy sical ev idence is "the serv ice deliv ered and any
tangible goods that facilitate the performance and communication of the serv ice". [30] Phy sical ev idence is
important to customers because the tangible goods are ev idence that the seller has (or has not) prov ided what
the customer was expecting.
Lauterborn's 4 Cs (1990)
Robert F. Lauterborn proposed a 4 Cs classification in 1990. [31] His classification is a more consumer-orientated
v ersion of the 4 Ps[32] that attempts to better fit the mov ement from mass marketing to niche marketing:[31]
4 Ps
4 Cs
wants and
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.[31][33]
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".[31] 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.[34]
While promotion is "manipulative" and from the seller, communication is "cooperative"
and from the buyer[31] with the aim to create a dialogue with the potential customers
based on their needs and lifestyles.[35] 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
In the era of Internet,[33] catalogues, credit cards and phones, consumers neither
need to go anywhere to satisfy a want or a need nor are they 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.[31][35] 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.[36]
Shimizu's 4 Cs: in the 7Cs Compass Model
After Koichi Shimizu proposed a 4 Cs classification in 197 3, it was expanded to the 7 Cs Com pass Model to
prov ide a more complete picture of the nature of marketing in 197 9. The 7 Cs Compass Model is a framework of
co-marketing (commensal marketing or Sy mbiotic marketing). Also the Co-creativ e 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 (sy mbiotic) marketing is a marketing on which both
corporation and a corporation, a corporation and a consumer, country and a country , human and nature can
liv e. [37][38][39][40][41]
The 7Cs Compass Model comprises:
(C1) Corporation – The core of 4 Cs is corporation (company and non profit organization). C-O-S (competitor,
organization, 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 .
T he 4 elem ents in the 7 Cs Com pass Model are:
A formal approach to this customer-focused marketing mix is known as 4 Cs (commodity , cost, communication,
channel) in the 7 Cs Compass Model. The 4 Cs model prov ides a demand/customer centric v ersion alternativ e to
the well-known 4 Ps supply side model (product, price, promotion, place) of marketing management. [42]
Product → Commodity
Price → Cost
Promotion → Communication
Place → Channel
"C" category
"C" definition
(Latin derivation: commodus=convenience, happiness) : Co-creation. The goods and
services for consumers or citizens.
(C3) Cost
(Latin derivation: constare= It makes sacrifices) : There is not only producing cost and
selling cost but purchasing cost and social cost.
(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.
(C5) Channel
(Latin derivation: canal) : marketing channels. Flow of goods.
T he com pass of consum ers and circum stances (env ironm ent) 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:
N = Needs
S = Security
E = Education: (consumer education)
W = Wants
(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:
N = National and International (Political, legal and ethical) environment
S = Social and cultural
E = Economic
W = Weather
EXHIBIT: Shimizu's 7 Cs Compass Model (Courtesy : © Koichi Shimizu, Japan) (http://www.josai.ac.jp/~shimizu/
These can also be remembered by the cardinal directions marked on a compass. The 7 Cs Compass Model is a
framework in co-marketing (sy mbiotic marketing). It has been criticized for being little more than the 4 Ps with
different points of emphasis. In particular, the 7 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 7 Cs also
include numerous strategies for product dev elopment, distribution, and pricing, while assuming that consumers
want two-way communications with companies.
An alternativ e approach has been suggested in a book called 'Service 7 ' by Australian Author, Peter Bowman.
Bowman suggests a v alues based approach to serv ice marketing activ ities. Bowman suggests implementing sev en
serv ice marketing principles which include v alue, business dev elopment, reputation, customer serv ice and
serv ice design. Serv ice 7 has been widely distributed within Australia.
Digital Marketing Mix
Digital m arketing m ix is fundamentally the same as Marketing Mix, which is an adaptation of Product,
Price, Place and Prom otion into digital marketing aspect. [43] Digital marketing can be commonly explained as
'Achiev ing marketing objectiv es through apply ing digital technologies'. [44]
Thanks to the interaction and connection of the Internet, Product has been redefined as 'v irtual product' in the
digital marketing aspect, which is regarded as the combination of tangibility and intangibility . Through the form
of digital, a product can be directly sent from manufacturers to customers. [45] For example, customers could buy
music in the form of an MP3 rather than buy it in the form of a phy sical CD. As a result, when a company is
making strategy for Internet marketing, it is necessary to understand how to v ary their products in the online
env ironment. Here are some indications of adapt the product element on the Internet. [44]
Modifying the core product: In this case, it particularly refers to the products that can be remodeled into digital forms
including movies, music, books and other publishing etc. Take Netflix as an example. The wide use of Internet has
changed its form of products from selling and renting DVDs through retail stores into selling and renting video online.
Providing digital products: In order to gain market shares in the Internet, companies need to widen its product range.
For example, a psychological counseling could offer online consultation via video calls.
Building the whole product: Apart from selling products online, Amazon.com also provides a paid subscription
service called Amazon Prime, with which customers could enjoy free delivery and videos on Amazon.
Conducting online research: The Internet offers a low-cost and convenient way of making marketing researches,
which is helpful for companies to find out what products or services do customers prefer.
Price concerns about the pricing policies or pricing models from a company . Due to the widely use of the
Internet, many applications could be found in both consumer's and producer's perspectiv e. From consumers'
side, the Internet enables people to make a comparison to a real-time prices before they make a consumption
decision, which is time-sav ing and effort-sav ing for the consumers. [46] As for the suppliers, they can adjust prices
in the real-time and prov ide higher degree of price transparency with customers. Besides, the Internet is more
likely to ease the pressure on price because online-producers do not hav e to put budget on renting a phy sical
store. [44] Hence, making new or adjusting pricing strategies is essential for the company that wants to enter the
Internet market.
Pricing strategies and tactics see also: Pricing
With the application of the Internet, place is play ing an increasingly important role in promoting consumption
since the Internet and the phy sical channels become v irtual. [43] The major contribution from the Internet to the
business is not only making it possible to selling products online, but also enabling companies to build
relationships with customers. [47] Furthermore, since the conv enience of nav igating from one site to another,
place from the digital marketing perspectiv e is alway s linked with prom otion, which means retailers often uses
third-party websites such as Google search engine to guide customers to v isit their websites. [44]
Prom otion
Prom otion refers to select the target markets, locate and integrate v arious communications tools in the
marketing mix. Unlike the traditional marketing communication tools, tools in digital marketing aim at engaging
audiences by putting adv ertisements and contents on the social media, including display ads, pay -per-click
(PPC), search engine optimisation (SEO) etc. [44] In order to help in making online marketing campaign, Chaffey
and Smith suggested that they can be separated into six groups. [48]
Searching marketing, including search engine optimisation(SEO), pay-per-click(PPC).
Online PR, enlarging good comments on one's products or services while reducing negative comments.
adverse comments.
Online partnerships, building relationships between third-party webs to promote products or services.
Interactive advertising
Opt-in e-mail advertising
Social media marketing, starting and participating in customer to customer, customer to company interaction
through social media.
Difficulty of computational methods
Automatically selecting the attributes of a product (in any category , i.e. product, promotion, etc.) to maximize
the number of customers preferring the resulting product is a computationally intractable problem. [7] Giv en
some customer profiles (i.e., customers sharing some features such as e.g. gender, age, income, etc.), the
v aluations they giv e to each potential product attribute (e.g. females aged 35–45 giv e a 3 out of 5 v aluation to "it
is green"; males aged 25–35 giv e 4/5 to "it can be paid in installments"; etc.), the attributes of the products sold
by the other producers, and the attributes each producer can giv e to its products, the problem of deciding the
attributes of our product to maximize the number of customers who will prefer it is Poly -APX-complete. This
implies that, under the standard computational assumptions, no efficient algorithm can guarantee that the ratio
between the number of customers preferring the product returned by the algorithm and the number of
customers that would prefer the actual optimal product will alway s reach some constant, for any constant.
Moreov er, the problem of finding a strategy such that, for any strategy of the other producers, our product will
alway s reach some minimum av erage number of customers ov er some period of time is an EXPTIME-complete
problem, meaning that it cannot be efficiently solv ed. Howev er, heuristic (sub-optimal) solutions to these
problems can be found by means of genetic algorithms, particle swarm optimization methods, or minimax
See also
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44. Chaffey, Dave; Ellis-Chadwick, Fiona (2012). Digital mark eting: strategy, implementation and practice (5th ed.).
Harlow: Pearson Education.
45. Pastore, A; Vernuccio, M (2004). Mark eting, Innovazione e Tecnologie Digitali. Una lettura in ottica sistemica.
Padua(IT): Cedam.
46. Bhatt, Ganesh D; Emdad, Ali F (2001). "An analysis of the virtual value chain in electronic commerce". Logistics
Information Management. 14 (1/2): 78–85.
47. Bhatt, Ganesh D; Emdad, Ali F (2001). "An analysis of the virtual value chain in electronic commerce". Logistics
Information Management. 14 (1/2): 78–85.
48. Chaffey, D; Smith, P.R (2008). Emark eting Excellence, Planning and optimising your digital mark eting (3rd ed.).
Oxford: Butterworth-Heinemann.
Further reading
Everyday Finance: Economics, Personal Money Management, and Entrepreneurship (https://www.highbeam.com/do
c/1G2-2830600254.html). Overview: Mark eting Mix: Product, Price, Place, Promotion. January 1, 2008.
John A. Quelch; Katherine E. Jocz (Winter 2008). "Milestones in Marketing" (http://www.hbs.edu/faculty/Publicatio
n%20Files/Milestones%20in%20Marketing_Quelch_Jocz_cca1547e-d4e1-4470-8f92-edc877bebaf7.pdf) (PDF).
Business History Review. The President and Fellows of Harvard College. 82: 827–838.
doi:10.1017/S0007680500063236 (https://doi.org/10.1017%2FS0007680500063236).
John A. Quelch; Katherine E. Jocz (2012). All Business is Local: Why Place Matters More than Ever in a Global,
Virtual World. Penguin. p. 4.
Four P's, Four C's And The Consumer Revolution (https://web.archive.org/web/20120306105651/http://www.ppbmag.
Four (4) Ps of Digital Transformation (https://www.linkedin.com/pulse/4ps-digital-transformation-platform-people-proje
ct-process-sandhu/): Jasbir Sandhu
External links
7Cs Compass model(1979) in Japan (http://www.josai.ac.jp/~shimizu/es
Four P's, Four C's And The Consumer Revolution (https://web.archive.or
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