The marketing mix

Marketing tactics are normally described as the marketing mix. The mix is generally thought to be composed of the elements described below. The role of the board, therefore, is to ensure that the relationship between the strategic requirements of the firm and investment in its long-term marketing capability is well managed. It must ensure that:

1. The mix of products and/or services (the tangible attempt to satisfy customer needs) is appropriate to the strategy, and the organization is able to renew its offerings and achieve the necessary levels of innovation.

2. Pricing policies reflect the joint requirement to provide competitive value for customers and an appropriate return for the shareholder. This may involve broader decisions about investment in cost management and/or the withdrawal from markets where the balance between customer value and shareholder value cannot be maintained.

3. The funding for communication and promotion is sufficient to ensure the organization can achieve the necessary levels of awareness, interest and action over the long term, and can support particular strategic promotional campaigns. This will involve the board understanding the contribution of information technology and the changes it has brought about in this context.

4. Place (distribution systems) is in place which is capable of meeting customer requirements both now and in the future. Physical and electronic means of addressing this are available, both individually (some services can be delivered entirely electronically) and in concert (information technology has improved the efficiency of physical distribution substantially).

These four elements (often referred to as the four P-s – product, price, promotion and place) combine to satisfy customer needs for physical products and services. It is important to note that there are three further elements that are essential to the successful prosecution of marketing strategy (people, process and physical evidence), and some believe there is a fourth (personalization). These have particular significance for the marketing of services and mean the board must also ensure that:

1. People strategies enable the staff to make significant contributions to the success with which the company creates value for its customers through excellent customer service, efficiency, innovation, etc. People are sometimes the only tangible element of the service transaction, and more often than not they are a critical aspect of the creation of quality.

2. There are processes that support and enable the implementation of the marketing strategy. Effective and efficient process management is vital for both products and services. It is important to note, however, that process failure in the pure service context may mean failure of the service itself, particularly where the outcome is time sensitive (service cannot be stored).

3. The physical evidence (literature, premises, uniforms etc.) associated with the offering of the company in all its forms supports both the internal and external positioning strategy.

4. Where appropriate, personalization is achieved. Individualization or ‘mass-customization’ has been proposed as the eighth element in the marketing mix. For some companies, one-size-fits-all is no longer the offer; they are now basing their relationships with customers on the customizing or tailoring of goods and services to the specific needs and wants of each individual consumer. For example, every Dell PC is made to the customer's specification, using standard components. The motor and clothing industries are taking the same route.

Strategic and tactical implications

The marketing mix has both strategic and tactical implications. In the longer term, the organization is attempting to create advantageous positions in its various markets, taking into account the need to generate returns for stakeholders and the impact of broad-scale elements, as well as the strategic intentions of competitors. In the short term, the elements will be used to respond to detailed movements in the market (such as changing customer needs and competitor activities), and to gain tactical advantage. An example is given in the table:

Mix element	Tactical issues	Strategic issues
Product/service	Detailed modifications	New product development
Price	Minor adjustments	Shareholder value
Promotion	Positioning/branding	Brand building
Distribution (place)	Channel management	Logistics and channel strategy
People	Day-to-day management	Recruitment and training
Processes	Process management	Systems development
Physical evidence	Attention to detail (e.g. cleanliness)	Design and control of overall physical appearance

The allocation of resources to the mix elements should be determined by the contribution that each element is expected to make to the achievement of marketing objectives.

Exercise 9. Read the text once again and express the contents of every passage in one sentence.

Exercise 10. Fill in the gaps in this passage with the words under the line; learn the new words to expand vocabulary on the topic.