The Concept Of Marketing Mix - Case Study Example

The Concept Of Marketing Mix The new economy has brought the newer concepts to organizations like customer focus, good value, quality service and efficient exchange mechanisms for satisfying customer needs and wants. One of the important aspects, which played phenomenal role in organization success, is marketing concepts. Face of Marketing concepts and practices are changing continuously. As Peter Drucker (1973) opines that “the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or services fits him and sells it self. Ideally marketing should result in a customer who is ready to buy. Marketing is an organizational function and a set of process for creating, communicating and delivering value to customers and managing customer relationships in ways that benefit the organization and its stakeholders (Kotler, 2003). The first objective in marketing is discovering the needs of prospective consumers. Effective marketing can clearly shape persons wants and tries to influence what we buy. The second objective in marketing is satisfying the needs of targeted consumers. Because an organization obviously can’t satisfy all consumer needs, it must concentrate its efforts on certain market one or more specific groups of potential customers towards which an organization directs it marketing program. Having selected the target market, consumers, the organization then takes action to satisfy their needs by developing a unique marketing program to reach them. These programs are planned to achieve organizations objectives. Marketing mix is the set of marketing tools which organization uses to pursue its marketing objective in the target market ¼Borden, 1994). McCarthy (1999) classified these tools into four broad groups that he called the four P’s of marketing i.e. product, place, promotion and price. Marketing-mix decisions influence trade channels as well as final consumers. Typically, the firm can change it prices, Sales force size and advertising expenditures in the short run, although it can develop new products and modify its distributions only in the long run. Normally the firms tend to make fewer marketing mix changes in the short run. Clearly, marketing activities should be carried out under a well thought out philosophy of efficient, effective and socially responsible marketing. But with the growth of different activities at the market place these marketing tools i.e. 4 P’s may not be sufficient for the organization to have effective marketing action. Although it’s still very important to run an efficient operation, that alone is no longer enough for success. Employees must be customer service oriented in addition to being concerned about efficiency. The service product must be tailored to customer needs, priced realistically, distributed through convenient channels and actively promoted to customers. The organization must continuously be aware of trends in size and structure of each market in which its services compete, and very important, the organization must monitor what its competitors are doing and have a clear strategy for achieving and maintaining competitive advantage. The marketing concepts and practices that have been developed in manufacturing sector often cannot be directly transferable to service organizations due to some basic differences such as in service products are ephemeral and cannot be inventoried, Intangible elements dominate value creation, customers may be involved in the production process, other people may form part of the product, there is greater variability in operational inputs and outputs, many services are difficult for customers to evaluate, the time factor assumes great importance and distribution channels take different form. Now to capture the distinctive nature of service performances, practitioners of marketing management, extended the marketing mix by adding three elements associated with service delivery i.e. physical environment/evidence process and people (Booms and Bitner, 1981). Collectively these seven elements referred to as the 7P’s of service marketing or extended marketing mix. Let us define each factor of extended marketing mix one by one in the context of our firm. New Products are essential to organizations long-term success. Although the rate of new product failure is disturbingly high, companies can improve their chances of success by creating products with a high product advantage. New product development process covers idea generation, screening, concept development and testing marketing strategy development, business analysis, product development market testing and commercialization. Over time existing products are vulnerable to changing customer needs and tastes, new technologies, shortened product life cycles and increased competition. A company can add new products in two ways: through acquisition ¼buying another company, buying another firms patent or buying a license or franchise½ or through development ¼using its own laboratories, hiring independent researchers or hiring a new product development firm½. Most of the successful & competitive products found greater success when the organization has a better understanding of customer needs; a higher performance to cost ratio, a head start in introducing the product before competitors; a higher expected contribution margin, a higher budget for promoting and launching the product, more use of cross functional teamwork; and stronger top-management support ¼Madique & Zirger, 1984½. Addition to above, for services, we need to be attentive to all aspects of the services performance that have the potential to create value for customers, Delivering product elements to customers involves decisions on the place and time of delivery as well as on the methods and channels used. Firms may directly deliver services to customers or through intermediary organizations. Speed and convenience of place & time for customer are becoming important determinants in service delivery strategy. Now as a supplier agency Pulse Nursing & care Ltd. have the persons having special skills such as Nursing & caregivers to hospitals, elderly or disabled people. Now the firm has these persons as products/service givers. Refining and modifying skills of people ¼Nurses & care givers½ and providing special & additional services to the clients defines the new product range for the firm and providing best services according to customers needs provide competitive edge to the firm. Here the services have to be provided at the doorstep of the client and in time. So place and time to provide services is one of the important factors of marketing mix for Pulse Nursing & care Ltd. No marketing programme can succeed without effective promotion/communications. This component plays three vital roles: Providing needed information and advice, persuading target customers of the merits of a specific products, and encouraging them to take action at specific times, In services marketing, as for the current company, much communication is educational in nature, especially for new customers. Company may need to teach these customers about the benefits of the service, nature and when to obtain it, and how to participate in service processes. So individuals or media and especially through websites, can deliver promotion to the firm. Promotional activities must influence customers as well as provide more knowledge/information ¼specially through website½ about the specific features of the services provided by the firm. It also influences brand choice, and incentives may be used to attract customers to buy the services. Price of the products or services is also a vital marketing tool for any organization. In the entire marketing mix price is the one element that produces revenues, the other produce costs. Price is also one of the most flexible elements. It can be changed quickly, unlike products or channels. Companies usually establish a pricing structure that reflects variations in geographical demand and costs, market segment requirements, purchase timing order levels and other factors. Several pricing adaptation strategies are available: i½ Geographical ii½ Price discounts and allowances iii½ promotional pricing iv½ discriminatory pricing and v½ product mix pricing, which includes setting price for product lines, optional features, captive product, two part items, by products and product bundles. After developing pricing strategy, marketers must develop strategies for responding to competitors’ price changes. Market leaders who are attacked by lower priced competitors can choose to maintain price, raise the perceived quality or reduce price, increase price and improve quality or launch a low price fighter line. In the present firm prices for the services has to be set by the requirements of the customer, the situation, requirement service conditions, geographical location etc. Now managing the services of Pulse Nursing & Care Ltd., which is providing Nurses and Care Staff to various institutions and individuals, has to take care the above discussed product/service line, place & time, promotion and pricing. Apart from these marketing mixes it has to take care of people, process & Physical evidences under extended system. Because people provide most services, the selection, training and motivation of employees can make a huge difference in customer satisfaction. In the present firm people include doctors, clinical staff, and all other employees including managers. Most of the time, employees/caregivers are more important than anyone else. So extensive precautions should be taken when we do employee selection, training, retention, productivity, rewards, and satisfaction. Care providing services such as the present firm (like other services) involve participation of the customer in the service encounter, and therefore patients are key participants. The other patients in the environment are also participants. The number, demographics, appearance, and behavior of other patients can have a dramatic impact on the service experience appreciated by an individual receiving care. Ideally, service employees should exhibit competence, a caring attitude, responsiveness, initiative, problem solving ability and goodwill. Companies often try to demonstrate their service quality through physical evidence and presentation. Maintaining the physical evidence carefully, have profound impact on customers’ impressions. In the present firm physical evidence also includes equipment and staff uniforms. Firm’s promotional materials can be thought of as providing physical evidence of practice and its services. Patients have relatively little means of judging the quality of medical services, even after they have been rendered. For this reason, patients often rely disproportionately on physical evidence as a means of assessing service quality. Similarly creating and delivering services to customer, needs an effective process. Slow & badly designed processes become ineffective in service delivery and results in not satisfied customers. This results in low productivity and increased likelihood of service failure. Patient care activities are occurring between the patient and the ancillary caregiver and between the patient and the physician. So successful review of a service process involves assessment of the time required for each step, a search for unnecessary and/or redundant steps, and estimation of the quality of service obtainable through a given process. People who are main constituent of any services are the important aspect of best services provided to customers. Most of the services depend on direct interaction between customers and firms’ employees. The nature of the interactions between them strongly influences the customers’ perception about the service quality. For the present firm, whose services are solely depends on customers and care workers interactions; the quality of the understanding of the needs of the customers, better balance and gap between required and expected services decides the performance and survival of the firm in the market place. Now in the present circumstances of the world, developed the whole world has been developed as global village. Now marketing activities and tools has to be modified according to geographical location. When we talk about local or domestic marketing we know the ethos, culture and needs of the customer but when we move into international arena, marketing takes a different shape. All the 7 Ps have to be analyzed in the new situation. Internationally products/services needs are different, their places are different and promotional activities have to be adopted according to their ethos, philosophy, culture and level of knowledge. In the international arena, pricing has to be a sensitive issue. As we know pricing has to be decided by geographical and situational factors. Rules and laws of the particular Country also decide the whole marketing mix. For the services sector where customer and employee generally interact, people and process always play a crucial role in deciding the marketing mix. Here direct involvement of customers in the service process evaluates the employees’ appearance, social skills as well as their technical skills. So Pulse Nursing &Care Ltd. has to devote special Care in selecting training and motivating those employees who will be serving customers directly. If the firm has to serve internationally then more and more, emphasis has to be put on cross-culture training of its employees. In the present setting employees has to remain in direct contact with customers, so their needs and requirement has to be taken care of properly. Managing special kind of customer needs special skills especially related to social, interpersonal and behavioral aspects. Company must take care of all these extended marketing mix tools to serve its customers properly. ************************************************************** References: 1. Drucker, Peter, Management: Tasks, Responsibilities, Practices, New York: Harper & Row, 1973, pp. 64-65. 2. Borden, Neil H. The concept of marketing mix: Journal of Advertising Research, 4(June) 1994:2-7. 3. McCarthy, Jerome, Basic Marketing: A Managerial Approach, 13th edition, Homewood, IL: Irwin, 1999. 4. Booms B. H. and Bitner, M. J. “ Marketing strategies and organizational structures for services firms”, in Marketing Services Eds. J. Donnelly and W.R. George (Chicago: American marketing association), 1981, pp. 47-51. 5. Madique, Modesto A. and Zirger, Billie Jo “ A study of success and failure in product innovation: the case of the U.S. electronics industry”, IEEE Transactions on engineering management, Nov. 1984, pp. 192-203. 6. Kotler, Philip: A Framework for Marketing Management, Pearson Education Inc., 2003. Read More