The Aspects of Marketing Mix - Coursework Example

Introduction Every dollar spent today has to go towards growth and every investment has to be made based on facts. In the ever changing market conditions, the marketers have to actively pursue new growth opportunities in more systematic ways (Wise & Sirohi, 2005). Every investment has to be analyzed from the perspective of return-on-investment (ROI). Even customer segmentation decisions are based on facts that would accelerate and maximize growth in any region. One has to look beyond the previous years’ figures and the competitors’ spending budgets. The right data and the right analysis can help the companies to adjust the marketing mix to meet the needs of two contrasting international markets while generating equal or better profits. The factors that have to taken into account are the right data, technology, the culture and the return on investment. The Marketing mix The marketing mix or the four Ps that translated marketing planning into practice were formulated by McCarthy in 1964. These include the product (now includes services also) tailored for maximum customer benefit, priced according to the buyer’s ability to afford the product, available at a place convenient to the customer and promoted to attract the potential customers in the right way (Bennett, 1997). Thus the marketing mix of any product would include the right product at the right time in the right place with the right sales and promotion strategy and at the right price. In 1967 Kotler broadened this classification to include customer, environmental, competitive and marketing decision variables. According to the American marketing Association, ‘marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange and satisfy individual and organizational objectives’ (Grönroos, 1997). Bennett states that people and organizations have wants and needs and it is the duty of the marketing to recognize and respond to these needs. When organizations apply the marketing mix principle, targeting the customer involves giving value in relation to quality, value for money, reliability, product performance and cost effectiveness. Marketing in an organization is usually left to a specialized department who are responsible for planning and implementation of various marketing tasks, such as market analysis, marketing planning, advertising, sales promotion, sales, pricing, distribution and product packaging (Grönroos). Of late, the utility of the four Ps of the marketing mix as a general marketing theory for practical purposes has become questionable. There is a shift towards relationship marketing. Necessity to adjust marketing mix elements Internationalization and globalization have led the multinational companies to adjust to an entirely different marketing strategy. Globalization views the world as a uniform market like Levi’s jeans and Coca-Cola. In internationalization marketing strategies have to be customized according to cultural, regional and national differences. McDonalds Corp. is well placed in international markets to expand and take advantage of economic growth (Orji, 2005). Analysts predict that by 2010 the fast food segment will account for half of all food service growth during the first decade of the 21st century. Despite this, they had to adjust to the local tastes and needs of the customers. Adjusting the Product mix McDonalds wanted to standardize the items that taste the same whether in Singapore, Spain or South Africa (Vignali, 2001). This could have resulted in substantial cost savings but McDonald’s realized that they have to adapt to local environment. Therefore they adopted the principle of ‘think global, act local’. McDonald’s has had to adopt the local taste, laws and customs. While in Israel Big Macs are served without cheese in several outlets, in India they serve vegetable McNuggets and a mutton-based Maharaja Mac. As Hindus do not eat beef, Muslims do not eat pork and Jains do not eat meat at all, such adaptation becomes necessary. In Malaysia and Singapore they had to undergo rigorous inspection by Muslim clerics to ensure ritual cleanliness. In Germany they sell beer while in Turkey chilled yoghurt drinks are available. They sell Teryaki burgers in Japan and vegetable burgers in the Netherlands. These demonstrate how a company needs to adapt its product offer in international environment. Kellogg’s, the largest ready-to-eat cereal manufacturer in the world also had to alter their marketing mix in order to meet the needs of the international markets (Vignali, 2001a). They faced two critical advantages in meeting the global tastes. Their products are available in several countries and the manufacturing techniques have been standardized giving the product their unique and uniform taste across the globe but the texture and appearance of the product differs cross countries. Due to trade constraints and geographical limitations, the corn that is used in USA and Europe differ. Then, one of their products, Coco Pops are produced using Rice Krispies as the base. This is used uniformly in all the countries but the chocolate coating placed on the product is altered according to the taste of the region. The Spanish prefer a sweeter type of chocolate than the consumers in Greece and the UK. Thus, the company had to adjust to meet the needs of the two contrasting markets. Homogenous world culture does not work when companies have to market their products globally. In India cereals are not traditionally eaten at breakfast and to enter the Indian market, Kellogg had to first change the eating habits. In Brazil, cereals are eaten as a dry snack so the company had to alter their marketing initiatives and promoted cereals as an all-day food and as a health snack alternative. Adjusting the Promotion mix Promotion consists of advertising, direct marketing, sales promotion, public relations and personal selling. With the help of these tools, McDonald’s adopts the local marketing communications strategy. They cannot afford to ignore the local markets and they need to analyze the consumers’ attitude towards its product, usage pattern, and moral and religious considerations. In different countries they use local celebrities in their advertising campaign to get the same message across. In East Asia they appeal to the younger generation while in Beijing it is pointless using television as a media to advertise as the commercials are shown only between two programs. McDonald’s associates itself with sports events like Olympics and the World Cup and uses this platform to convey its message. In the USA it concentrates on the Basketball events which becomes country specific. To maintain public relations, in USA it substitutes technology for human workers but in Beijing they have to rely on personal interactions with customers. They also understand that British do not require any public relations and would be happy to eat and leave the restaurant. At the same time, they use the particular ad campaign globally. McDonalds stands for fast food and they own the breakfast segment. Its new ad campaign is "im lovin it," and they use this globally. The aim behind this campaign and this business strategy is to connect with customers in highly relevant and culturally significant ways around the world (Maddox, 2003). Through this campaign they want to rekindle the emotional bond that the McDonalds customers have. It also depicts how the people live, what they love about life and what they love about McDonalds. According to Vignali, the promotion element in the international marketing mix contains more than just branding and advertising. Simply translating into local language does not suffice. Various macro economic factors have to be taken into account which includes the government controls, the media availability, economic differences, local distributors, tastes and attitudes and availability of agency. Kellogg was promoting its products under one umbrella branding having a globally standardized image but each product had a domestic name. When they renamed the Coco Pops into Choco Krispies, feedback indicated that the children in UK preferred the old name. through TV advert, they invited viewers to cast their vote or contact a specially constructed website. The results suggested that 85% people preferred Coco Pops so they reverted back to that name in UK. The brand name can be globalised but the advertising has to be localized for evcey product. Media cannot be used as the medium of advertising in every country for the same product. The effectiveness of advertising will be reduced if TV is used as the media for both the US and India (Vignali). In US one in two people have the television whereas in India one in 50 would have television. Even the readership of newspapers and magazines differs across regions and nations. The corporate slogan that Kellogg uses is “If it doesn’t say Kellogg’s on the bob, it isn’t Kellogg’s in the box”. Through this slogan they want to differentiate their products by emphasizing that they do not make or package cereals for anyone else but this backfired in Germany. The largest buyers in Germany were Aldi supermarket chain who took as much as 30% of the German production. They announced that they would not market the products of Kellogg in their own packaging unless such slogans were stopped in Germany. As a sales promotion technique, Kellogg gave a free sample with every 750g pack of Cornflakes in Europe but this was fou8nd to be less productive in Australia and was not offered at all in the USA where the market is very price sensitive. As far as personal selling is concerned, while the markets or the consumers do not require it in the West, markets like China and India require it. In the growth stage of the product, in the developing markets, the salesmen share more of a total promotional effort. Adjusting marketing mix due to culture change Local culture plays a dominant role in deciding on the product in the international market. Before venturing into a new market, firms should have a comprehensive knowledge of who they are targeting as perceptions and thoughts vary between cultures. They must have good understanding of the communications channels that influence individual purchasing decision (Lee & Tai, 2006). Lack of coffee culture in China prevented Nestle of Switzerland to attain success in China. They hence adopted a diversification strategy and bought Chinese brands offering products like water, seasonings, and milk (Hara & Nakanishi). Vodafone is the worlds biggest wireless operator and one of worlds largest companies by market capitalization. Vodafone was an aggressive exporter and had clearly defined plans and the strategy. In Japan they have been unsuccessful because their handsets did not match the local culture. They learnt the hard way that to survive in the market they would have to tailor-make the handsets and not use the global model. Other factors that influence adjusting marketing mix Multinationals, before venturing into a foreign market have to take into consideration various factors like the macro environment, which include government regulations and policies and demographics. Other complexities and uncertainties include the consumer behavior. The marketing mix needs to be altered to suit the macro environment of the market. In response to the liberalization and the reforms in China, Motorola decided to enter altering its policies and marketing mix. Since local competition was massive in the low-priced segment, in China, Motorola targeted the high-end users (Hara & Nakanishi, 2004). It could capture the sophisticated, wealthy, and young users due to its innovative design. Marketing of services Marketing of services is becoming competitive, organizations are becoming global in their outlook and barriers are becoming insignificant as information technology reduces the physical distance. Marketing of services employ the same principles of the marketing mix even though the product is intangible. Just as culture has to be taken into consideration when marketing products like pizzas, even in the hospitality sector marketing of rooms in a hotel have to consider the cultural framework of the region. The Hyatt International Hotel Group uses the familiar cultural framework as its basis for planning and providing a high-quality product. As such in Japan, the layout of the bathrooms reflected the Japanese style (Teare, 1993 cited by Hope & Mühlemann, 2001). The group’s senior management team represents eight different cultures which helped them to evaluate and incorporate the national culture right from the planning stage. The environment, the décor, the work culture have all to suit the local needs in the service industry. The Great Wall Sheraton Hotel Beijing is a joint venture enterprise between the American ITT Sheraton Corporation and various Chinese business partners, and operated through a management contract under the brand name of ITT Sheraton Hotels and Resorts. ITT Sheraton’s global reputation for service excellence and quality requires the Beijing hotel’s commitment to quality and customer satisfaction (Mwaura, Sutton & Roberts, 1998). The Great Wall Sheraton Hotel has its own distinct US-influenced corporate culture. US companies strongly adhere to the US cultural values of social mobility, economic achievement, closeness to the customer and productivity through people but the influence of the Chinese is present in the environment, the language, the folklore and the practices of government, business and interpersonal relations. Without these alterations, they would not have been able to succeed in China. American companies are faced with the dilemma whether or not to adapt their services to the user’s culture (McLaughlin & Fitzsimmons, 1996). For instance, Benihana restaurants have adapted the local menu but retain the original Japanese elements in terms of décor and the personnel system. A service that decides to retain its location and attract customers from around the world will have to develop the foreign language skill and cultural sensitivity of its customer contact employees. The unique feature of the location dictates the selection of the strategy. Global culture arouses feelings of disgust says Duncum (2001). Describing Euro Disney as ‘cultural Chernobyl’ expresses this disgust. Controlling the customer contact experience in a foreign culture is a challenge. When Euro Disney opened outside Paris, some concessions to French culture were made like adopting both English and French at the park. This had to be done to cater to varied visitors. The ‘Euro Disney’ theme park development demonstrates how national cultural differences can impact the transferability of a successful service delivery system between situations (Hope & Mühlemann). While it was successful in Japan, the French national culture resisted foreign influence as it was seen as diluting the French way of life despite the organization incorporating some European characteristics and facilities. While the French management and workforce support quality and excellence in services, this was seen as American arrogance. Conclusion Thus, be it a tangible product or the service sector, the marketing mix elements have to be altered to cater to the global market. Any attempts to globalize the marketing process have failed as various factors determine the marketing strategy. This ranges from the product itself which may have to be altered to the promotional strategies. Culture and traditions play a dominant role in determine the elements of the marketing mix along with the technology and the government regulations. The demands of the international customers differ and to be successful the companies have to adjust the marketing mix elements. The marketers are under pressure to meet targets with stringent budgets. Basing decisions on past performances does not suffice as the demands of the consumers are changing on a daily basis. Customers have become more demanding and particular in their needs. As such, a rational approach based on facts towards the product, pricing, place and promotion would help the marketers meet the targets. References: Azaryahu, M., (1999), McDonalds or Golani Junction? A case of contested place in Israel, Professional Geographer, 51 (4) pp. 481-492 Bennett, A. R., (1997), The five Vs – a buyer’s perspective of the marketing mix, Marketing Intelligence & Planning 15/3 [1997] 151–156 Duncam, P. (2001), Theoretical Foundations for an Art Education of Global Culture and Principles for Classroom Practice, 02 Dec 2006 Hara S & Nakanishi K (2004), AT10 Research Conference, The Asia Strategies of Japanese Corporations, 29 Jan 2008 Hope, C. A. & Mühlemann, A. O. (2001), The impact of culture on best practice production/operations management, International Journal of management Reviews, Vol. 3 No. 3 pp. 199-217 Keel, R. 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Vignali, C., (2001), McDonalds: "think global, act local" - the marketing mix, British Food Journal, Vol. 103 No. 2, 2001. pp. 97-111 Vignali, C., (2001a), Kelloggs Internationalization versus globalization of the marketing mix, British Food Journal, Vol. 103 No. 2, 2001. pp. 112-130 Wise, R., & Sirohi, N., (2005), Finding the best marketing mix, JOURNAL OF BUSINESS STRATEGY, VOL. 26 NO. 6 2005, pp. 10-11 Read More