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  1. The essential 7 Ps and an 8th: Here is what businesses must focus on to stay in business

The essential 7 Ps and an 8th: Here is what businesses must focus on to stay in business

The man who coined the term ‘Marketing Mix’ with four elements in it was E Jerome McCarthy.

Published: December 18, 2017 3:26 AM
Marketing Mix, McCarthy, E Jerome McCarthy The man who coined the term ‘Marketing Mix’ with four elements in it was E Jerome McCarthy.

The man who coined the term ‘Marketing Mix’ with four elements in it was E Jerome McCarthy. He proposed the concept of the 4 Ps in his 1960 book ‘Basic Marketing’. He is a pivotal figure in promoting marketing thinking in the world. McCarthy’s four Ps consist of Product, Price, Place and Promotion as the main four pillars of marketing. A few years ago, Philip Kotler initiated shift from 4 Ps to 4 Cs, as of the viewpoint of customer’s perspective. The first C is Customer needs and value, which has replaced Product. Price has become Cost to the user. Place has become Convenience. Promotion has become Communication. The four Cs reflect more customer-centric marketing philosophy. The 4 Cs give useful reminders that marketers need to focus entirely on customer’s needs and customer’s wants. The marketing mix is a value-delivering tool of the marketing function. About two decades ago, when manufacturing dominated almost all progressive countries such as the UK, the US, France and Germany, the physical layout of production units such as factories was not very important to the end-consumer because they never went inside the factory. However, today’s consumers are keen to know how goods are processed, what goes into them, how safe is the product for usage, the package aesthetics, convenience of buying the product … everything matters, besides the price, of course. Customers are becoming very demanding because of e-commerce and ever-increasing substitution of products available to them.

Organisations keep escalating their value chain to multiple segments by updating their four Ps. In shopping malls, visual merchandise for a perfect presentation demands creativity because customers want an enjoyable shopping experience. Similarly, air passengers expect stimulating ambience in aircraft, perfect timings of takeoff and landing, low cost of travel, plush departure lounges, with activities for young children, good food on the flights, and efficient flight attendants. Beauty salons are expected to provide pleasant waiting areas, with attractive reading materials, access to coffee for customers, good music and, of course, good beauty products and efficient beauticians. Even hospitals today offer five-star services with good lounges, restaurants, prayer rooms and yoga instructors, all under one roof. In short, businesses must focus on customers, if they want to stay in business. Marketing as a function of business has kept progressing from time to time. In the early 1980s, it was widely acknowledged by marketers that the Marketing Mix needs continuous progression. This led to the creation of the Extended Marketing Mix by Booms and Bitner—they added three new elements to the 4 Ps. The traditional marketing mix is suitable to tangible products; the extended three elements are more applicable for service products. The extended 3 Ps are as follows:

—People: Organisations are reliant on the people right from shop floor to the managing director. Having the right people in the right place is crucial for organisational success. People are manufacturers, customers, distributors. Hence, people as an element are added to the mix.

—Processes: The delivery of a product or service is usually done with the best of management practice. The thumb rule for success of any product is when the customer pays for the product/service, he/she should feel satisfied. Process involves operational aspects such as procedures, time duration and sequence of activities leading to the consumer experience of the service. Creating an effective service process is, therefore, essential.

—Physical Evidence: This refers to the way a product, service and everything about the company appears from the outside, or is perceived by the customer. It refers to whole environment in which the service is presented and sold to consumers. It includes all the tangibles that create insights and awareness of customers. For example, consider a cafeteria where the physical evidence includes the interiors of the place, the dress up of the personnel, the recognition certificates hung on the wall, cleanliness, cutlery, efficiency of staff, presentation in menu, etc. All these work either positively or negatively in affecting the consumer experience.

Now, is there a place for an 8th P in the extended marketing mix? Some marketing experts are of the opinion that the extended marketing mix should involve productivity, which is a measure of the efficiency of a person, machine, factory, system, etc. Productivity converts inputs into useful outputs. Productivity is computed by dividing average output per period by the total costs incurred or resources (capital, energy, material, personnel) consumed in that period. It is about how well people combine resources to produce goods and services. It is about creating more from available resources, such as raw materials, labour, skills, capital equipment, land, intellectual property, managerial potential and finance. With the right combination, higher production, higher value and higher incomes can be achieved for every hour worked. Productivity helps in managing costs.

In conclusion, even after 57 years, the original concept of marketing mix cannot be ignored. It is applicable for every business every day. Jerome McCarthy’s prudent and well-thought 4 Ps—Product, Price, Place and Promotion—which Kotler said must shift to four Cs, and additional 3 Ps added to the four elements in 1981 by Booms & Bitner (People, Process and Physical Evidence) are the core of any business. In my opinion, the 8th P—Productivity—should also be added to the extended marketing mix. And a good marketer is the one who become accustomed to the Ps suitably while offering his product/service. Marketers need two qualities: be patient and observant.

Vidya Hattangadi (hattangadi.vidya@gmail.com)

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