How can marketing mix build competitive advantage Essay

Defining the Marketing MixReaching Customers through the Marketing MixThe value proposition is a simple, powerful statementof value, but it is only the tip of the iceberg.How do ma

How can marketing mix build competitive advantage Essay

Defining the Marketing Mix

Reaching Customers through the Marketing Mix

The value proposition is a simple, powerful statementof value, but it is only the tip of the iceberg.How do marketing professionals ensure that they are reaching and delivering value to the target customer?

Takeyourself, as a target customer. Think about your cell phone. What would make you want to buya new one? How might the following issuesaffect your purchasing decision?

  • Features: A company hasjust released a new phone with amazing features that appeal to you.
  • Price: Youre concerned aboutthe priceis this phone a good deal? Too expensive? So cheap that you suspecttheres a catch?
  • Information: How did you find out about this phone? Did you see an ad? Hear about it from a friend? See pictures and comments about it online?
  • Customer service: Is your cell service provider making it easier for you to buythis phonewith a new plan or an upgrade?
  • Convenience: Could you easily buy it online in a moment of indulgence?

You can see there are multiplefactors thatmightinfluence your thinking and decision about what to buya mix of factors. Taken together, these factors are all part ofthe marketing mix.

Organizations must find the right combination of factors that allow them to gain an advantage over theircompetitors. This combinationthemarketing mixis the combination of factors that a company controls to provide value to its target customers.

The following video illustrates how the marketing mix changes depending on the target customer:

Evolving Definitions of the Marketing Mix

There are a few different ways the marketing mix is presented. During the 1950s the components of the marketing mix were conceived as the four Ps and were defined as follows:

  1. Product: the goods and services offered
  2. Promotion: communication and information
  3. Place: distribution or delivery
  4. Price: ensuring fair value in the transaction[1]
A graphic showing Target Market as the central piece of the 4 Ps surrounding it: Product, Price, Promotion, Place.

Today, this categorization continues to be useful in understanding the basic activities associated withmarketing.The marketing mix represents the wayan organizations broad marketing strategies are translated into marketing programs for action.

Over time, new categories of the marketing mix have been proposed. Most are more consumer oriented and attempt to better fit the movement toward a marketing orientation and a greater emphasis on customer value. One example is the four Cs, proposed by Robert F Lauterborn in 1990:

  1. Customer solution:what the customer wants and needs
  2. Communication:a two-way dialogue with the customer
  3. Convenience: an easy process to act or buy
  4. Cost: the customers cost to satisfy that want or need[2]

The four Cs include a greater focus on the customer but align nicely with the olderfour Ps. They also enable oneto think about the marketing mix for services, not just products. While it is difficult to think about hotel accommodationsas a distinctproduct, it is much easier to think about a hotel creatinga customer solution. You can see how the four Ps compare with the four Cs in the chart below:Four PsFour CsDefinitionProductConsumersolutionA 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.PriceCostPrice is only a part of the total cost to satisfy a want or a need. For example, the total cost might be thecost of time in acquiring a good or a service, along withthecost of consciencein consuming it.It reflects the total cost of ownership. Many factors affect cost, including but not limited to the customers cost to change or implement the new product or service and the customers cost for not selecting a competitors product or service.PromotionCommunicationCommunications can include advertising, public relations, personal selling, viral advertising, and any form of communication between the organization and the consumer.PlaceConvenienceIn the era of Internet,catalogs, credit cards, and smartphones, often people dont have to go to a particular place 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 provideconvenience of buying.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.

Whether we referencethe four Ps or the four Cs, it is important to recognize that marketing requires attention to a range of different approaches and variables that influence customer behavior. Getting the right mix of activities is essential for marketing success.

Competitors and the Marketing Mix

The challenge of getting the right marketing mix is magnified by the existence of competitors, who exert marketpressures using strategies defined by their marketing mix alternatives. Remember, the purpose of the marketing mix is to find the right combination of product, price, promotion, and distribution (place) so that a companycan gain and maintain advantage over competitors.

Components of the Marketing Mix


Purple hexagon with the following text in the center: Product: What solution does the customer want and need. Outside the hexagon, to the right, is a list of considerations: features, design, user experience, naming, branding, differentiation

In the marketing mix, the term product meansthe solution that the customer wants and needs. In this context,we focus on the solution rather than only on the physical product. Examples of the product include:

  • The Tesla Model S, a premium electric car
  • A Stay at a Holiday Inn Express, a low-price national hotel chain
  • Doritos Nachos Cheese, a snack food
  • Simple, an online banking service

Each of these products has a unique set of features, design, name, and brand that are focused on a target customer. The characteristics of the products are different from competitors products.

Screen shot of website showing the convenience of the banking services they offer: the Visa card, ATM access, "powerful reporting," and photo check deposits.



Green hexagon with the following text in the center: Promotion: What is the dialogue between customer and company? Outside the hexagon, to the right, is a list of considerations: Message; method of delivering message, timing of delivery; communications by customers and influencers; competitor promotions.

In the marketing mix, the term promotion refers to the communications that occur between the company and the customer.Promotionincludes both the messages sent by the company and messages that customers send to the public about their experience. Examples of promotion include:

  • An advertisement in Cooking Light magazine
  • A customers review of the product on Tumblr
  • A newspaper article in the local paper quoting a company employee as an expert
  • A test message sent to a list of customers or prospects

Marketing professionals have an increasingly difficult job influencing promotions that cannot be controlled by the company. The companys formal messages and advertising are only one part of promotions.

facebook logo plus their slogan: "Like us on facebook."

Marketers often run social media campaigns, rewarding customers who Like the company on Facebook.


Orange hexagon with the following text: Place: how does the customer act or buy? Outside the hexagon, at the right, is a list of considerations: location of purchase, ease of transaction, access to distribution channels, sales force, competitor approaches

In the marketing mix, the term place refers to the distribution of the product. Where does the customer buy the product?Place might be a traditional brick-and-mortar store, or it could be online.Examples include:

  • Distribution through an online retailer such as
  • Use of a direct sales force that sells directly to buyers
  • Sales through the companys Web site, such as the shoe purchases at
  • Sales by a distributor or partner, such as the purchase of a Samsung phone from Best Buy or from a Verizon store

In todays world, the concept of place in the marketing mix rarely refers to a specific physicaladdress. It takes into account the broad range of distribution channels that make it easy for the target customer to buy.

How can a company like Starbucks that sells hot drinks from a storefront use mobile technology to improve distribution? Watch the video, below, to find out:


Turquoise hexagon with the following text in the middle: Price: what is the cost to the consumer? Outside the hexagon, at the right, is a list of considerations: value to buyer, price sensitivity, existing price points, discounts, competitor pricing

In the marketing mix, the term price refers to the cost to the customer.This requires the company to analyze the products value forthe target customer. Examples of price include:

  • The price of a used college textbook in the campus bookstore
  • Promotional pricingsuch as Sonic Drive-Inshalf-price cheeseburgers on Tuesdays
  • Discounts to trade customers, such as furniture discounts for interior designers

Marketing professionalsmust analyze what buyers are willing to pay, what competitors are charging, and what the price means to the target customer when calculatingthe products value. Determiningpriceis almost always a complicated analysis that brings together many variables.

Sonic Cheeseburger ad

Sonic offers discounts on cheeseburgers on Tuesday, which is typicallya low sales day oftheweek.Source:

Finding the Right Marketing Mix

Rows of fancy hair products shown on backlit glass shelves.

How does an organization determine the right marketing mix? The answerdepends on the organizations goals. Think of the marketing mix as a recipe that can be adjustedthrough small adjustmentsor dramatic changesto support broader company goals.

Decisions about the marketing-mix variables are interrelated. Each of the marketing mix variables must be coordinated with the other elements of the marketing program.

Consider, for a moment, the simple selection of hair shampoo. Lets think about three different brands of shampoo and call them Discount, Upscale, and Premium. The table below shows some of the elements of the marketing mix that impact decisions by target customers.DiscountUpscalePremiumProductCleansing product, pleasant smell, low-cost packagingCleansing product, pleasant smell, attractivepackagingCleansing product, pleasant smell created by named ingredients, premiumpackagingPromotionFew,if any, broad communicationsNational commercials show famousfemale customerswith clean, bouncy hairDifferentiating features and ingredients highlighted(e.g., safe for colored hair), as well as an emphasis on the science behind the formula. Recommended by stylist in the salon.PlaceDistributed in grocery stores and drugstoresDistributed in grocery stores and drugstoresDistributed only in licensedsalonsPriceLowest price on the shelfHighest price in the grocery store (8 times the prices of discount)3to 5 times the price of Upscale

A number of credible studies suggest that there is no difference in the effectiveness of Premium or Upscale shampoo compared withDiscount shampoo, but the communication, distribution, and price are substantially different. Each product appeals to a very different target market. Do you buy your shampoo in a grocery store or a salon? Your answer is likelybased onthemarketing mix that has most influenced you.

An effective marketing mix centers on a target customer. Each element of the mix is evaluated and adjusted to provide unique value to the target customer. In our shampoo example, if the target marketisaffluent women who pay for expensive salon services, then reducing the price of a premium product might actually hurt sales, particularly if it leads stylists in salons to question the quality of the ingredients. Similarly, making the packaging more appealing for a discount product could have a negative impact if it increases the price even slightlyor if it causes shoppers to visually confuse it with a more expensive product.

The goal with the marketing mix is to align marketing activities with the needs of the target customer.

Creating and Aligning the Marketing Strategy

Inputs That Inform Marketing Strategy

To a great extent, developing the marketing strategy follows the samesequence of activities used todefine acorporate strategy. The chiefdifference is that the marketing strategy is directly affectedby the overall corporate strategy; that is, the marketing strategy needs to work withnot apart fromthe corporate strategy. As a result, the marketing strategy must always involve monitoring and reacting to changes in the corporate strategy and objectives.

In order to be effective, a marketing strategy mustcapitalize onthe resources at its disposalwithin the company, but also takeadvantageofthe market forces that are outsidethe company. One way to assessthese different factors, or inputs, is by conducting a situation analysis (also called a SWOT analysis). As you recall, aSWOT analysisincludes a review of the companys internalstrengths and weaknesses and anyexternal opportunities and threats that it faces.

Centering on the Target Customer

The marketing strategy defines how the marketing mix can best be used to achieve the corporate strategy and objectives.The centerpiece of the marketing strategy is the target customer. While the corporate strategy may have elements that focus on internal operations or seek to influence external forces, each component of the marketing strategy is focused on the target customer.

Recall the following steps ofdeterminingwhoyour target customer is:

  1. Identify the business need you will address, which will be driven by the corporate strategies and objectives;
  2. Segment your total market, breaking down the market and identifying the subgroup you will target;
  3. Profile your target customer, so that you understand how to provide unique value;
  4. Research and validate your market opportunity.

Focusing the marketing strategy on the target customer seems like a no-brainer, but often organizations get wrapped up in their own strategies, initiatives, and products and forget to focus on the target customer. When this happens the customer loses faith in the product or the company and turns to alternative solutions.

The Market Planning Process: vertical Flowchart with 7 layers. From top, Layer 1 Corporate Mission [highlighted in gold] points to Layer 2 Situational Analysis [blue], points Layer 3 Internal Factors: Strengths & Weaknesses and External Factors: Opportunities & Threats [blue], points to Layer 4 Corporate Strategy: Objectives & Tactics [blue]. Layers 2-4 are connected with gray lines, as one sub-unit. This points to Layer 5 Marketing Strategy: Objectives & Tactics [blue], to Layer 6, a graphic showing Target Market as the central piece of the 4 Ps surrounding it: Product, Price, Promotion, Place [all blue]. The final layer is Implementation & Evaluation [blue]. Layers 5-7 are connected with gray lines, as a second sub-unit.

Aligning Corporate and Marketing Strategies

Objectives can create alignment between corporate and marketing strategies. If the corporate objectives are clearly defined and communicated, they can guideand reinforce each step of the marketing planning process.

How would good corporate-level objectives inform the marketing strategy and objectives?Consider the following examples:

  1. Imagine completing a market segmentation process. You find a target market that will find unique value in your offering. The decision to pursue that target market will depend on whether that segment is large enough to support the corporate objectives for market growth.
  2. How many new products should the company launch this year? The answer should be informed by the corporate objectives for growth and profitability.
  3. The marketing function has identified a customer relationship management campaign that would create greater customer loyalty. Does the cost of the campaign and its expected returns align with the company objectives?

As you can see, company objectives provide important guidance to the marketing planning process. Likewise, marketing objectives ensure that the goals of the marketing strategy are defined, communicated, and measured.

Check Your Understanding

Answer the question(s) below to see how well you understand the topics covered above. This short quiz does not count toward your grade in the class, and you can retake it an unlimited number of times.

Use this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.

  1. McCarthy, Jerome E. (1964). Basic Marketing. A Managerial Approach. Homewood, IL: Irwin.
  2. Lauterborn, B. (1990). New Marketing Litany: Four Ps Passé: C-Words Take Over. Advertising Age, 61(41), 26.

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