The Marketing Mix: From Products to Life Enhancing Experiences [PDF]

The Marketing Mix: From Products to Life Enhancing Experiences 1. Introduction The marketing mix has been a staple tool since the phrase was coined by Neil Borden during his American Marketing Association presidential speech in 1953 (AMA, 2011). Criticised for its FMCG roots, amongst other issues (Kent, 1986; Grönroos, 1994), since then the concept has undergone revision and adaptations (Van Waterschoot and Van den Bulte, 1992). This conceptual paper seeks to continue that tradition of update and revision by reconceptualising the concept of the marketing mix in the manner of (Chekitan and Schulltz, 2005) in the context of the management of the customer experience (Palmer, 2008). A model is proposed that updates the traditional marketing mix in an attempt to make it more reflective of practice where marketing organisations are introducing a degree of experience and even theatre into their activities (Pine and Gilmore, 1999). The model is a response to a teaching problem when exploring ways to help students understand why some shopping experiences feel different to others. In the classroom, students found the model a useful device to help analyse the marketing activities of organisations which have intangible aspects to their offerings. Following positive student responses, the model has been further developed, positioning it as part of an on-going evolution and update of the marketing mix (Dominici, 2009). An important further purpose of the paper is to gain colleagues’ feedback regarding the usefulness of the model as an aid to understanding and teaching and to gain comments regarding its future development. 2. The Evolution of the Marketing Mix as Demand Influencing Activities As a planning, learning and teaching aid the marketing mix has been popular with practitioners, teachers and students for some time (Dev and Schultz, 2005: Dennis et al, 2005: Dominici, 2009). Based on McCarthy’s (1960) formulation of Borden’s (1953) original concept (which itself was based on an earlier idea by Culliton in 1948 (Baker and Saren, 2010)) the 4Ps has been a business school and practitioner staple, tactically deployed in order to create or exceed customer satisfaction (Jobber, 2007). Some writers argue that it would be difficult to imagine marketing without the mix (Ellis et al, 2011). With the rise of service industries and an acknowledgement that the traditional 4Ps were not fully appropriate in this context, came the 7Ps (Booms and Bitner, 1981) as an attempt to solve the problems associated with the marketing of intangible services. The 7Ps retained the original 4Ps and added three further elements (physical evidence, process and people, the latter generally accepted as referring to employees but arguably including customers cocreating value as in service-dominant logic (Vargo and Lusch, 2008)). Lauterborn (1990), concerned that the 4Ps represented a narrative essentially internally focused on the marketing organisation rather than on the customer, proposed the 4Cs, with place becoming convenience, product becoming customer value and benefits, price becoming customer cost and promotion becoming customer communication, with C replacing P to suggest greater emphasis on the customer. It is possible that this is the first example of the marketing mix being evolved by retaining the original concept but extending the concept to a new narrative by mapping each of the Ps across to a new set of closely related ideas but changing the initial letter to represent the new narrative. Extending the logic of the previous 4Ps to 7Ps evolution, Beamish and Ashford, (2006) (but based a on previous CIM model dating to 1998) developed the 7Cs model with the addition of coordination to replace process, consideration to replace people and, confirmation to replace physical evidence. Brunner (1989) also suggested a different 4Cs model this time comprising concept, cost, communications and channels, to take account of the marketing of ideas and brands in addition to products and services. The SIVA model was proposed by Dev and Schultz (2005), 1

with solution replacing product, information replacing promotion, value replacing price and access replacing place. What these models have in common is that they all represent a tactical toolkit of marketing activities that can be controlled and mixed to appeal to specific customers (Kotler et al, 2008, Dibb and Simkin, 2009). They represent a combination of specific marketing demand influencing instruments designed to achieve desired responses from target customers (van Waterschoot and de Haas, 2008). However, according to Baker and Saren (2010), not all marketing instruments should be viewed as demand influencing elements of the marketing mix. Some instruments have secondary functions and other organisational functions facilitate, support and inform marketing instruments. In this sense the model proposed later in this paper recognises the idea that the marketing mix concept can be applied to marketing situations in any context, acknowledging that many of these contexts can be very different, but concentrates on marketing instruments which are seen as demand influencing (Van Waterschoot and Foscht, 2010). To address these differing contexts other marketing mix models have been proposed, such as Dennis et al’s (2005) Seven Cs, Nelson’s (2010) ISAIAH , Resnick and Cheng’s (2011) 4Ps for SMEs model and a variety of internet marketing mixes such as Chen (2006), Pastore & Vernuccio, (2004) and Kalyanam & McIntyre (2002) (all three cited in Dominici, 2009). However, because they include nondemand influencing elements they have not been included in the mix evolution in this paper. Specifically the model concentrates on the experience inducing role of the mix in order to influence demand. 3. Experience Marketing or Experiential Marketing? The term experiential marketing is in common use, particularly as services become commodities (McGoldrick, 2002); a Google search of the term produces over two million hits. Many of these relate to practitioner agencies engaged in experiential marketing strategies and solutions. However, the definition of experiential marketing is not commonly agreed. A typical definition from the practitioner perspective is: “Experiential marketing is about providing a brand experience where consumers can interact directly with a brand.” (Marketingminefield.co.uk, 2011). Similarly, “experiential marketing is the art of creating an experience where the result is an emotional connection to a person, brand, product or idea”. (Twofeetinthesand.com, 2011). In this context experiential marketing appears to refer to an event, often one-off, designed to promote a product or idea to influence awareness or perception. “It's the difference between telling people about features of a product or service and letting them experience the benefits for themselves” (The Experiential Marketing Forum, 2011). This is supported by Emerald (2008, p1) which describes experiential marketing as the creation of “a brand environment in a public space and involving potential consumers by asking them to take part in an activity.” With reference to the 4Ps it appears that experiential marketing in this sense is simply one of the tools of the promotional mix. Experiential marketing is not about the real, everyday customer experience but is a promotional device to increase awareness and improve brand image and loyalty, often delivered as a one-off campaign. In this context it can hardly be regarded as an approach or a strategy. There is also some confusion over the meaning of the terms experience marketing and experiential marketing, with practitioners often using the terms interchangeably (see Marketing Minefield, 2011). Further, academics define experiential marketing differently to practitioners: “experiential marketing is the term used to describe marketing activities that involve the creation of experiences for consumers” (Jobber and Fahy, 2009, p159), whilst Pine and Gilmore (1999) discuss how organisations use services as the stage and goods as props to create memorable experiences. These definitions do not appear to limit experiential marketing to the realm of exclusively promotional activity. There is here a distinction between experience marketing (for want of a better term) and experiential marketing. 2

Experience marketing in the sense meant here involves the entire marketing mix rather than a part of the promotional mix. Experience marketing refers to the customer’s everyday experience of dealing with an organisation and refers to how an organisation’s delivery of the marketing mix can enhance the customer’s experience. This in turn, leads to increased loyalty, sales and profit (Smith and Wheeler, 2002). But unlike experiential marketing it is not a one hit activity and is concerned with the customers day-to-day experience of dealing with the organisation (Abraham, 1981). Experience marketing encompasses the entire marketing mix; the design of marketing activities to achieve competitive advantage through experiences. Writers have concluded that the mix must evolve (Dominici, 2009) and have reported dissatisfaction with the traditional mix (Rafiq and Ahmed,1995, Dev and Schultz, 2005). The importance of the customer’s experience in building competitive advantage has been acknowledged (Pine and Gilmore, 1999) and has been shown to encourage customer loyalty (Voss, 2004). Lindgreen et al (2009) question how marketing practices can adapt to create the memorable experiences now seen as important and (Dibeehi, 2012) contends that through the application of the traditional mix businesses have been good at addressing rational engagement but not emotional engagement. The rational for addressing this is that emotional involvement and non-utilitarian aspects of consumption have come to the fore (Arnould and Thompson 2005), now including fantasies, feelings, and fun (Holbrook and Hirschmann, 1982) and the traditional mix has not equipped practitioners well to deal with this shift. Poulsson and Kale (2004) contend that the marketing of experiences should be seen as different to services, rendering the services mix ineffective in this regard. Tauber (1972), cited in McGoldrick (2002), suggested that shopping has an experiential value beyond the utilitarian obtaining of goods whilst back in the 1970s Toffler (1970) suggested that for consumers experiences would become as collectable and important as products. Experience is perceived both rationally and emotionally (Dibeehi, 2012). It is highly subjective, rich in emotion and symbolic meaning (Holbrook and Hirschmann, 1982) and models to help with the understanding of consumer experiences have been proposed. Schmitt (1999) suggests there are five strategic experiential elements: sense (sensory), feel (emotions), think (engaging customers), act (inducing action) and relate (identity). More recently Pine and Gilmore (1999) propose four realms of experience: 1. Passive participation / entertainment / adsorption, 2. Active participation / educational / adsorption, 3. Active participation / escapist / immersion, 4. Passive participation / esthetic (aesthetic) / immersion. More recently Allen, Reichheld, and Hamilton (2005) proposed their 3 Ds model to encompass the design and delivery of customer experiences and the need for organisation to continue to develop their capability to achieve this. Although writers have called for the mix to evolve to account for the importance of the customer experience and models explaining the customer experience have been developed, there is currently no specific conceptualisation of the marketing mix designed to integrate the mix and the customer experience that acts as a guide to the activities involved in managing the customer experience. This paper now goes on to propose such a model. 4. The Experience Oriented Marketing Mix (see appendix 1) The proposed experience oriented marketing mix consists of the elements outlined from 4.1 onward. It must be noted that each element of the experience mix should be thought of in the context of the traditional mix element from which it has been derived. The experience elements, included to encourage a new experience narrative, have been mapped directly from the traditional 7Ps and 7Cs which are included in the brackets in each heading. This mapping may be viewed as yet another ad hoc conceptualisation of the mix (Rafiq and Ahmed, 1995). However, it should be viewed not as an alternative to the mix but as a way of encouraging practitioners to consider the customer experience and to consider how the traditional mix is capable of being used to induce rational and emotional demand. 3

4.1. Life Enhancing (product/customer benefit): products and services are seen as providing customers with some form of solution. These solutions may be purely rational but equally may well have a strong emotional element. Schmitt and Van Zutphen (2012) view experiences as providing pleasure and positive emotion and should address values and meaning. In this sense the organisation’s offering is no longer simply a collection of tangible benefits but becomes something that enhances the customers life and provides meaning (Otto and Ritchie, 1996). Viewed this way the benefit, or solution, becomes the sense in which the customer’s life has been enhanced. This can be tangible in the sense of product performance, which just makes life easier, or intangible in the sense of how the product / brand makes the customer feel and is often a combination of the two. BMW now promote their cars by promising joy and fun as the benefit. The enhancement of life is related to Schmitt’s (1999) experiential strategies of sense and feel and Pines and Gilmore’s (1999) esthetic. The term “life Enhancing” appears a suitable evolution of the words product or benefit. 4.2. Enjoyable Experience Expertly Executed (process/coordination): besides being efficient and well-coordinated, experiences should be enjoyable. Dibeehi (2011) calls for organisations’ processes to be designed to enhance the customer’s experience and Yudelson (1999) pictures the mix as part of a performance. Grove, Fisk and Bitner, (1992) stress the importance of business processes that the customer must engage with as important in dramatizing the customer experience. Here the marketing mix is not deployed simply to help the customer put up with the organisation’s processes but to provide the customer with something that is in itself worth experiencing. Crucially it is delivered with competence and via cross-functional co-operation (Allen, Reichheld, and Hamilton, 2005). Cooperative Funeral Care now stress that the pain of something as difficult as a funeral can be eased when handled well. This element of the mix is analogous to Schmitt’s (1999) feel and think and Pine and Gilmore’s (1999) entertainment and escapist realms. When viewed as a means to promote the customer’s experience it seems reasonable to think of process as something that should be an “Enjoyable Experience” that is “Expertly Executed”. 4.3. fair Exchange (price / cost): personally relevant experiences provide customers with meaningful utility (Poulsson and Kale, 2004). Marketers need to consider not just the price of the product, nor the total cost to the customer, cost being both tangible and psychological but the way the tangible and intangible benefits and experiences combine to create meaningful value. This recognises all that the customer believes they have to gain from the offering; the balance between what must be given up by the customer and the extent to which they receive life enhancing benefits. For example, shopping at Waitrose may be seen an affordable treat to make the consumer feel special (Schmitt and Van Zutphen 2012). It complies with Schmitt’s (1999) concepts of feel and relate and Pine and Gilmore’s (1999) absorption and immersion. “Fair Exchange” puts the customer at the heart of the issue more effectively than price or cost and seems to be a realistic way to think about this element of the mix. 4.4. Easy (place/convenience): marketers should consider what channels and methods of distribution work best for the customer. In this age of commodity channels and internet driven retailing, often the easiest becomes the consumer’s choice. This ease of doing business may relate to physical barriers such as delivery times but is equally relevant for intangible barriers such as the degree to which the organisation’s values are aligned with a individual customer’s values (Nijs, 2003); if they are similar, the customer is more likely to find it psychologically easy to give that business their custom. The Bank Machine Company now has £5 only machines because it is believed to help people budget better (BBC, 2012). This relates to Schmitt’s (1999) act strategy and Pine and Gilmore’s (1999) active and passive participation. Making things “Easy” seems a reasonable determinate of experience. 4.5. Enough Experts (people/consideration): the 7Cs encouraged marketers to employ people with the right attitudes in order to show customers due consideration. This is now a 4

basic expectation; customers are looking for people who can provide expert advice and who are available and accessible. Cotswold Outdoors and Evans Cycling employ people with the same hobby as their customers. Grove, Fisk and Bitner, (1992) discuss the need for an increased attention to the impact that staff can have when managing the customer’s experience. Smith and Wheeler (2002) state that what companies do is how customer experience their offerings. In order to have a good experience customers must feel involvement, be given information and be treated seriously by organisational personnel (Otto and Ritchie, 1996). This can be thought of in terms of Schmitt’s (1999) relate concept and Pine and Gilmore’s (1999) education and active participation realms. As an experience oriented evolution of people and consideration, the term “Enough Experts” captures the spirit of the marketing intention. 4.6. Engage and Educate (promotion / communication): the media, the message, the tone, the colour, the language and so on of all marketing communications need to align with customers’ expectations and should be personally relevant (Poulsson and Kale, 2004). Organisations must deliver experiences that complement customers’ lifestyles and aspirations (Smith and Wheeler, 2002) and help improve their lives as a result of engaging with the organisaton’s products. Jensen (1999) contends that organisations should have credible stories that are in keeping with customers’ aspirations, hopes and dreams and aligned with their values. This can be thought of in terms of Schmitt’s (1999) feel, think and relate strategies and Pine and Gilmore’s (1999) education and active participation realms. Messages are delivered by an organisation’s communications mix, all parts of which should seek to “engage and educate” the customer to match, aspirations and values and help create meaning for them. Zone3, the manufacturer of high-end triathlon wet suits includes elite coaching sessions, training and nutrition education and racing advice in the cost of their top of the range suits. 4.7. Endorsement (Physical evidence / confirmation): Physical evidence provides confirmation of the claims made by marketers. Although it is crucial in managing experiences (Grove, Fisk and Bitner, 1992) and still plays an important part in the mix, customers understand that it is employed by the organisation to be persuade. Customers now look to other sources for reassurance. The positive media and online messages regarding the John Lewis Christmas adverts and the awards enjoyed by the retailer provide endorsement of the company’s affordable premium credentials, enhancing the customer’s experience of the brand (The Guardian, 2011; The Mirror, 2011; The Mirror, 2012; The Telegraph, 2011; Mintel 2012a, Mintel, 2012b). This element of the mix relates to Schmitt’s (1999) act and relate strategies and Pine and Gilmore’s (1999) adsorption and immersion realms. Organisation now need to think beyond their own self-generated symbols of confirmation and consider the “endorsement” of their offering by other customers and experts. 5. Conclusions and Recommendations The model could provide guidance to managers seeking to concentrate on the customer’s experience as a source of competitive advantage. As a teaching tool it may be useful in helping students to analysis and understand the marketing activities of orgaisations that focus on the customer’s experience. This paper is a conceptual piece and although it draws on theory is based on observation rather than detailed research. Therefore, it may be desirable to expose the model to robust research to better understand its application to a variety of organisations, including those that have not been successful at managing the customer experience. Additionally, it would be useful to apply the model, through research, to a variety of other organisational settings, business, not-for-profit, public sector and so on. Feedback from colleagues, concerning the usefulness of the model, is actively sought and would be an aid to the further development of the model.

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Appendix 1 – The Experience Oriented Marketing Mix

The Marketing Mix from products to experiences. Borden, 1953, and McCarthy 1960

The “4Ps” – Product oriented

Booms and Bitner, 1981

The “7Ps” – Service Oriented

Beamish and Ashford (CIM), 2007, based on earlier work

The “7Cs” – Customer Oriented

SIVA Customer Focused Mix

The “7Es” – Experience Oriented

Life Enhancing

Product

Customer benefit

Process

Coordination

Price

Price

Cost

Value

Fair Exchange

Place

Place

Convenience

Access

Easy

People

Consideration

Promotion

Communication

Physical evidence

Confirmation

Product

Promotion

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Dev and Schultz, 2005

Solution

Enjoyable Experience, Expertly Executed

Enough Experts Information

Engage and educate Endorsement