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Journal of Marketing Management

ISSN: 0267-257X (Print) 1472-1376 (Online) Journal homepage: https://www.tandfonline.com/loi/rjmm20

The Marketing Mix Revisited: Towards the 21st Century Marketing

E. Constantinides

To cite this article: E. Constantinides (2006) The Marketing Mix Revisited: Towards the 21st Century Marketing, Journal of Marketing Management, 22:3-4, 407-438, DOI: 10.1362/026725706776861190

To link to this article: https://doi.org/10.1362/026725706776861190

Published online: 01 Feb 2010.

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Journal of Marketing Management 2006, 22, 407-438

ISSN1472-1376/2006/3-4/00437 + 31 £8.00/0 ©Westburn Publishers Ltd.

E. Constantinides1 The Marketing Mix Revisited: Towards the 21st Century Marketing

University of Twente

The paper assesses the current standing of the 4Ps Marketing Mix framework as the dominant marketing management paradigm and identifies market developments, environmental changes, and trends, as well as changing academic attitudes likely to affect the future of the Mix as theoretical concept and also the favourite management tool of marketing practitioners. It reviews the criticism on the 4P’s emanating from five “traditional” marketing areas – Consumer Marketing, Relationship Marketing, Services Marketing, Retail Marketing, Industrial Marketing – and the emerging field of Electronic Marketing.

The paper identifies two main limitations of the Marketing Mix as management tool, common in all examined domains, namely the model’s internal orientation and lack of personalisation. It also identifies several area-specific limitations and underlines the need for further research on the issue. The weaknesses identified in the study seem to support the frequently expressed suggestion that marketing scholars should focus their efforts in formulating the conceptual foundations and marketing methodologies that better address the needs of today’s and tomorrow’s marketer.

Keywords: 4P’s, Marketing Mix, Marketing Management, E-Marketing, Consumer Marketing, Retailing, Industrial Marketing, Retention Marketing, Services Marketing Introduction Few topics of the commercial theory have so intensively inspired as well as divided the marketing academia as the 4Ps Marketing Mix framework, “the Rosetta stone of marketing education” according to Lauterborn (1990). The 1 Correspondence: E. Constantinides, University of Twente, Faculty of Business, Public Administration and Technology, University of Twente, Enschede, The Netherlands, email: [email protected]

408 E. Constantinides Mix has its origins in the 60’s: Neil Borden (1964) identified twelve controllable marketing elements that, properly managed, would result to a “profitable business operation”. Jerome McCarthy (1964) reduced Borden’s factors to a simple four-element framework: Product, Price, Promotion and Place. Practitioners and academics alike promptly embraced the Mix paradigm that soon became the prevalent and indispensable element of marketing theory and operational marketing management.

The majority of marketing practitioners consider the Mix as the toolkit of transaction marketing and archetype for operational marketing planning (Grönroos 1994). While empirical evidence on the exact role and contribution of the Mix to the success of commercial organisations is very limited, several studies confirm that the 4Ps Mix is indeed the trusted conceptual platform of practitioners dealing with tactical/operational marketing issues (Sriram and Sapienza 1991; Romano and Ratnatunga 1995; Coviello et al. 2000). A large- scale study carried out among executives of 550 Dutch companies (Alsem et al. 1996) revealed that about 70% of the companies surveyed apply formal marketing planning as basis of their operational marketing plans but responsibility for the Mix decisions is divided among different departments. According to the same study market leaders trust the formal operational marketing planning based on the 4P paradigm much more than the market followers2.

The wide acceptance of the Mix among field marketers is the result of their profound exposure to this concept during college years, since most introductory marketing manuals embrace it as “the heart of their structure” (Cowell 1984) and identify the 4Ps as the controllable parameters likely to influence the consumer buying process and decisions (Kotler 2003; Brassington and Pettitt 2003). An additional strong asset of the mix is the fact that it is a concept easy to memorise and apply. In the words of David Jobber (2001): “The strength of the 4Ps approach is that it represents a memorable and practical framework for marketing decision-making and has proved useful for case study analysis in business schools for many years”. Enjoying large-scale endorsement, it is hardly surprising that the 4Ps became even synonymous to the very term Marketing, as this was formulated by the American Marketing Association (Bennet 1995).

Next to its significance as a marketing toolkit, the Marketing Mix has played also an important role in the evolution of the marketing management science as a fundamental concept of the commercial philosophy (Rafiq and Ahmed 1995), with theoretical foundations in the optimisation theory (Kotler 1967; Webster 1992). The theoretic endorsement of the Mix in its early days

2 53.1% of the market leaders consider marketing as a major input to the company’s operational planning against 39.6% of the market followers having the same opinion.

The Marketing Mix Revisited 409 was underlined by the sympathy of many academics to the idea that the chances for successful marketing activities would increase if the decisions (and resource allocation) on the 4P activities were optimised; Philip Kotler elucidated in 1967 how “mathematical programming provides an alternative framework for finding the optimal marketing mix tool that allows the optimal allocation of the marketing effort”3. The theoretical value of the Mix is also underlined by the widely held view that the framework constitutes one of the pillars of the influential Managerial School of Marketing along with the concepts of “Marketing Myopia”, “Market Segmentation”, “Product Positioning” and “Marketing Concept” (Kotler 1967; Sheth et al. 1988),

Despite the background and status of the Mix as a major theoretical and practical parameter of contemporary marketing, several academics have at times expressed doubts and objections as to the value and the future of the Mix, proposing alternatives that range from minor modifications to total rejection. It is often evident in both the academic literature and marketing textbooks that the mix is deemed by many researchers and writers as inadequate to address specific marketing situations like the marketing of services, the management of relationships or the marketing of industrial products.

The main objective of this paper is to present an up-to-date picture of the current standing in the debate around the Mix as marketing paradigm and predominant marketing management tool by reviewing academic views and criticism originating from five marketing management sub-disciplines: Consumer Marketing, Relationship Marketing, Services Marketing, Retail Marketing, Industrial Marketing. Next to these “traditional” areas the paper reviews the arguments as to the value of the mix in an emerging marketing management domain, the E(lectronic)-Marketing. Objective and Delimitation of the Research As mentioned above the objective of the study is to present a realistic picture on the current standing of an old and ongoing debate about the merits of the 4P Marketing Mix as a present and future marketing management conceptual platform. The paper highlights academic approaches and underlines the need for further research rather on the issue.

3 Philip Kotler still considers the Mix as one of the elements of the Marketing strategy, yet this approach has developed gradually over the years from the “academic” perspective (Kotler 1976) to a more “practical” one (Kotler 1984). In his more recent books the author becomes more critical by underlining one of the main limitations of the Mix namely the internal orientation arguing that” the four P’s represent the sellers’ view of the marketing tools available for influencing buyers” (Kotler 2003)

410 E. Constantinides

The most important constraints and limitations of this approach are the following:

– The marketing domains chosen. The review of the literature originating from six marketing sub-disciplines does not imply that the Mix is irrelevant for other marketing areas. The reason for selecting six areas only was purely related to the length of the study. It must be also clear that any conclusions drown are tentative and relevant for the respective areas only. Furthermore the classification is by no means meant to demarcate marketing disciplines, alternative marketing schools or alternative paradigms but rather to identify managerial situations facing distinctive as well a common practical marketing issues and problems.

– The literature classification criteria applied. The reviewed authors were assigned to one of the six domains examined, depending on the content of the article / book reviewed and its intended audience.

– The type of sources used. Attempting a review of opinions about the Marketing Mix one can turn to exclusively academic quarters or alternatively look for views based on field experience. In each case it can be argued that the approach is one-sided, either not contemplating the real world or lacking theoretical foundations. The authors reviewed in this study were limited to academic opinions published in research papers and academic textbooks.

– The fact that the – often normative – views expressed in textbooks were included in the study can be seen as a compromise to a strictly scholastic approach. There are two reasons explaining this choice. Firstly, the fact that the volume of academic research on the suitability of the 4Ps as marketing tool in the new domain of E-Marketing lacks the depth found in more traditional marketing areas; the available theoretic material is very limited due to the newness of the issue. Secondly the author believes that the inclusion of (often normative) opinions expressed in marketing textbooks leads to a more pragmatic and comprehensive picture of the Marketing Mix debate.

Review of a Marketing Management Paradigm: The Backgrounds of the Debate Developments on the commercial landscape and changes in consumer and organisational attitudes over the last four decades, have frequently prompted marketing thinkers to explore new theoretical approaches addressing specific marketing problems and expanding the scope of the marketing management theory. The most important landmarks of the evolution of the marketing management theory include…”the broadening of the marketing concept

The Marketing Mix Revisited 411 during the 70’s, the emphasis on the exchange transaction in the 80’s, the development of the Relationship Marketing and Total Quality Management in the 90’s” (Yudelson 1999)… and last but not least the emergence of Information and Communication Technologies as major actors of the 21st century Marketing. At the same period the consumer behaviour has also evolved; one of the noticeable changes has been the gradual evolution from the mass consumer markets of the 60’s (Wolf 1998) towards increasingly global, segmented, customised or even personalised markets of today (Kotler et al. 2001) where innovation, customisation, relationships building and networking have become issues of vital significance. The developments on the ground have prompted the development of new theoretical approaches dealing with specific rather than general marketing problems and situations.

In the course of these developments the 4Ps Marketing Mix framework has been one of the subjects that frequently became the source of controversy and scientific debate (Dixon and Blois 1983; Rafiq and Ahmed 1992). Surprisingly in a sense, this scientific debate has hardly been echoed in the practitioners’ quarters. Unlike academics, practising marketers have been reluctant to question, let alone dismiss the trusted paradigm (Bowman- Upton et al. 1989; Sriram and Sapienza 1991; Grönroos 1994), presumably anticipating that the academic debate will yield some new, apparently better marketing methodologies and usable concepts.

Some of the criticism to the address of the 4Ps framework has its roots in the discrepancy between the philosophy behind the Marketing Mix on one hand and the fundamentals of the Management School of Marketing on the other. The Management School that embraced the Mix as one of its “most important conceptual breakthroughs” (Sheth et al. 1988) has given the Mix, as already mentioned, similar status with the Marketing Concept and the Market Orientation principles (Kotler 1984). Yet the very nature of the four P’s as manageable i.e. controllable factors combined with the explicit lack of market input in the model (Kotler 2003) is in sharp contrast with the Marketing Concept and Market Orientation principles implying that marketing activities should be based on identification of customer needs and wants, typical external and therefore uncontrollable factors. This paradox has been highlighted by researchers like Dixon and Blois (1983) and Grönroos (1994).

The expanded theoretical scope of the marketing theory reflects the scholarly urge to better understand the managerial consequences of transformations taking place and identify sources of superior firm performance in constantly evolving competitive environments. The debate has been focused on developments of consumer and organisational behaviour, the increasing complexity of the environment and the growing importance of technology as marketing enabler. (Kaufman 1995; Brown and

412 E. Constantinides Eisenhardt 1998; Beinhocker and Kaplan 2002).

The marketing thematic entities that have emerged – Strategic Marketing, Consumer Marketing, Services Marketing, Industrial Marketing, International Marketing, Social Marketing, Retail Marketing, Non-Profit Marketing, Trade Marketing, Relationship Marketing, Direct Marketing, Network Marketing, Online Marketing, to name some of the most common terms used, underline the need for a systematic theoretical approach of specialised and complex marketing management issues. Researchers dealing with issues and problems emanating within these new marketing domains often dispute the Marketing Mix’s appropriateness as the underpinning marketing paradigm, at least in its original simplified form. The growing pressure on marketers to better identify and satisfy constantly changing customer and industry needs, the increasing importance of services and the need to build-up long-lasting relationships with the client, have further contributed to the exposure of several limitations of the 4P framework as a marketing management tool. A Disciplinary Classification of the Marketing Mix Criticism One of the criteria for classifying the attitudes of researchers towards the 4Ps Marketing Mix framework is the disciplinary origin of the arguments, but such a classification can raise always questions; the apparent difficulty of this approach is to exactly demarcate the different marketing domains, something that underlines the complexity of the marketing environment today. A “qualitative” classification offers however a good insight to research attitudes in analysing and modelling a changing, expanding and sometimes turbulent marketing environment.

On the basis of the disciplinary approach the theoretical status quo of the Marketing Mix will be reviewed based on publications referring to five traditional and one emerging Marketing Management sub-disciplines: Consumer Marketing, Relationship Marketing, Services marketing, Retail Marketing, Industrial Marketing and E-Commerce. It speaks for itself that further research in other marketing sub-disciplines is needed for drawing up final conclusions and comprehensive judgement on the question of the value of the 4Ps. The Marketing Mix and the Consumer’s Marketing

Significant cultural, social, demographic, political and economic influences during the last decades of the 20th century, combined with rapid technological advances have radically transformed the consumer’s needs, nature and behaviour. The new consumer has been described as existential, less responsive to traditional marketing stimuli and less sensitive to brands and marketing cues while the influence of family or other types of reference

The Marketing Mix Revisited 413 groups on the new consumer’s behaviour is changing or diminishing (Christopher 1989). More researchers share the view that the modern consumer is different: demanding, individualistic, involved, independent, better informed and more critical (Capon and Hulbert 2000; Lewis and Bridger 2000). A factor underlining the change is the increasing consumer power and sophistication due to wide availability of affordable personal computing power and easy access to online global commercial firms, networks, databases, communities or marketplaces. These developments have intensified the pressure on marketers to switch from mass marketing approaches towards methods allowing personalisation, interaction and sincere, direct dialog with the customer. Such approaches allow marketers not only to improve communications with their target groups but also to identify the constantly changing and evolving customer needs, respond quickly to competitive movements and predict market trends early and accurately. The opinions on the role of the Marketing Mix in the evolving consumer marketing environment are summarised in the following review. (Table 1)

Several shortcomings of the Marketing Mix have led the majority of the authors reviewed to suggest that the 4Ps framework should not be considered as the foundation of Consumer Marketing management any longer. In the reviewed papers and books the criticism is focused on three main areas:

– Internal Orientation: a frequent objection underlying the Mix’s explicit lack of customer orientation. Kotler (1984), Robins (1991), Vignali and Davies (1994) Bennett (1997) and Schultz (2001) are one way or another identifying this as the prime limitation of the Mix.

– Lack of consumer interactivity: Doyle (1994), and Yudelson (1999) argue that the Mix ignores the evolving nature of the consumer who demands not only higher value but also more control on the communication and transaction process. Allowing better interaction reduces the customer defection rates and increases customer trust.

– Lack of strategic elements: Ohmae (1982) Vignali and Davies (1994) argue that lack of strategic content is a major deficiency of the framework, making it unfit as planning instrument in an environment where external and uncontrollable factors define the firm’s strategic opportunities and threats.

The majority of the reviewed authors propose alternative frameworks while those willing to accept a role for the 4Ps often propose modified versions, with new elements added to the traditional parameters.

414 E. Constantinides Table 1. Review of Consumer Marketing Theory Literature

Author(s) Arguments Proposition

Kotler 1984

External and uncontrollable environmental factors are very important elements of the marketing strategy Programs

The Marketing Mix should include – Customers – Environmental variables – Competitive variables Two additional Ps to the 4 traditional ones: – Political power – Public opinion formulation

Ohmae 1982

No strategic elements are to be found in the marketing mix. The marketing strategy is defined by three factors

Three Cs define and shape the marketing strategy: – Customers – Competitors – Corporation

Robins 1991

The 4Ps Marketing Mix is too much internally oriented

Four Cs expressing the external orientation of a Marketing Mix: – Customers – Competitors – Capabilities – Company

Ohmae 1982

No strategic elements are to be found in the marketing mix. The marketing strategy is defined by three factors

Three Cs define and shape the marketing strategy: – Customers – Competitors – Corporation

Vignalli and Davies 1994

Marketing planning will contribute to the organisational success if it is closely related to strategy. The Marketing Mix is limited to internal and non-strategic issues

The MIXMAP technique allows the exact mapping of marketing mix elements and variables, allowing the consistency between strategy and tactics.

Doyle 1994

While the 4Ps dominate the marketing Management activities most marketing practitioners would add two more elements in this mix in order to position their products and achieve the marketing objectives

Two more factors must be added to the 4P mix: – Services – Staff

Cont’d…

The Marketing Mix Revisited 415

Author(s) Arguments Proposition

Bennett 1997

Focused on internal variables therefore incomplete basis for marketing. Customers are disposed to buy products from the opposite direction to that suggested by the Marketing Mix

Five Vs are the criteria of customer disposition: – Value – Viability – Variety – Volume – Virtue

Yudelson 1999

The 4Ps are not the proper basis of the 21st century marketing. The Marketing developments of the last 40 years require a new flexible Platform while the simplicity of the old model remains an attractive facto

4 new Ps based on exchange activities Product -> Performance Price-> Penalty Promotion-> Perceptions Place-> Process

Schultz 2001

Marketplaces today are customer oriented. The 4Ps have less relevance today, they made sense the time they were invented

– End-consumer controls the marke – Network systems should define

the orientation of a new Marketing

– A new Marketing mix must be based on the Marketing Triad Marketer, Employee and Customer

The Marketing Mix and the Relationship Marketing

Focus on sales volume through creation of large commercial firms, use of intermediaries and mass marketing during the 60’s and 70’s undermined the role of customer loyalty as important parameter of marketing activities for quite some time. One of the noteworthy recent changes in the marketing thinking has been the obvious emphasis shift from transaction-oriented exchanges to relation building, from acquisition-oriented to retention- oriented marketing (Parvatiyar and Sheth 1997). Marketers seemed to rediscover the forgotten advantages of offer personalisation and life long customer value and realise that building customer loyalty as well as holding on existing customers is as important as soliciting new customers and expanding business (McKenna 1991; Rozenberg and Czepiel 1992).

This change in attitudes did not come about overnight. Market saturation, economic crises and increasing global competition combined with inconsistent and unpredictable consumer behaviour are some of the main drivers behind the relationship movement. Quite a few researchers argue that relationship-orientation requires new approaches towards consumers (Wolf 1998) or even a marketing paradigm shift (Grönroos 1994; Gummesson 1994; Sheth and Parvatiyar 1995; Healy et al. 2001). The 4Ps Marketing Mix has been often the subject of debate and research as to its

416 E. Constantinides Table 2. Review of Relationship Marketing Literature

Author(s) Arguments Proposition

Lauterborm 1990

The 4PsMarketing Mix is product oriented, The successful marketing plan must place the customer in The centre of the marketing planning

Four Cs replace the 4Ps, indicating the customer orientation – Customer needs – Convenience – Cost (customer’s) – Communication

Rozenberg, Czepiel 1992

Keeping existing customers is as important as acquiring new ones. The approach towards existing customers must be active, based on a separate marketing mix for customer retention

Retention Marketing Mix: Product extras Reinforcing promotions Sales-force connections Specialised distribution Post-purchase communication

Gummesson 1994, 1997

…”The role of the 4Ps is changing from being founding Parameters of Marketing to one of being contributing parameters to relationships, network and interaction”…

30 R(elationship) parameters illustrate the role of marketing as a mix of relationships, networks and interaction

Grönroos 1994

Several arguments underlying the limitations of the marketing mix as the Marketing paradigm: Obsolete, not integrative, based on conditions not common to all markets, production oriented, not interactive etc.

Relationship marketing offers all the necessary ingredients to become the new Marketing Paradigm, while the Marketing Mix is not suitable to support a relation-based approach

Goldsmith 1999

The trend towards personalisation has resulted in an increasing contribution of services to the marketing of products. Personalisation must become the basis of the marketing management trajectory

The personalised Marketing Plan includes 4 more P’s next to the traditional Ps of the Marketing Mix – Personalisation – Personnel – Physical Assets – Procedures Cont’d…

The Marketing Mix Revisited 417 Author(s) Arguments Proposition

Patterson and Ward 2000

The traditional Marketing Mix therefore has a clearly offensive character because the strategies associated to the 4Ps tend to be function-oriented and output oriented. Well-managed organisations must shift the emphasis in managing valued customer relationships in order to retain and increase their customer base.

Four information-intensive strategies form the “new Cs” of Marketing: – Communication – Customisation – Collaboration – Clairvoyance

Healy et al. 2001

The weight of Marketing Management is clearly switching towards relationship marketing as the future marketing paradigm

The Relationship Marketing addresses the elements of Marketing Management identified by the Marketing Relationship trilogy: – Relationships – Neo-Relationship Marketing – Networks

capacity to address the relationship marketing. Research done by Ailawadi et al. (2001) questions the effect of promotions and advertising as marketing tools for customer retention while the study of Alsem et al. (1996) confirms that creating long-term relationships with customers is considered as the main company marketing focus of approximately 60% of the companies surveyed (this percentage has gone up by 20% in five years). A summary of opinions on the use of the Mix in a relationship marketing context is illustrated in Table 2.

The overwhelming majority of authors from the relationship-marketing field are clear and categorical on the role of the 4Ps in the context of Relationship Marketing: the framework cannot be the basis for retention-based marketing. Some specific limitations of the Mix draw most of the attention:

– Product orientation rather than customer orientation and focus

(Lauterborm 1990; Rozenberg, Czepiel 1992). The explicit focus of the Mix on internal processes undermines the elements of customer feedback and interaction as basis of building up relationships and retention. In the context of relationship building the Mix fails to address the individual customer needs.

– One-way orientation: No interactivity and personalised communication is supported given the background and character of the mix as a mass- marketing era concept (Gummesson 1994, 1997; Grönroos 1994; Goldsmith 1999) .

– The 4Ps framework is perceived as having an offensive rather than

418 E. Constantinides

collaborative character (Patterson and Ward 2000).

Relationship marketing supporters are quite critical as to the academic and

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