From Marketing Mix to Relationship Marketing Essay Example for Free

From trade pleat to kindred trade EssayThis report discusses how the grocery shamble management paradigm has dominated the marketplace thought, research and modelling since it was introduced al virtually 40 years ago, but today stark naked merchandising approachinges atomic number 18 being introduced and used. The globoseization of business and the evolving recognition of the importance of customer retention and market economies and of customer kin economics, among other tr eat ups, beef up the change in mainstream trade. merchandise MixThe landmark selling ruffle is be wish one of the most famous trade terms used by millions of slew. Its elements ar kn own as the Four Ps, which ar price, place, product, and advance. These quartette variables argon the variables that selling managers can control in order to best satisfy customers in the head market. Figure 1 selling Mix Model 4Ps Marketing the steering most textbooks breed it today was introduce d around 1960. The conceit of the trade ruffle and the Four Ps of trade product, price, place and promotion entered the trade textbooks at that time.Quickly they withal became treated as the unchallenged basic model of trade, so totally overpowering previous models and approaches, such(prenominal) as, for example, the organic functionalist approach advocated by Wroe Alderson as well as other systems-oriented approaches and parameter theory developed by the Copenhagen School in Europe that these are scantily remembered, scour with a foot none in most textbooks of today. (Gronroos, Toward a Relationship Marketing Paradigm, 1994) The trade mixing refers to variables that a merchandise manager can control to influence a brands sales or market share.Traditionally, these variables are summarized as the Four Ps of merchandising product, price, promotion, and place (i. e. , distribution). Product refers to aspects such as the unswervings portfolio of products, the newness of those products, their differentiation from competitors, or their superiority to rivals products in terms of quality. Promotion refers to advertising, detailing, or informative sales promotions such as features and displays. Price refers to the products list price or any incentive sales promotion such as quantity discounts, temporary price switch offs, or deals.Place refers to deli genuinely of the product measured by variables such as distribution, availability, and shelf space. The 4Ps model is comely one of many marketing mix lists that keep up been developed over the years. And, whilst the questions we demand listed above are keys, they are just a subset of the detailed probing that may be required to optimize your marketing mix. Amongst the other marketing mix models have been developed over the years is the 7Ps, sometimes called the extended marketing mix, which take on the first 4 Ps, plus people, processes and physical layout decisions.Another marketing mix approac h is Lauterborns 4Cs, which presents the elements of the marketing mix from the profaneers, rather than the sellers, perspective. It is made up of Customer withdraws and wants (the equivalent of product), Cost (price), Convenience (place) and parley (promotion). Cultural policies to promote diversity of cultural expressions today must deal with numerous factors and needs, some of which connect the right of all groups to their forms of expression, and others strictly with business feasibility and the possibility of marketing on a global scale.These different factors may be demanding to reconcile but they are complementary as no(prenominal) can survive and be managed without referring to or involving the other. From the perspective of production development, it is frequently stated that cultural expressions need to find their market in order to survive, but it is also the case that the sacrificing of cultural content with superficial market cherish lowers the value of cultura l production overall.From the perspective of rights to and processes of identity construction, culture generates services that cannot be governed exclusively by the market, especially in view of the marginality of subaltern groups. Nevertheless, it is almost impossible to think of cultural practices and consumption today without involving the market in some way. For marketers in the cultural industry it is important to observe the factors influencing consumers purchasing. Cultural factors are essentially important in selection of the two elements of place and product. For example, someone brought p in an environment that set art would be more likely to buy artistic products. in time it may be important get wording customers in terms of their sub-culture. One may be surrounded by people who not only value art but place a higher anteriority on paintings as opposed to the music. As a result, they will be more likely to buy paintings rather than musical instrument. Pricing the arti stic products and activities should also follow a logic trend. This practice may be done through some standards set among artists of the same class or by the very artist creator of his work.In general, as it can be seen, due(p) to the difference. (Shahhosseini Ardahaey, 2011) The Four Ps of the marketing mix became an indisputable paradigm in academic research, the validity of which was taken for granted. For most marketing researchers in large parts of the academic world it seems to remain the marketing truth even today. The Four Ps of the marketing mix had been even referred to as the holy quadrupleof the marketing faith written in tablets of stone. (Gronroos, Toward a Relationship Marketing Paradigm, 1994)The marketer plans various government agency of competition and blends them into a marketing mix so that a pro admit function is optimized, or rather satisfied. The marketing mix, concept was introduced by Neil Borden in the 1950s, and the mix of different means of competitio ns was soon labeled the Four Ps. (Gronroos, Toward a Relationship Marketing Paradigm, 1994) Any marketing paradigm should be well set to fulfill the marketing concept, i. e. the caprice that the firm is best off by designing and directing its activities harmonise to the needs and desires of customers in chosen target markets. Gronroos, Toward a Relationship Marketing Paradigm, 1994) American Marketing Association, in its most recent definition states that marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange and satisfy several(prenominal) and organizational objectives (emphasis added) (Gronroos, From Marketing Mix to Relationship Marketing Towards a Paradigm Shift in Marketing, 1994) The trouble with the Marketing Mix One can easily argue that the quad Ps of the marketing mix are not well able to fulfill the requirements of the marketing concept.As Dixon and Blois put it, thence i t would not be unfair to suggest that far from being concerned with a customers interests (i. e. someone for whom something is done) the views implicit in the Four P approach is that the customer is somebody to whom something is done (emphasis added) . To use a marketing metaphor, the marketing mix and its cardinal Ps constitute a production-oriented definition of marketing, and not a market-oriented or customer oriented one. Moreover, although the interactive nature of the Ps is recognized, the model itself does not explicitly include any interactive elements.Furthermore, it does not indicate the nature and scope of such interactions. (Gronroos, Toward a Relationship Marketing Paradigm, 1994) Van Waterschoot and Van den Bulte recognize three flaws in the Four P model * The properties or characteristics that are the basis for classification have not been identified. * The categories are not mutually exclusive. * Thither is a catch-all subcategory that is continually growing . Man y marketing-related phenomena are not included. Moreover, as Johan Arndt has concluded, marketing research remains condition in scope and even myopic, and methodological issues become more important than substance matters. Gronroos, From Marketing Mix to Relationship Marketing Towards a Paradigm Shift in Marketing, 1994) The Nature of the Marketing Mix The advantage of the Four Ps as a general marketing theory for practical purposes is, to say the least, extremely questionable. Originally, although they were largely based on empirical induction and earlier lists of marketing functions of the functional school of marketing, they were probably developed under the influence of microeconomic theory and specially the theory of monopolistic competition of the 1930s, in order to add more realism to that theory. However, very soon the connection to microeconomic theory was cut off and subsequently totally forgotten. Theoretically, the marketing mix became just a list of Ps without roots. (Gronroos, Toward a Relationship Marketing Paradigm, 1994) Managing the marketing mix asks marketing seem too easy to handle and organize.Marketing is separated from other activities of the firm and delegated to specialists who take care of the analysis, planning and implementation of various marketing tasks, such as market analysis, marketing planning, advertising, sales promotion, sales, pricing, distribution and product packaging. Marketing departments are created to take function for the marketing function of the firm, The marketing department approach to organizing the marketing function has isolated marketing from design, production, deliveries, practiced service, complaints handling, invoicing and other activities of the firm.As a consequence, the rest of the organization has been alienated from marketing. Therefore, it has made it difficult, often even impossible, to give marketing into the integrative function that would provide other departments with the market-relate d input needed in order to make the organization truly market oriented and reach a stage of co-ordinated marketing the marketing specialists create in a marketing department may get alienated from the customers.Managing the marketing mix means relying on mass marketing. Customers become numbers for the marketing specialists, whose actions, therefore, typically are based on come near training obtained from market research reports and market share statistics. Frequently such marketers act without ever having encountered a real customer. The marketing department concept is obsolete and has to be replaced by some other way of organizing the marketing function, so that the organization will have a chance to become market-oriented.A handed-down marketing department will always, in the final analysis, stand in the way of spreading market orientation. The use of the marketing mix management paradigm and the Four Ps has made it very difficult for the marketing function to earn credibilit y. Some firms have solved this problem not only by downscaling or altogether terminating their marketing departments but also by banning the use of the term marketing for the marketing function. (Gronroos, Toward a Relationship Marketing Paradigm, 1994) What is the History of the Marketing Mix?A paradigm like this has to be well founded by theoretical deduction and empirical research otherwise much of marketing research is based on a loose foundation and the results of it questionable. Let us look at the history of the marketing mix paradigm and the four Ps. The marketing mix developed from a notion of the marketer as a mixer of ingredients, which was an expression pilot programly used by James Culliton (1948) in a study of marketing costs in 1947 and 1948. The marketer plans various means of competitions and blends them into a marketing mix, so that a profit function is optimized, or rather satisfied.The marketing mix is actually a list of categories of marketing variables, and to begin with, this way of defining or describing a phenomenon can never be considered a very valid one. A list never includes all relevant elements, it does not fit every situation, and it becomes obsolete. And indeed, marketing academics every now and then offer surplus Ps to the list, once they have found the standard tablet of faith too limited. (Gronroos, Toward a Relationship Marketing Paradigm, 1994) Kotler has, in the linguistic context of megamarketing, added public relations and politics, thus expanding the list to six Ps.In service marketing. Booms and Bitner (1982) have suggested three additional Ps, people, physical evidence and process. Judd (1987) among others, has argued for just one new P, people. Advocators of the marketing mix paradigm sometimes have suggested that service should be added to the list of Ps (e. g. Lambert and Harrington 1989 and Collier 1991). J It is, by the way, interesting to ceremonial occasion that after the four Ps were definitely canonized s ometime in the early seventies new items to the list are almost exclusively put in the form of PsIt is also noted that Bordens original marketing mix included 12 elements, and that this list was not intended to be a definition at all. Borden considered it guidelines only, which the marketer probably would have to reconsider in any given situation. In line with the mixer of ingredients metaphor he also implied that the marketer would blend the various ingredients or variables of the mix into an integrated marketing program. This is a fact that advocators of the four Ps (or five, six, seven or more Ps) and of todays marketing mix approach seem to have totally forgotten.In fact, the four Ps represent a significant oversimplification of Bordens original concept. McCarthy either misunderstood the meaning of Bordens marketing mix when he reformulated the original list in the shape of the rigid mnemonic of the four Ps where no blending of the Ps is explicitly included or his followers mis interpreted McCarthys intentions. In many marketing textbooks organized around the marketing mix, such as Philip Kotlers well-known Marketing Management (e. g. 991), the blending aspect and the need for integration of the four Ps are discussed, even in depth, but such discussions are always limited due to the fact that the model does not explicitly include an integrative dimension. (Gronroos, Toward a Relationship Marketing Paradigm, 1994) contemporaneous Theories of Marketing In most marketing textbooks the marketing mix management paradigm and its Four Ps are still considered the theory of marketing. Indeed, this is the case in much of the academic research into marketing however, since the mid-sixties alternative theories of marketing have been developed.As Moller observes in a recent overview of research traditions in marketing, from the functional view of marketing mix management our focus has extended to the strategic role of marketing, aspects of service marketing, policy-m aking dimensions of channel management, interactions in industrial networks to mention just a few evolving trends. The interaction/network approach to industrial marketing was originated in Sweden at Uppsala University during the 1960s and has since spread to a large number of countries. amid the parties in a network various interactions take place, where exchanges and adaptations to each other occur. A flow of goods and information as well as financial and social exchanges takes place in the network. In such a network the role and forms of marketing are not very clear. All exchanges, all sorts of interactions have an wallop on the position of the parties in the network. The interactions are not necessarily initiated by the seller the marketer according to the marketing mix management paradigm and they may come about over a long expiration of time, for example, for several years.The seller, who at the same time may be the buyer in a joint setting, may of course employ marketin g specialists, such as sales representatives, market communication people and market analysts but in addition to them a large number of persons in functions which according to the marketing mix management paradigm are non-marketing, such as research and development, design, deliveries, customer training, invoicing and credit management, has a decisive impact on the marketing success of the seller in the network.In the early 1970s the marketing of services started to emerge as a separate area of marketing with concepts and models of its own geared to typical characteristics of services. In Scandinavia and Finland the Nordic School of Services more than research into this field elsewhere looked at the marketing of services as something that cannot be separated from overall management. (Gronroos, Toward a Relationship Marketing Paradigm, 1994) The newly Approaches and the Marketing MixThe interaction and network approach of industrial marketing and modern service marketing approaches , especially the one by the Nordic School, clearly views marketing as an interactive process in a social context where relationship building and management is a vital cornerstone. They are in some respects clearly related to the systems-based approaches to marketing of the 1950s (compare, for example, Alderson 1957). The marketing mix paradigm and its four Ps, on the other hand, is a much more clinical approach, which makes the seller the active part and the buyer and consumer passive.No personalized relationship with the producer and marketer of a product is supposed to exist, other than with master copy sales representatives in some case. The development of innovative theories, models and concepts of industrial marketing (interaction/network approach) and service marketing has clearly demonstrated that the marketing mix paradigm and its four Ps finally have reached the end of the road as the universal marketing theory. From a management point of view the four Ps, undoubtedly, may have been face-saving. The use of various means of competition became more organized.However, the four Ps were never relevant to all markets and to all types of marketing situations. The development of alternative marketing theories discussed above demonstrate that even from a management perspective, the marketing mix and its four Ps became a problem. Their pedagogic elegance and deceiving sense of simple mindedness made practical marketing management look all too clinical and straightforward even for actors in the consumer packaged goods field where they were originally intended to be used. Consumer goods amounts to a considerable business, and there the four Ps could still fulfill a function.However, many of the customer relationships of manufacturers of consumer goods are industrial-type relationships with wholesalers and retailers, and the retailers of consumer goods more and more consider themselves service providers. In such situations the four Ps have less to offer even i n the consumer goods field. Moreover, as far as the marketing of consumer goods from the manufacturer to the ultimate consumers is concerned, there is a growing pass on whether one can continue to apply marketing in the traditional mass marketing way. Gronroos, Toward a Relationship Marketing Paradigm, 1994) The Future The Relationship Marketing Concept In the relationship marketing concept to be presented here the core variables are relationships, networks and interaction. The choice is not arbitrary these variables recurrently emerge in the new marketing theories that have challenged the reigning marketing management paradigm during the past twenty-five years. These variables are not new they were there thousands of years ago and they present themselves here and now. They will be here in the future, no matter if they are represented by relationship marketing or something else. They are part of society. In fact, society is nothing less than a network of relationships within which we interact, and marketing is a dimension of society. Research and education in business have only recently begun to acknowledge the public of relationships, but have not as yet understood their omnipresence and deep impact on marketing. Although it is encouraging that relationships have been made visible and that the interest in them is soaring, major problems follow.One is that those who start to look and implement relationship marketing techniques are often not sufficiently familiar with the foundations of relationship marketing, its paradigm. Furthermore, relationship marketing is put under siege by the traditional marketing management paradigm, and the techniques used in relationship marketing implementation are often more grounded in marketing management values than in relationship marketing values. (Gummesson, 2002)An integral element of the relationship marketing approach is the promise concept, which has been strongly emphasized by Henrik Calonius According to him the r esponsibilities of marketing do not only, or predominantly, including giving promises and thus persuading customers as passive counterparts on the marketplace to act in a given way. Fulfilling promises that have been given is every bit important as means of achieving customer satisfaction, retention of the customer base and long-term profitability (compare also Reichheld and Sasser).He also stresses the fact that promises are mutually given and fulfilled. (Gronroos, Toward a Relationship Marketing Paradigm, 1994) Relationship Marketing There are many definitions of relationship marketing, most of them stressing the development and maintenance of long term relationships with customers and sometimes with other stakeholders. Total relationship marketing is marketing based on relationships, networks and interaction, recognizing that marketing is introduce in the total management of the networks of the selling organization, the market and society.It is directed to long term win-win rela tionships with individual customers, and value is jointly created between the parties involved. It transcends the boundaries between specialist functions and disciplines. Total relationship marketing embraces not just the supplier-customer gallus as does one-to-one marketing and CRM (customer relationship management) but also relationships to a suppliers own suppliers, to competitors and to middlemen these are all market relationships. (Gummesson, 2002) Is There a Paradigm Shift in Marketing? Relationships do not function by themselves.As McInnes said already three decades ago, the existence of a market relation is the foundation of exchange not a substitute for it. Only in extreme situations, for example when the computer systems of a buyer and a materials provider are connected to each other in order to initiate and execute purchase decisions automatically, the relationship, at least for some time, may function by itself. In such situations one comes close to what Johan rndt call ed domesticated markets, where transactionsare usually handled by administrative processes on the basis of negotiated rules of exchange.Normally, advertising, distribution and product branding, for example, will still be needed, but on with a host of other activities and resources. (Gummesson, 2002) However, what marketing deserves is new perspectives, which are more market-oriented and less manipulative, and where the customer indeed is the focal point as suggested by the marketing concept. Conclusion Marketing mix as a general perspective evolved because at one time it was an effective way of describing and managing many marketing situations. forward the marketing mix there were other approaches. Now time has made this approach less helpful other than in specific situations. New paradigms have to come. After all, we live in the 1990s, and we cannot for ever continue to live with a paradigm from the 1950s and 1960s. However, bearing in mind the long-term damages of the marketing m ix as the universal truth, we are going to need several approaches or paradigms Relationship marketing will be one of them.