BUS210 Chapter 7 Notes PDF

**[BUS210 Introduction to Marketing]** **Chapter 7 -- Applying the Marketing Mix** **7.1 The Applied Marketing Mix: From 4 Ps to Four Cs** **7.2 Extending the Marketing Mix to Fit Current Marketing Practice** **Definitions:** Experiential Marketing -- a style of marketing that creates memorable...

**[BUS210 Introduction to Marketing]** **Chapter 7 -- Applying the Marketing Mix** **7.1 The Applied Marketing Mix: From 4 Ps to Four Cs** **7.2 Extending the Marketing Mix to Fit Current Marketing Practice** **Definitions:** Experiential Marketing -- a style of marketing that creates memorable interactions with brands that appeal to customers' senses Brand Communities -- groups of consumers united by engagement with a branded product or service Co-Creation -- a relationship in which customers participate in the design or production process with the brand Crowdsourcing -- the use of individuals or groups outside the organization to provide assistance, advice, or input on a task Gamification -- the use of games to interact with others (especially customers) to make the interaction more engaging and interesting Extended Marketing Mix -- the 5Ps and Cs framework that marketers use to facilitate exchanges with a target market **7.1 The Applied Marketing Mix: From 4 Ps to Four Cs** The 4 Ps are all producer-controlled variables: a. **Product** -- features that are included, how it is packaged, and the brand. b. **Place** -- when and where to make the product available to the customer. c. **Price** -- how much to charge and what terms will be offered. d. **Promotion** -- determines how the product will be promoted and what messages customers will see. To be successful, the marketer needs to understand how these activities are viewed by the *customer.* In other words, we would like to better understand the "customer mix" that represents the customer's perspective of the exchange. Products Affects Customer Benefits  **Product** -- focusing on *customer benefit(s)* attached to decisions increases the chance that the marketer will understand the target market and provide something of value to that group of customers. **Place** -- from the customers perspective, the place decision primarily one of *convivence*. Customers care about how they can get the product, where they can get it, and when they can get it and are willing to make certain trade-offs. Place decisions are influenced by the targets market's desire and willingness to pay for different levels of convenience. **Price** -- the firm assigns a value to the benefits it provides customers where they must agree that what they are receiving is more than they must give up in exchange for the good or service. The customer's *cost* includes more than price; it includes anything that detracts from the value of the exchange. From the customer's perspective, all costs are important because they all affect perceived value. **Promotion** -- involve deciding how the company wants to *communicate* with the customer. From the customer perspective, any interaction with the company communicates a message whether the company intends to communicate or not, and whether the communication takes form of television advertising, emails, customer service calls, or the website. To be effective, promotion should provide the right information in the format desired by the customer, use appropriate messages, be timed correctly, and be persuasive. **7.2 Extending the Marketing Mix to Fit Current Marketing Practice** The value of **experimental marketing** -- creating memorable interactions with brands that appeal to customers' senses. Experimental marketing focuses on making customers sense, feel, think, act, and relate in ways that create a bond with the brand. It attempts to encourage and manage customer participation in the exchange by managing and creating potential positive experiences with the brand. The use of technology for connectivity allows for people to stay in touch with each other and the world. Customers want to connect with brands and with each other and users spend 7 hours on the Internet, 2.5 hours on social media, and over an hour on gaming and streaming music mostly occurring on mobile phones. **Participation** and **connection** are the fifth P and C. Marketers should decide how customer participation with the brand could specifically strengthen connections between customers and the brand between customers. Today customers and brands often create and maintain connections though online **brand communities** -- the bond among customers based on common brand purchase, consumption, or desire. - Some companies create connections with customers through participation by creating opportunities for co-creation. **Co-creation** is when customers participate in the design or production process with the brand. Customers participating in a meaningful way with the brand feel more connected to the brand and its products. Another way of encouraging participation for deeper connection with a brand include crowdsourcing and gamification. - **Crowdsourcing** is the use of individuals or groups outside the organization to provide assistance, advice, or input on a task -- has been accessed by several companies to fund projects, generate new ideas, and test potential products. - **Gamification** is the use of games to interact with others (especially customers) to make the interaction more engaging and interesting. Though gamification has seen some successes in recruiting and training, the potential promise for engaging end consumers using gamification for simple promotion has been less encouraging. Integrating the Extended Marketing Mix 1. All 5 Ps and Cs are equally important because all five areas affect the customer's experience. 2. The combination of the 5 Ps and Cs will determine success or failure of the marketing strategy. 3. Any P can affect any C, so decisions in one area can affect other areas, 4. The order when making mix decisions matters, though eventually all decision must be consistent, the process of making the mix decisions flows more smoothly if made in this order: product, place, price, promotion, and participation. **Summary:** 7.1 The Applied Marketing Mix: From 4 Ps to Four Cs The original 4 Ps framework (product, place, price, and promotion) is still used to describe the marketing mix. To add a more explicit focus on customers, the 4 customer Cs were added to the traditional 4 Ps framework to provide a more direct customer perspective. To apply the marketing mix effectively, marketers must tie specific Ps to customer Cs. Marketers should relate: - Product (P) decisions to desired customer benefits (C). - Place (P) decisions to customer expectations and desired levels of convenience (C). - Price (P) decisions to customer perceptions of cost (C). - Promotion (P) decisions to customers' communication (C) needs. 7.2 Extending the Marketing Mix to Fit Current Marketing Practice - There are two trends changing marketing practice: (1) increased customer participation with brands and in the marketing process, with marketers trying to provide more positive customer experiences and (2) customers becoming more reliant on technology to connect with brands and each other. - A fifth P and C: Participation-connection: To accommodate the two trends in marketing practice, we added a fifth P and C to extend the marketing mix---participation (P) and connection (C). Companies create different ways customers can participate in the marketing process (before, during, and after purchase) that provide opportunities for customers to connect with the product, brand, company, and other customers to increase perceived value. - Integrating the extended marketing mix: There are four key points to remember when applying the framework to make marketing decisions: 1. All five P and C elements in the extended mix are equally important. Marketers must consider all five elements thoroughly and with the same level of attention to have a successful mix. 2. The combination of P and C element decisions will determine the success or failure of the marketing program. A great decision in one element cannot make up for a poor decision in another area. 3. All five mix elements must work together. Strategic consistency requires the marketers to consider not just whether the P delivers on the corresponding C (e.g., product decision provides desired customer benefits), but also whether the decisions across elements are consistent (do all five decision elements work together and provide the same value message to the target customer?). 4. Though marketing mix decisions are related and often made together, the mix works best, especially for new products/businesses, when the decision order is: product, place, price, promotion, and participation.