In 1965 Professor N. H. Borden coined the phrase ‘marketing mix’ to describe the combination of marketing element used in given set of circumstances. Appropriate mixes vary depending on the firm and industry, and over time.
Professor E. J. McCarty subsequently summarized the notion under four headings (known as the ‘four Ps’ of marketing), as follows:
- Promotion – including advertising, merchandising, public relations, and the utilization of sales people.
- Product – design and quality of output, assessment of consumer needs choice of which products to offer for sale, after sale service.
- Price – choice of pricing strategy, prediction of competitors’ responses to changes in the supplying firm’s prices.
- Place – selection of distribution channels, transport arrangements.
Marketing is the primary interface between the firm and its customers, guiding resources towards appropriate product offers and facilitating the satisfaction of customer requirements. Selection of the particular mix to be used forms the basis of the firm’s marketing strategy.
Examples of marketing strategy are:
- developing new product for existing markets
- deeper penetration of existing markets
- entering new markets for existing product
- attacking competitors head-on (rather than following competitors’ norms and behavior)
- serving particular market niches
Marketing Myopia
In 1960 Theodore Levitt published in the Harvard Business Review an article entitled ‘Marketing Myopia’ in which he argued that firms should adopt broad industry orientations rather than focusing their attentions on
narrowly defined product of technologies. Thus a railway company should regard itself as being in the transportation business, oil companies as in energy business, and so on. This has many implications for corporate strategy, particularly in relation to the question of diversification.
narrowly defined product of technologies. Thus a railway company should regard itself as being in the transportation business, oil companies as in energy business, and so on. This has many implications for corporate strategy, particularly in relation to the question of diversification.
Problems with Levitt’s approach are that:
- whereas it extends the vocabulary used to describe a business’s activities, it does not necessarily alter the things the firm actually does
- often it is easy to define a market opportunity in a widely defined industry sector, but extremely difficult (perhaps impossible) to exploit it in practice.
