10. The extended marketing mix: extra elements and features of application.

In the late 70’s it was widely acknowledged by Marketers that the Marketing Mix should be updated. This led to the creation of the Extended Marketing Mix in 1981 by Booms & Bitner which added 3 new elements to the 4 P’s Principle. This now allowed the extended Marketing Mix to include products that are services and not just physical things.

The extended 7 P’s:

• People – All companies are reliant on the people who run them from front line Sales staff to the Managing Director. Having the right people is essential because they are as much a part of your business offering as the products/services you are offering.

• Processes –The delivery of your service is usually done with the customer present so how the service is delivered is once again part of what the consumer is paying for.

• Physical Evidence – Almost all services include some physical elements even if the bulk of what the consumer is paying for is intangible. For example a hair salon would provide their client with a completed hairdo and an insurance company would give their customers some form of printed material. Even if the material is not physically printed (in the case of PDF’s) they are still receiving a “physical product” by this definition.

Though in place since the 1980’s the 7 P’s are still widely taught due to their fundamental logic being sound in the marketing environment and marketers abilities to adapt the Marketing Mix to include changes in communications such as social media, updates in the places which you can sell a product/service or customers expectations in a constantly changing commercial environment.

Is there an 8th P?

In some spheres of thinking, there are 8 P’s in the Marketing Mix. The final P is Productivity and Quality. This came from the old Services Marketing Mix and is folded in to the Extended Marketing Mix by some marketers.

The 8th P of the Marketing Mix:

• Productivity & Quality - This P asks “is what you’re offering your customer a good deal?” This is less about you as a business improving your own productivity for cost management, and more about how your company passes this onto its customers.

11. Positioning definition and basic principles. Positioning is arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. Consumers are overloaded with information about products and services. They cannot reevaluate products every time they make a buying decision. To simplify the buying process, consumers organize products, services, and companies into categories and “position” them in their minds. A product’s position is the complex set of perceptions, impressions, and feelings that consumers have for the product compared with competing products. Positioning targets a product for specific market segments. The same product can be positioned in many different ways. In positioning its brand, a company first identifies possible customer value differences that provide competitive advantages on which to build the position. Thus, effective positioning begins with differentiation of product, services, channels, people, or image —actually differentiating the company’s market offering so that it gives consumers more value. Positioning maps: perceptual positioning maps that show consumer perceptions of their brands versus those of competing products on important buying dimensions. Choosing a positioning and differentiation strategy: Each firm must differentiate its offer by building a unique bundle of benefits that appeal to a substantial group within the segment. Above all else, a brand’s positioning must serve the needs and preferences of well-defined target markets. The differentiation and positioning task consists of three steps: identifying a set of differentiating competitive advantages on which to build a position, choosing the right competitive advantages, and selecting an overall positioning strategy. Choosing the right competitive advantage: Suppose a company is fortunate enough to discover several potential differentiations that provide competitive advantages. How many differences to promote and which one? Selecting an overall positioning strategy: The full positioning of a brand is called the brand’s value proposition—the full mix of benefits on which a brand is differentiated and positioned. - more for more positioning: by introducing a brand offering comparable quality at a lower price - the same for less positioning: develop imitative but lower-priced brands in an effort to lure customers away from the market leader. - less for much less positioning: always exists for products that offer less and therefore cost less. - more for less positioning: have arguably the best product selection, the best service, and the lowest prices. Developing a positioning statement: The statement should follow the form: To (target segment and need) our (brand) is (concept) that (point of difference). Positioning statement firstly states the product’s membership in a category (digital content management application) and then shows its point of difference from other members of the category (easily capture moments and ideas and remember them later). Communicating and delivering the chosen position: Designing the marketing mix—product, price, place, and promotion—involves working out the tactical details of the positioning strategy.

Positioning issues: - define competitive frame of reference (nature of competition; target market) - define desired brand knowledge structures (points of parity = POPs (necessary, compititive)/points of difference = POD (strong, favorable and unique brand associations – associative positioning)). For example, the iconic 100 year old Del Monte Food brand designed its entire integrated marketing campaign—from television and print ads to its online, mobile, and social media content—around the “Bursting with Life” positioning. The campaign slogan positions Del Monte’s canned fruits and vegetables as quality ingredients that contribute to a healthy lifestyle. They are “grown in America, picked and packed at the peak of ripeness, and contain the same essential nutrients as fresh.” In positioning its brand, a company firstly identifies possible customer value differences that provide competitive advantages on which to build the position.

12. Marketing warfare and the concept of positioning by Ries and Trout Ries and Trout argue that the marketing is war and that marketing concept customer-oriented philosophy is inadequate. Rather, firm would do better by becoming competitor-oriented. Of the key to success were to introduce products closest to those wanted by customers, then the market leader simply would be the firm that performed the best market research. To illustrate their point, Ries and Trout compare marketing to a football game. If a team simply identifies the goal line and moves the ball towards it without regard to the competing team, they most likely will be blocked in their effort. To win the game, the team must focus its efforts on outwitting (перехитрить), outflanking or over-powering to the other side. + the principle of force: There’s saying that it is easier to get top than to stay here. Ries and Trout disagree, arguing that once being at the top, a company can use power of its leadership position to stay there. The concept of positioning by Ries and Trout includes: - defensive warfare: adopted when your organization is clear market leader. Principles: only the market leader should consider playing defensive; the best defensive strategy is to attack yourself; strong competitive moves should always be blocked. - flanking warfare: adopted when your organization in № 4-6 in market and you have resources to pursue flanking move, resources to sew-up that market segment. Principles: a good flanking move must be made into uncontested area; tactical surprise ought to be an important element of the plan; the pursuit is as critical as attack itself. - offensive warfare: should be used when your organization is № 2 or 3 and it has resources to sustain a challenge leader. Principles: the main consideration is the strength of the leader; find a weakness in leader’s strength and attack at that point; launch the attack on as narrow a front as possible. - guerrilla warfare: appropriate for other 96 organizations in 100 organizations of the market. Principles: find a segment of a market small enough to defend; no matter how successful you become, never act like the leader; be prepared to enter or exit on a moment’s notice.