This week’s blog is about discussing implications of the internet on each element of the marketing mix.
Jerome McCarthy (1960) proposed the four key variables (4Ps) that are associated with marketing activities. They are Product, Price, Place and Promotion. Booms and Bitner (1981) extended the marketing mix to 7Ps to update and to reflect the needs of modern business environments. The further three components are People, Process and Physical evidence. Digital distribution and technology provide many opportunities for the marketers. Due to the complex technology-driven environments, marketing activities shift to customer-centric to focus on customer perspective to emphasise the marketing mix towards the relationship-building process with consumers. Chaffey and Smith (2012) further extend this, adding the eighth P, Partnership, to the digital marketing mix. This report will only focus on the fundamental 4ps.
Chaffey & Ellis-Chadwick (2016) state that Internet-related product marketing strategy is divided into two categories, these are core product and extended product. The core product refers to the fundamental qualities that meet consumers’ needs whereas the extended product refers to extra services or features that add value to the core product.
There are some main implications of the Internet on the Product element of the marketing mix, including options for varying the core product. For example, e-commerce sellers offering additional information or transaction services to the consumers (Chaffey & Ellis-Chadwick 2016, p. 256), such as, sending the shipping number so consumers so they can track their product. Companies should consider offering transforming products into digital services using the Internet. For example, Amazon now sells a variety of book formats including: Kindle, Audible audiobook, hardcover and audio CD to meet consumer’s needs (Amazon 2018). Sales of Audio books have doubled in the last five years because most consumers found that listening to audio books saved dedicated reading time, you can do other activities while listening to a book, such as, cooking, driving and running (Clark, 2018).
Example like Adobe Creative Cloud, they provide options for changing the extended product, instead of selling the physical software for a couple of hundred dollars to a consumer who needs to install it on their computer. They changed this business model to selling subscriptions to charge subscribers a monthly fee to use the Adobe suite with additional online storage space. Another example is using a mass customisation approach to meet individual’s needs where companies offer a customised version of their products to consumers. Apple Store sells their laptops with basic specifications however, it’s very easy to add additional memory or space to make the laptop suitable for specific personal use with additional payment.
Chaffey & Ellis-Chadwick (2016) state that Internet has dramatic implications for pricing strategies. Price has become more transparent in the e-commerce environment. Comparison shopping helps consumers find the best deals online. Internet price comparison services are becoming increasingly simple for customers to access such as Google shopping, BizRate and NexTag. Figure 3 demonstrates how NexTag gathers product information that includes suppliers and prices to display collective information to a shopper’s search query (Nextag, 2018). Consumers are able to compare products and services from multiple retailers. Marketers need to use price comparison services sites to see what type of prices are attracting their target market as well as to learn about competitor’s pricing strategies.
Chaffey & Ellis-Chadwick (2016) state that companies bundle multiple products or components together at a discounted price to encourage consumers to purchase additional products that they may not necessarily need or want. This approach has become a popular marketing strategy that e-commence sellers use to sell more products which, in turn helps them to make more profit. Figure 4 displays that it cost consumers more to buy individual products instead of buying a packaged product in IKEA.
Chaffey & Ellis-Chadwick (2016) define that the place element of the marketing mix refers to the process and activities of moving the product from the producer to consumer in an offline context. With an e-commerce platform, place and promotion are very different to traditional marketing. Today’s market is much more global than it was a few years ago. Products are distributed worldwide through the internet. The main implication of the Internet for the place are place of purchase, new channel structures, channel conflicts and virtual organisations (Chaffey & Ellis-Chadwick, p.277). For example, syndicating your product or services to authoritative sites such as Etsy helps your business to gain huge exposure with large and loyal audiences as well as increasing website traffic. As a result, your business becomes more accessible and visible digitally.
Historically, products have been promoted primarily using TV and printed materials to increase brand awareness and encourage consumers to purchase. In contrary, marketing promotions in e-commence are using email marketing, search marketing, web sponsorship, content marketing, social media and electronic word of mouth. For example: DanielWellington (DW) encourages consumers to post a picture on their feed with its product on their Instagram using #DanielWellington to win a chance to get featured on DW’s official site. Individuals are highly creative communicators, by doing this DW created a huge buzz around the brand.
It is important to consider using the marketing mix as a tool to creating the right marketing strategy that is right for your organisation to distinguish your product from competitors’ product in the marketing place. All the elements of the marketing mix have an interaction with each other.
Amazon 2018, Every Day is Extra, Amazon Kindle ebook, Sydeny, viewed 12 September 2018, https://amzn.to/2x6dnGq
Booms, B & Bitner, M 1981, ‘Marketing strategies and organisation structures for service firms’, in J. Donnelly and W. George (eds), Marketing of Services, American Marketing Association, New York.
Chaffey, D & Ellis-Chadwick, F 2016, Digital Marketing, Pearson.
Clark, A 2018, Easy listening: the rise of the audiobook, The guardian, Sydeny, viewed 12 September, 2018, https://www.theguardian.com/books/2018/jul/09/easy-listening-rise-of-audiobooks-alex-clark
Etsy, Inc 2018, viewed 12 September 2018, https://www.etsy.com/au/
Mottola, I 2016, ‘Daniel Wellington perfect Instagram marketing strategy’, Medium Blog, web log post, 12 September 2018, https://medium.com/@ignaziomottola/daniel-wellington-perfect-instagram-marketing-strategy-ce637c19c68c
Nextag 2018, Nextag, California, viewed 12 September 2018, https://www.nextag.com/
Singh, A, Agrariya, K & Deepali, I 2011, ‘What really defines relationship marketing?
A review of definitions and general and sector specific defining constructs’, Journal of Relationship Marketing, vol. 10, no. 4, pp. 203-237.