Firstly, I would like to summarise what the Marketing Mix is, as explained by Kotler & Armstring (2010, p.36) “marketing mix: the set of marketing tools the form uses to implement its marketing strategy”. The tools that make up the marketing mix can be categorised into 4 major groups, also known as the “4 P’s of Marketing”, these are (Kotler & Armstrong, 2010):
- Product: This is the service/product/item that the firm is marketing to fulfill a specific need.
- Price: The value that the firm will be charging for the “Product”.
- Place: How will the firm make the “Product” available to it’s target consumers.
- Promotion: The method in which the firm will convince the target consumers to purchase the “Product”, what “validates” the purchase of this product?
The Marketing Mix is driven by the Marketing Strategy, as explained by Kotler & Armstrong (2010, p.72). The Marketing Strategy consists of identifying the target consumer/demographic for the product – this is known as “Market Segmentation” in which different groups of consumers are identified according to their needs (Kotler & Armstrong, 2010). Once the Market Segmentation has been performed the firm must perform Market Targeting; in which the Market Segments are evaluated and the most attractive market segments are identified. The final step is to decide on the Positioning. This is where the firm aims to position their product in a desirable place so that it will appeal to the target consumers needs (Kotler & Armstrong, 2010).
As we can more clearly see now, after the marketing strategy has been done the marketing mix is a much clearer objective to achieve; we, in essence, have roughly defined, or at least researched for grounds (price is often based on place), all 4 of our P’s. Boulding et al (1994) have researched the possibilities of advertising, promotion and sales force achieving differentiation in marketing; in their paper they introduce two conflicting views
- Marketing communications themselves “induce differentiation”, which in turn reduces price competition and raises the barriers to entry (introduced by Bain, 1956). This is said to be consistent with the belief that communications themselves help position and enhance a product and its features (Boulding et al, 1994).
- Marketing communications reduce the “research costs” of the consumer (between different brands) and therefore reduces differentiation (introduced by Nelson, 1974 – Boulding et al, 1994). This is said to curve the market towards price comparisons being the basis for product review.
Boulding et al’s (1994) research came to the conclusion that the uniqueness of your communications is what defines the success of the marketing strategy. Based on your marketing mix, if your price is a common ground with competitors, then it is not unique and should not be heavily conveyed otherwise differentiation will not be achieved. However, price is something that can definitely create differentiation if your prices are lower than your competitors. Boulding et al (1994) also concluded from their research that for firms pricing above the industry average, current promotion activities decreased future differentiation while increased future price competition whereas the current sales activities increased future differentiation while they decreased future price competition.
Simply said, adjusting each of the 4 P’s to make your specific mix unique is the key to gaining differentiation, but, as Boulding et al (1994) have pointed out, the long term reactions to the current actions must be considered, not just the immediate spikes/drops in demand.
References
Boulding, W., Lee, E. & Staelin, R. (1994) ‘Mastering the mix: Do advertising, promotion, and sales force activities lead to differentiation?’, Journal of Marketing Research (JMR), 31, 2, pp. 159-172, EBSCOhost [Online]. Available from: http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=9411112937&site=eds-live&scope=site (Accessed: 9 July 2011).
Kotler, P. & Armstrong, G. (2010) Principles of Marketing. 13th (Global) ed. Boston: Pearson Education, Inc.