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The term "'''marketing mix'''" is a foundation model for businesses, historically centered around product, price, place, and promotion<ref>{{cite book|last=McCarthy|first=Jerome E.|title=Basic Marketing. A Managerial Approach|year=1964|publisher=Irwin|location=Homewood, IL}}</ref> (also known as the "4 Ps"). The [[marketing]] mix has been defined as the "set of marketing tools that the firm uses to pursue its marketing objectives in the target market".<ref name=":0">Kotler, P., Marketing Management, (Millennium Edition), Custom Edition for University of Phoenix, Prentice Hall, 2000, p. 9.</ref>
Marketing theory emerged in the early twentieth century. The contemporary marketing mix which has become the dominant framework for marketing management decisions was first published in 1960.<ref>Grönroos, Christian. "From marketing mix to relationship marketing: towards a paradigm shift in marketing." Management decision 32.2 (1994): 4-20.</ref> In services marketing, an extended marketing mix is used, typically comprising '''7 Ps''', made up of the original 4 Ps extended by process, people, and physical evidence.<ref name="Booms 1981 47–51">{{cite journal|last=Booms|first=Bernard H.|author2=Bitner, Mary Jo|title=Marketing Strategies and Organization Structures for Service Firms|journal=Marketing of Services. American Marketing Association|year=1981 |pages=47–51}}</ref> Occasionally service marketers will refer to '''8 Ps''', comprising these 7 Ps plus performance.<ref name="Kotler 2012 25">{{cite book |last=Kotler |first=Philip |title=Marketing Management |year=2012 |page=25 |publisher=Pearson Education}}</ref>
In the 1990s, the model of ''4 Cs'' was introduced as a more customer-driven replacement of the 4 Ps.<ref name="Business for Higher Awards">{{cite book |title= Business for Higher Awards |last= Needham |first= Dave |year= 1996 |publisher=Heinemann |location=Oxford, England }}</ref>
There are two theories based on 4 Cs: Lauterborn's 4 Cs (''consumer'', ''cost'', ''convenience'', and ''communication''), and Shimizu's 4 Cs (commodity, cost, channel, and communication).
Given the valuation of customers towards potential product attributes (in any category, e.g. product, promotion, etc.), and the attributes of the products sold by other companies, the problem of selecting the attributes of a product to maximize the number of customers preferring it is a [[Computational complexity theory#Intractability|computationally intractable]] problem.<ref name="RodriguezRabanalRubio">{{cite journal | last1=Rodríguez | first1=Ismael | last2=Rabanal | first2=Pablo | last3=Rubio | first3=Fernando | title=How to make a best-seller: Optimal product design problems | journal= Applied Soft Computing | volume=55 | issue=June 2017 | pages=178–196 | year=2017 | issn=1568-4946 | doi=10.1016/j.asoc.2017.01.036}}</ref>
The correct arrangement of marketing mix by enterprise marketing managers plays an important role in the success of a company's marketing:<ref>{{cite journal |last1=Mintz |first1=Ofer |last2=Currim |first2=Imran |title=What Drives Managerial Use of Marketing and Financial Metrics and Does Metric Use Affect Performance of Marketing-Mix Activities? |journal=Journal of Marketing |date=2013 |volume=77 |issue=2 |page=17 |doi=10.1509/jm.11.0463}}</ref>
# develop strengths and avoid weaknesses
# strengthen the competitiveness and adaptability of enterprises
# ensure the internal departments of the enterprise work closely together
== Emergence and growth ==
{{See also|History of marketing|E. Jerome McCarthy|Neil H. Borden}}
The origins of the 4 Ps can be traced to the late 1940s.<ref>Groucutt, J. and Leadley, p., ''Marketing: Essential Principles, New Realities,''https://books.google.com/books?id=cd6Sjxu2lesC&pg=PA17, Kogan Page, 2004 {{ISBN|978-0-7494-4114-2}}, p.17.</ref><ref>Hunt, S.F. and Goolsby, J., "The Rise and Fall of the Functional Approach to Marketing: A Paradigm Displacement Perspective," (originally published in 1988), reprinted in: ''Review of Marketing Research: Special Issue - Marketing Legends'', Vol. 1, Naresh K. Malhotra, (ed), Bingley, UK, Emerald, 2011</ref> The first known mention of a mix has been attributed to a Professor of Marketing at Harvard University, Prof. James Culliton.<ref>{{cite journal | last1 = Banting | first1 = P.M. | last2 = Ross | first2 = R.E. | year = 1973| title = The marketing mix: A Canadian perspective | journal = Journal of the Academy of Marketing Science | volume = 1 | issue = 1| page = 1973 | doi = 10.1007/BF02729310 }}</ref> In 1948, Culliton published an article entitled, ''The Management of Marketing Costs''<ref>Culliton, J. ''The Management of Marketing Costs'', [Research Bulletin] Harvard University, 1948).</ref> in which Culliton describes marketers as 'mixers of ingredients'. Some years later, Culliton's colleague, Professor Neil Borden, published a retrospective article detailing the early history of the marketing mix in which he claims that he was inspired by Culliton's idea of 'mixers', and credits himself with popularising the concept of the 'marketing mix'.<ref>Borden, N.H., "The Concept of the Marketing Mix," ''Journal of Advertising Research'', 1964, pp 2-7 and reprinted in: Baker, M.J. (ed), ''Marketing: Critical Perspectives on Business and Management'', Vol. 5, Routledge, 2001, pp 3-4 and available online at Google Books</ref> According to Borden's account, he used the term, 'marketing mix' consistently from the late 1940s. For instance, he is known to have used the term 'marketing mix' in his presidential address given to the [[American Marketing Association]] in 1953.<ref>Dominici, G., [http://faculty.mu.edu.sa/public/uploads/1361725683.7557marketing%20mix54.PDF "From Marketing Mix to E-Marketing Mix: A Literature Review,"] ''International Journal of Business and Management'', vol. 9, no. 4. 2009, pp 17-24</ref>
Although the idea of marketers as 'mixers of ingredients' caught on, marketers could not reach any real consensus about what elements should be included in the mix until the 1960s.<ref>{{cite journal | author1=W. Waterschoo | author2=C. van den Bulte | title=The 4P Classification of the Marketing Mix Revisited | journal=Journal of Marketing | volume=56 | number=4 | year=1992 | pages=83–93 | jstor= 1251988 }}</ref> The 4 Ps, in its modern form, was first proposed in 1960 by E. Jerome McCarthy; who presented them within a managerial approach that covered [[Market analysis|analysis]], [[Consumer behaviour|consumer behavior]], [[market research]], [[market segmentation]], and [[Project planning|planning]].<ref>McCarthy, E.J., ''Basic Marketing: A Managerial Approach'' Irwin, Homewood, Ill., 1960</ref> Phillip Kotler, popularised this approach and helped spread the 4 Ps model.<ref>Keelson, S.A>, "The Evolution of the Marketing Concepts: Theoretically Different Roads Leading to Practically the Same Destination!" in ''Global Conference on Business and Finance Proceedings'', Volume 7, Number 1, 2012, ISSN 1941-9589</ref><ref name=":0" /> McCarthy's 4 Ps have been widely adopted by both marketing academics and practitioners.<ref>Constantinides, ., "The Marketing Mix Revisited: Towards the 21st Century Marketing," ''Journal of Marketing Management'', vol. 22, 2006, pp. 407-438. Online: http://intranet.fucape.br/uploads/MATERIAIS_AULAS/25112-8.pdf</ref>
The prospect of extending the marketing mix first took hold at the inaugural AMA Conference dedicated to Services Marketing in the early 1980s, and built on earlier theoretical works pointing to many important limitations of the 4 Ps model.<ref name="ReferenceA">Fisk, R.P., Brown, W. and Bitner, M.J., "Tracking the Evolution of Services Marketing Literature, ''Journal of Retailing'', vol. 41, (April), 1993</ref> Taken collectively, the papers presented at that conference indicate that service marketers were thinking about a revision to the general marketing mix based on an understanding that services were fundamentally different from products, and therefore required different tools and strategies. In 1981, Booms and Bitner proposed a model of 7 Ps, comprising the original 4 Ps extended by process, people and physical evidence, as being more applicable for services marketing.<ref name="ReferenceB">Booms, B. and Bitner, M. J. "Marketing Strategies and Organizational Structures for Service Firms" in James H. Donnelly and William R. George, (eds), ''Marketing of Services'', Chicago: American Marketing Association, 47-51.</ref>
Since then, there have been a number of different proposals for a service marketing mix (with various numbers of Ps); most notably the 8 Ps, comprising the 7 Ps above, extended by 'performance'.<ref name="Kotler 2012 25"/>
== McCarthy's 4 Ps ==
{{See also|Marketing}}
The original marketing mix, or 4 Ps, as originally proposed by marketer and academic [[E. Jerome McCarthy]], provides a framework for marketing decision-making.<ref name="Business for Higher Awards" /> McCarthy's marketing mix has since become one of the most enduring and widely accepted frameworks in marketing.<ref>Bitner, M.J., "The Evolution of the Services Marketing Mix and its Relationship to Service Quality," in ''Service Quality: Multidisciplinary and Multinational Perspectives, '' Brown, S.W., Gummeson, E., Edvardson, B. and Gustavsson, B. (eds), Lexington, Canada, 1991, pp. 23-37.</ref>
Table 1: Brief Outline of 4 Ps<ref name="Business for Higher Awards"/>
{| class="wikitable"
|-
!Category
!Definition/Explanation/Concept
!Typical Marketing Decisions
|-
| [[Product (business)|Product]]
|A product refers to an item that satisfies the consumer's needs or wants.
Products may be tangible (goods) or intangible (services, ideas or experiences).
|
* Product design – features, quality
* Product assortment – product range, product mix, product lines
* Branding
* Packaging and labeling
* Services (complimentary service, after-sales service, service level)
* Guarantees and warranties
* Returns
* Managing products through the [[Product life-cycle theory|life-cycle]]<ref name="Business for Higher Awards" />
|-
|[[Pricing|Price]]
| Price refers to the amount a customer pays for a product.
Price may also refer to the sacrifice consumers are prepared to make to acquire a product (e.g. time or effort).
Price is the only variable that has implications for revenue.
Price is the only part of the marketing mix that talks about the value for the firm.
Price also includes considerations of [[customer perceived value]].
|
* Price strategy
* Price tactics
* Price-setting
* Allowances – e.g. rebates for distributors
* Discounts – for customers
* Payment terms – credit, payment methods
|-
|[[Distribution (business)|Place]]
| Refers to providing customer access
Considers providing convenience for consumer.
|
* [[Marketing channel|Strategies]] such as intensive distribution, selective distribution, exclusive distribution<ref>Wright, R., ''Marketing: Origins, Concepts, Environment,'' Holborn, London, Thomson Learning, 1999, pp. 250-251.</ref>
* [[Franchising]];<ref>Hartley, K. and Rudelius, W., ''Marketing, The Core,'' 4th Ed., McGraw-Hill, 2001.</ref>
* Market coverage
* Channel member selection and channel member relationships
* Assortment
* Location decisions
* Inventory
* Transport, warehousing and logistics
|-
|[[Promotion (marketing)|Promotion]]
|Promotion refers to marketing communications
May comprise elements such as: [[advertising]], [[public relations|PR]], direct marketing and [[sales promotion]].
|
* Promotional mix - appropriate balance of advertising, PR, direct marketing and sales promotion
* Message strategy - what is to be communicated
* Channel/ media strategy - how to reach the target audience
* Message Frequency - how often to communicate
|}
[[File:4Ps.jpg|thumb|The 4Ps have been the cornerstone of the managerial approach to marketing since the 1960s]]
'''Product''' refers to what the business offers for sale and may include products or services. Product decisions include the "quality, features, benefits, style, design, branding, packaging, services, warranties, guarantees, life cycles, investments and returns".<ref name=":9">{{Cite book|title=Key Concepts in Marketing|last=Blythe|first=Jim|publisher=SAGE Publications Ltd|year=2009|location=Los Angeles}}</ref>
'''Price''' refers to decisions surrounding "list pricing, discount pricing, special offer pricing, credit payment or credit terms". Price refers to the total cost to customer to acquire the product, and may involve both monetary and psychological costs such as the time and effort spent in acquisition. Distribution channels are taken into consideration that includes retailer, wholesaler, Business to Business OR Business to Customer .<ref name=":9" />
'''Place''' is defined as the "direct or indirect channels to market, geographical distribution, territorial coverage, retail outlet, market location, catalogues, inventory, logistics, and order fulfillment". Place refers either to the physical location where a business carries out business or the distribution channels used to reach markets. Place may refer to a retail outlet, but increasingly refers to virtual stores such as "a mail order catalogue, a telephone call centre or a website. Example, firms that produce luxury goods like Louis Vuitton employ an intensive placement strategy by making their products available at only a few exclusive retailers. In contrast, lower priced consumer goods like toothpaste and shampoo, typically employ an extensive placement strategy by making their products available to as many different retailers as possible."<ref name=":9" />
'''Promotion''' refers to "the marketing communication used to make the offer known to potential customers and persuade them to investigate it further".<ref name=":9" /> Promotion elements include "advertising, public relations, direct selling and sales promotions."
== Modified and expanded marketing mix: 7 Ps ==
{{See also|Services marketing|Service blueprint|Servicescape}}
By the 1980s, a number of theorists were calling for an expanded and modified framework that would be more useful to service marketers. The prospect of expanding or modifying the marketing mix for services was a core discussion topic at the inaugural AMA Conference dedicated to Services Marketing in the early 1980s, and built on earlier theoretical works pointing to many important problems and limitations of the 4 Ps model.<ref name="ReferenceA"/> Taken collectively, the papers presented at that conference indicate that service marketers were thinking about a revision to the general marketing mix based on an understanding that services were fundamentally different from products, and therefore required different tools and strategies. In 1981, Booms and Bitner proposed a model of 7 Ps, comprising the original 4 Ps plus ''process, people'' and ''physical evidence'', as being more applicable for services marketing.<ref name="ReferenceB"/><ref>{{Cite journal|last=Ivy|first=Jonathan|date=2008-05-16|title=A new higher education marketing mix: the 7Ps for MBA marketing |journal=International Journal of Educational Management|volume=22|issue=4|pages=288–299|doi=10.1108/09513540810875635|issn=0951-354X}}</ref>
Table 2: Outline of the Modified and Expanded Marketing Mix
{| class="wikitable"
|-
!Category
!Definition/ Explanation
!Typical Marketing Decisions
|-
| Psychology - the psychology of the people should be studied with changing times, to gain more insights into their exact requirements . in short" What does the customer want?" only this can lead to development of products which will add value in the customer's life.
Positioning - Placing or positioning the product to the right target segment.
People
| Human factors who participate in service delivery.<ref>Hoffman, D., Bateson, J.E.G., Elliot, G. and Birch, S., Services Marketing: Concepts, Strategies and Cases, (Asia-Pacific ed.), Cengage, 2010, pp. 226-274.</ref>
Service personnel who represent the company's values to customers.
Interactions between customers.
Interactions between employees and customers.<ref>Zeithaml, V. Bitner, M.J. and Gremler, D.D., ''Services Marketing: Integrating Customer Focus Across the Firm'', (6th ed), New York: McGraw-Hill, 2013.</ref>
|
* Staff recruitment and training
* Uniforms
* Scripting
* Queuing systems, managing waits
* Handling complaints, service failures
* Managing social interactions
|-
| Process
| The procedures, mechanisms and flow of activities by which service is delivered.
|
* Process design
* Blueprinting (i.e. flowcharting) service processes<ref>Shostack, G. L.. "Designing Services that Deliver", ''Harvard Business Review '', vol. 62, no. 1, 1984, pp. 133–139.</ref>
* Standardization vs customization decisions
* Diagnosing fail-points, critical incidents and system failures
* Monitoring and tracking service performance
* Analysis of resource requirements and allocation
* Creation and measurement of key performance indicators (KPIs)
* Alignment with Best Practices
* Preparation of operations manuals
|-
| Physical evidence
| The environment in which service occurs.
The space where customers and service personnel interact.
Tangible commodities (e.g. equipment, furniture) that facilitate service performance.
Artifacts that remind customers of a service performance.<ref>Bitner, M.J., "Servicescapes: The Impact of Physical Surroundings on Customers and Employees, Journal of Marketing, vol. 60, no. 2, 1992, pp. 56-71.</ref>
|
* Facilities (e.g. furniture, equipment, access)
* Spatial layout (e.g. functionality, efficiency)
* Signage (e.g. directional signage, symbols, other signage)
* Interior design (e.g. furniture, color schemes)
* Ambient conditions (e.g. noise, air, temperature)
* Design of livery (e.g. stationery, brochures, menus, etc.)
* Artifacts: (e.g. souvenirs, mementos, etc.)
|}
People are essential in the marketing of any product or service. Personnel stand for the service. In the professional, financial, or hospitality service industry, people are not producers, but rather the products themselves.<ref name=mclean>McLean, R. (October 19, 2002). The 4 C's versus the 4 P's of Marketing, Custom Fit Online. Retrieved from http://www.customfitonline.com/news/2012/10/19/4-cs-versus-the-4-ps-of-marketing</ref> When people are the product, they impact public perception of an organization as much as any tangible consumer goods. From a marketing management perspective, it is important to ensure that employees represent the company in alignment with broader messaging strategies.<ref name=emrald>{{Cite journal|doi=10.1108/02634509510097793|title=Using the 7Ps as a generic marketing mix: an exploratory survey of UK and European marketing academics|journal=Marketing Intelligence & Planning|volume=13|issue=9|pages=4|last=Rafiq|first=Mohammed|date=March 31, 2016}}</ref> This is easier to ensure when people feel as though they have been treated fairly and earn wages sufficient to support their daily lives.
[[Business process|Process]] refers to a "set of activities that results in delivery of the product benefits". A process could be a sequential order of tasks that an employee undertakes as a part of their job. It can represent sequential steps taken by a number of various employees while attempting to complete a task. Some people are responsible for managing multiple processes at once. For example, a restaurant manager should monitor the performance of employees, ensuring that processes are followed. They are also expected to supervise while customers are promptly greeted, seated, fed, and led out so that the next customer can begin this process.<ref name=emrald />
Physical evidence refers to the non-human elements of the service encounter, including equipment, furniture and facilities. It may also refer to the more abstract components of the environment in which the service encounter occurs including interior design, colour schemes and layout. Some aspects of physical evidence provide lasting proof that the service has occurred, such as souvenirs, mementos, invoices and other livery of artifacts.<ref name=mclean /> According to Booms and Bitner's framework, the physical evidence is "the service delivered and any tangible goods that facilitate the performance and communication of the service".<ref name=emrald /> Physical evidence is important to customers because the tangible goods are evidence that the seller has (or has not) provided what the customer was expecting.
==4 Cs==
===Lauterborn's 4 Cs (1990)===
Robert F. Lauterborn proposed a 4 Cs classification in 1990.<ref name="Lauterborn">{{cite journal | last1 = Lauterborn | first1 = B | year = 1990 | title = New Marketing Litany: Four Ps Passé: C-Words Take Over | journal = Advertising Age | volume = 61 | issue = 41| page = 26 }}</ref> His classification is a more consumer-orientated version of the 4 Ps<ref name="Kotlerkeller">Kotler, P. and Keller, K. (2006), Marketing and Management, Pearson Prentice Hall,
Upper Saddle River, NJ, USA</ref> that attempts to better fit the movement from [[mass marketing]] to [[niche market]]ing:<ref name="Lauterborn" />
{| class="wikitable"
|-
! width="10%" |4 Ps
! width="10%" |4 Cs
! width="80%" |Definition
|-
|<div style="text-align: center;">[[Product (business)|Product]]</div>
|<div style="text-align: center;">[[Consumer]] wants and needs</div>
|A company will only sell what the consumer ''specifically'' wants to buy. So, marketers should study consumer wants and needs in order to attract them one by one with something they want to purchase.<ref name="Lauterborn" /><ref name="McLean">McLean, R. (October 19, 2002). The 4 C's versus the 4 P's of marketing. ''Custom Fit Online.'' Retrieved from http://www.customfitonline.com/news/2012/10/19/4-cs-versus-the-4-ps-of-marketing/</ref>
|-
|<div style="text-align: center;">[[Pricing|Price]]</div>
|<div style="text-align: center;">[[Cost]]</div>
| Price is only a part of the total ''cost to satisfy'' a want or a need. The total cost will consider for example the ''cost of time'' in acquiring a good or a service, a ''cost of conscience'' by consuming that or even a ''cost of guilt'' "for not treating the kids".<ref name="Lauterborn" /> It reflects the total cost of ownership. Many factors affect cost, including but not limited to the customer's cost to change or implement the new product or service and the customer's cost for not selecting a competitor's product or service.<ref name="Basic Marketing">[http://www.courtest.com Marketing] {{webarchive|url=https://web.archive.org/web/20150622045521/http://www.courtest.com/ |date=2015-06-22 }}, Marketing.</ref>
|-
|<div style="text-align: center;">[[Distribution (business)|Place]]</div>
|<div style="text-align: center;">[[Marketing channel|Convenience]]</div>
|In the era of Internet,<ref name="McLean" /> catalogues, credit cards and phones, consumers neither need to go anywhere to satisfy a want or a need nor are they limited to a few places to satisfy them. Marketers should know how the target market prefers to buy, how to be there and be ubiquitous, in order to guarantee ''convenience to buy''.<ref name="Lauterborn" /><ref name="Schultz" /> With the rise of Internet and hybrid models of purchasing, Place is becoming less relevant. Convenience takes into account the ease of buying the product, finding the product, finding information about the product, and several other factors.<ref>{{Cite news|url=http://marketingmix.co.uk/convenience/|title=Marketing Mix Convenience - Marketing MIx|date=2016-07-19|work=The Marketing Mix|access-date=2017-12-22|language=en-US}}</ref>
|-
|<div style="text-align: center;">[[Promotion (marketing)|Promotion]]</div>
|<div style="text-align: center;">[[Communication]]</div>
|While promotion is "manipulative" and from the seller, communication is "cooperative" and from the buyer<ref name="Lauterborn" /> with the aim to create a dialogue with the potential customers based on their needs and lifestyles.<ref name="Schultz">{{Citation | author1=Schultz, Don E | author2=Tannenbaum, Stanley I | author3=Lauterborn, Robert F | title=Integrated marketing communications | publication-date=1993 | publisher=NTC Business Books | isbn=978-0-8442-3363-5 | url-access=registration | url=https://archive.org/details/integratedmarket00schu_0 }}</ref> It represents a broader focus. Communications can include advertising, public relations, personal selling, [[Viral marketing|viral advertising]], and any form of communication between the organization and the consumer{{Citation needed|date=October 2013}}.
|}
=== Shimizu's 4 Cs: in the 7Cs Compass Model ===
After Koichi Shimizu proposed a 4 Cs classification in 1973, it was expanded to '''the 7Cs Compass Model''' to provide a more complete picture of the nature of marketing in 1979. The 7Cs Compass Model is a framework of [[co-marketing]] (commensal marketing or Symbiotic marketing). Also the Co-creative marketing of a company and consumers are contained in the co-marketing. Co-marketing (collaborate marketing) is a marketing practice where two companies cooperate with separate distribution channels, sometimes including profit sharing. It is frequently confused with [[co-promotion]]. Also commensal (symbiotic) marketing is a marketing on which both corporation and a corporation, a corporation and a consumer, country and a country, human and nature can live.<ref>Shimizu, Koichi(1989) "Advertising Theory and Strategies," (Japanese) first edition, Souseisha Book Company in Tokyo. ({{ISBN|4-7944-2030-7}}) pp. 63-102.</ref><ref>Shimizu, Koichi (2014) "Advertising Theory and Strategies,"(Japanese) 18th edition, Souseisha Book Company ({{ISBN|4-7944-2132-X}}) pp. 63-102.</ref><ref>Shimizu, Koichi (2016)"Co-marketing (Symbiotic Marketing) Strategis,"(Japanese) 5th edition, Souseisha Book Company ({{ISBN|978-4-7944-2482-2}}) pp. 25-62.</ref><ref>Solis, Brian (2011) Engage!: The Complete Guide for Brands and Businesses to Build, Cultivate, and Measure Success in the New Web, John Wiley & Sons, Inc. pp. 201–202.</ref><ref>French, Jeff and Ross Gordon (2015)"Strategic Social Marketing,"SAGE Publications Inc., p. 90.</ref>
*The 7Cs Compass Model comprises:
'''(C1) [[Corporation]]''' – The core of ''4 Cs'' is corporation (company and non profit organization). C-O-S ([[competitor]], [[organization]], [[Stakeholder (corporate)|stakeholder]]) within the corporation. The company has to think of [[:wikt:compliance|compliance]] and [[accountability]] as important. The competition in the areas in which the company competes with other firms in its industry.
'''The 4 elements in the 7Cs Compass Model''' are:
A formal approach to this customer-focused marketing mix is known as ''4 Cs'' ([[commodity]], [[cost]], [[Marketing channel|channel]], [[communication]]) in the ''7 Cs Compass Model''. The ''4 Cs'' model provides a [[demand]]/[[customer]] centric version alternative to the well-known ''4 Ps'' supply side model ([[Product (business)|product]], [[price]], [[Distribution (business)|place]], [[Advertising campaign|promotion]]) of marketing management.<ref>McCarthy, Jerome E. (1975) ''Basic Marketing: A Managerial Approach'', fifth edition, Richard D. Irwin, Inc., p. 37.</ref>
*[[Product (business)|Product]] → [[Commodity]]
*[[Price]] → [[Cost]]
*[[Distribution (business)|Place]] → [[Marketing channel|Channel]]
*[[Promotion (marketing)|Promotion]] → [[Communication]]
{| class="wikitable"
|-
! "P" category (narrow)
! "C" category (broad)
! "C" definition
|-
| [[Product (business)|Product]]
|(C2) [[Commodity]]
| (Latin derivation: commodus=convenience, happiness) : Co-creation. The [[good (economics)|good]]s and [[service (economics)|service]]s for [[consumer]]s or citizens.
|-
| [[Pricing|Price]]
|(C3) [[Cost]]
| (Latin derivation: constare= It makes sacrifices) : There is not only producing [[cost]] and selling cost but purchasing cost and [[social cost]].
|-
|[[Distribution (business)|Place]]
|(C5) [[Marketing channel|Channel]]
|(Latin derivation: canal) : [[marketing channel]]s. Flow of goods.
|-
|[[Promotion (marketing)|Promotion]]
|(C4) [[Communication]]
|(Latin derivation: communis=sharing of meaning) : [[marketing communication]] : Not only [[promotion (marketing)|promotion]] but [[communication]] is important. Communications can include [[advertising]], [[sales promotion]], [[public relations]], [[publicity]], [[personal selling]], [[corporate identity]], [[internal communication]], [[Social networking service|SNS]], [[Management information system|MIS]].
|}
'''The compass of consumers and circumstances (environment)''' are:
*'''(C6) [[Consumer]]''' – (Needle of compass to consumer)
:The factors related to consumers can be explained by the first character of four directions marked on the [[compass]] model. These can be remembered by the [[cardinal directions]], hence the name ''[[compass]] model'':
:*N = [[Needs]]
:*S = [[Security]]
:*E = [[Education]]: ([[consumer education]])
:*W = [[Wants]]
*'''(C7) [[Circumstances (rhetoric)|Circumstances]]''' – (Needle of compass to circumstances )
:In addition to the consumer, there are various uncontrollable external environmental factors encircling the companies. Here it can also be explained by the first character of the four directions marked on the [[compass]] model:
:*N = [[Nation]]al and International ([[Political]], [[legal]] and [[ethical]]) environment
:*S = [[Social]] and [[Culture|cultural]]
:*E = [[Economic]]
:*W = [[Weather]]
These can also be remembered by the cardinal directions marked on a compass. The ''7 Cs Compass Model'' is a framework in [[co-marketing]] (symbiotic marketing).
It has been criticized for being little more than the ''4 Ps'' with different points of emphasis. In particular, the ''7 Cs'' inclusion of consumers in the marketing mix is criticized, since they are a ''target'' of marketing, while the other elements of the marketing mix are ''tactics''. The 7 Cs also include numerous strategies for product development, distribution, and pricing, while assuming that consumers want two-way communications with companies.
An alternative approach has been suggested in a book called '''Service 7''<nowiki/>' by Australian Author, Peter Bowman. Bowman suggests a values based approach to service marketing activities. Bowman suggests implementing seven service marketing principles which include value, business development, reputation, customer service and service design. Service 7 has been widely distributed within Australia.
==Digital Marketing Mix==
'''Digital marketing mix''' is fundamentally the same as '''Marketing Mix''', which is an adaptation of '''Product''', '''Price''', '''Place''' and '''Promotion''' into digital marketing aspect.<ref name="ReferenceC">{{cite journal|last1=Dominici|first1=G|title=From Marketing Mix to E-Marketing Mix: A Literature Review|journal=International Journal of Business and Management|date=2009|volume=8}}</ref> Digital marketing can be commonly explained as 'Achieving marketing objectives through applying digital technologies'.<ref name="DM">{{cite book|last1=Chaffey|first1=Dave|last2=Ellis-Chadwick|first2=Fiona|title=Digital marketing: strategy, implementation of and practice|date=2012|publisher=Pearson Education|location=Harlow|edition=5th}}</ref>
'''Product'''
Thanks to the interaction and connection of the Internet, '''[[Product (business)|Product]]''' has been redefined as 'virtual product' in the digital marketing aspect, which is regarded as the combination of tangibility and intangibility. Through the form of digital, a product can be directly sent from manufacturers to customers.<ref>{{cite book|last1=Pastore|first1=A|last2=Vernuccio|first2=M|title=Marketing, Innovazione e Tecnologie Digitali. Una lettura in ottica sistemica|date=2004|publisher=Cedam|location=Padua(IT)}}</ref> For example, customers could buy music in the form of an MP3 rather than buy it in the form of a physical CD. As a result, when a company is making strategy for Internet marketing, it is necessary to understand how to vary their products in the online environment. Here are some indications of adapt the product element on the Internet.<ref name="DM"/>
* Modifying the [[core product]]: In this case, it particularly refers to the products that can be remodeled into digital forms including movies, music, books and other publishing etc. Take '''[[Netflix]]''' as an example. The wide use of Internet has changed its form of products from selling and renting DVDs through retail stores into selling and renting video online.
* Providing digital products: In order to gain market shares in the Internet, companies need to widen its product range. For example, a psychological counseling could offer online consultation via video calls.
* Building the [[whole product]]: Apart from selling products online, '''[[Amazon.com]]''' also provides a paid subscription service called '''[[Amazon Prime]]''', with which customers could enjoy free delivery and videos on Amazon.
* Conducting online research: The Internet offers a low-cost and convenient way of making marketing researches, which is helpful for companies to find out what products or services do customers prefer.
'''Price'''
'''[[Pricing|Price]]''' concerns about the pricing policies or pricing models from a company. Due to the wide use of the Internet, many applications could be found in both consumer's and producer's perspective. From consumers' side, the Internet enables people to make a comparison to real-time prices before they make a consumption decision, which is time-saving and effort-saving for the consumers.<ref name="An analysis of the virtual value ch">{{cite journal|last1=Bhatt|first1=Ganesh D|last2=Emdad|first2=Ali F|title=An analysis of the virtual value chain in electronic commerce|journal=Logistics Information Management|date=2001|volume=14|issue=1/2|pages=78–85|doi=10.1108/09576050110362465}}</ref> As for the suppliers, they can adjust prices in the real-time and provide higher degree of price transparency with customers. Besides, the Internet is more likely to ease the pressure on price because online-producers do not have to put budget on renting a physical store.<ref name="DM"/> Hence, making new or adjusting pricing strategies is essential for the company that wants to enter the Internet market.
Pricing strategies and tactics see also: '''[[Pricing]]'''
'''Place'''
With the application of the Internet, '''[[Distribution (business)|place]]''' is playing an increasingly important role in promoting consumption since the Internet and the physical channels become virtual.<ref name="ReferenceC"/> The major contribution from the Internet to the business is not only making it possible to selling products online, but also enabling companies to build relationships with customers.<ref name="An analysis of the virtual value ch"/> Furthermore, since the convenience of navigating from one site to another, '''place''' from the digital marketing perspective is always linked with '''promotion''', which means retailers often use third-party websites such as Google search engine to guide customers to visit their websites.<ref name="DM"/>
'''Promotion'''
'''[[Promotion (marketing)|Promotion]]''' refers to selecting the target markets, locating and integrating various communication tools in the marketing mix. Unlike the traditional marketing communication tools, tools in digital marketing aim at engaging audiences by putting advertisements and content on the social media, including display ads, pay-per-click (PPC), search engine optimisation (SEO), influencers etc.<ref name="DM"/> When creating online marketing campaigns, Chaffey and Smith suggested that they can be separated into six groups:<ref>{{cite book|last1=Chaffey|first1=D|last2=Smith|first2=P.R|title=Emarketing Excellence, Planning and optimising your digital marketing|date=2008|publisher=Butterworth-Heinemann|location=Oxford|edition=3rd}}</ref>
* Search marketing, including [[search engine optimisation]](SEO), [[pay-per-click]](PPC).
* Online [[Public relations|PR]], encouraging positive comments about one's products or services while reducing negative comments.
* Online partnerships, building relationships between third-party webs to promote products or services.
* [[Interactive advertising]]
* [[Opt-in e-mail advertising]]
* Social media marketing, starting and participating in customer to customer, customer to company interaction through social media.
==Difficulty of computational methods==
Automatically selecting the attributes of a product (in any category, i.e. product, promotion, etc.) to maximize the number of customers preferring the resulting product is a [[Computational complexity theory#Intractability|computationally intractable]] problem.<ref name="RodriguezRabanalRubio"/> Given some customer profiles (i.e., customers sharing some features such as e.g. gender, age, income, etc.), the valuations they give to each potential product attribute (e.g. females aged 35–45 give a 3 out of 5 valuation to "it is green"; males aged 25–35 give 4/5 to "it can be paid in installments"; etc.), the attributes of the products sold by the other producers, and the attributes each producer can give to its products, the problem of deciding the attributes of our product to maximize the number of customers who will prefer it is [[APX#f(n)-APX|Poly-APX-complete]]. This implies that, under the standard computational assumption, no efficient algorithm can guarantee that the ratio between the number of customers preferring the product returned by the algorithm and the number of customers that would prefer the actual optimal product will always reach some constant, for any constant. Moreover, the problem of finding a strategy such that, for any strategy of the other producers, our product will always reach some minimum average number of customers over some period of time is an [[EXPTIME#EXPTIME-complete|EXPTIME-complete]] problem, meaning that it cannot be efficiently solved. However, heuristic (sub-optimal) solutions to these problems can be found by means of [[genetic algorithm]]s, [[particle swarm optimization]] methods, or [[Minimax#Combinatorial game theory|minimax algorithms]].
==See also==
*[[Advertising]]
*[[Co-creation]]
*[[E. Jerome McCarthy]]
*[[Marketing]]
==References==
{{Reflist|30em}}
==Further reading==
* {{cite book | url=https://www.highbeam.com/doc/1G2-2830600254.html | archive-url=https://web.archive.org/web/20170828102629/https://www.highbeam.com/doc/1G2-2830600254.html | url-status=dead | archive-date=August 28, 2017 | work=Overview: Marketing Mix: Product, Price, Place, Promotion |date=January 1, 2008 | title=Everyday Finance: Economics, Personal Money Management, and Entrepreneurship }}
* {{cite journal | title=Milestones in Marketing | journal=Business History Review | url=http://www.hbs.edu/faculty/Publication%20Files/Milestones%20in%20Marketing_Quelch_Jocz_cca1547e-d4e1-4470-8f92-edc877bebaf7.pdf|volume=82 |date=Winter 2008 | pages=827–838 | publisher= The President and Fellows of Harvard College | author1=John A. Quelch | author-link=John Quelch | author2=Katherine E. Jocz | doi=10.1017/S0007680500063236 }}
* {{cite book | author1=John A. Quelch | author-link=John Quelch | author2=Katherine E. Jocz | title=All Business is Local: Why Place Matters More than Ever in a Global, Virtual World | publisher=Penguin | year=2012 | page=4 }}
*[https://web.archive.org/web/20120306105651/http://www.ppbmag.com/Article.aspx?id=1981 Four P's, Four C's And The Consumer Revolution]
==External links==
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* [https://web.archive.org/web/20120306105651/http://www.ppbmag.com/Article.aspx?id=1981 Four P's, Four C's And The Consumer Revolution]
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[[Category:Marketing techniques]]
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