The marketing mix.

The marketing mix has several specific targets that can all collate together. (Jobber 2001) Suggests the strength of the four P’s approach is that it represents a memorable and practical framework for marketing decision making. This can help to keep staff motivated and moving in the same direction but to many people it oversimplifies the reality of marketing management in the 21st century. (Gronroos 2002) Such a product based strategy can lead to a seemingly strong base product well advertised not leading to short or long term profitability because it is not exactly what the customer is looking for.

In the 21st century customer expectation has become higher than ever and with more purchasing freedom of choice than ever before the job of attracting and retaining customers has become more and more difficult. There has also been a realization that (Wilson, Gilligan 1992. P.190) ‘A 5percent increase in customer retention can result in anything from a 25per-cent to a 125per-cent boost in profitability’. A marketing strategy strong in the area of customer retention has to be given serious consideration. Relationship marketing is aimed at creating long term customer and supplier relations. With this greater freedom of choice also comes a greater risk of making an incorrect purchase. (Gronroos 2000) points out that an ongoing relationship can offer customer security and a minimized purchasing risk vitally important in an ever diversifying and often confusing marketplace. A recent study recorded in (Buttle 1996) found that just a 5per-cent increase in customer retention at HSBC (large banking corporation) led to a 160per-cent increase in profitability by the fifth year. This is an acute example where relationship marketing is very likely to be the best option but it must be realized that not all such relationships are profitable in the long term. Tesco’s and Dunnes Stores for example done away with there loyalty card for customers as it was costing too much to run with little tangible long term benefits for the company. (Jobber 2001) Companies must therefore try to distinguish between profitable and non-profitable relationships as the short term costs of creating these relationships can be quite high.

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The marketing mix strategy can also have similar problems of hefty upfront costs. It is aimed at a target market which has usually been defined by market research. In depth and accurate market research is usually costly but can be very effective. Some companies that are particularly competitive in one of the four P’s can often be very effective at attracting new customers. German supermarket chain Aldi compete mainly on low prices and this can be a key motivating factor in drawing new customers particularly in times of recession. Price can in certain ...

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Promotion and place can also act as strong motivators in attracting a new and larger customer base. For several years during the nineties and at the turn of the century the footwear brand Kicker’s created a branding image very popular amongst young people and particularly young males. Designed and promoted to be the must have fashion accessory of schoolchildren and priced at the top end of the mid-range footwear market they became market leader almost overnight and dominated for several years despite a recognized lack of quality and durability in the product. The company during this period of dominance built up a strong brand loyalty and in a customer relationship giving it a platform to move into also becoming a large scale clothing brand. The characteristics and priorities of this target market are such that a marketing mix strategy with a robust promotion and place policy are likely to prove successful but it has also proven that this approach can also then be fused with a relationship marketing strategy to then develop the company’s place in the market. This is not true of every market.

Priorities are very different in areas such as the five star hotel industry or the luxury car market. Quality of service is paramount and in this area relationship marketing is especially strong.(Kotler 2001) Every guest at the Ritz has there own personal created so a preference for say a foam pillow noted in its Montreal hotel will be provided for months later in the London Ritz. Such relationship building creates a strong customer loyalty in the long term. (Buttle 1996. P.5) Notes a cross industry trend ‘Sales and profits per account increase the longer the relationship lasts’.