Download Marketing A summary of the article “The Concept of the Marketing

Marketing
A summary of the article “The Concept of the Marketing Mix” By Neil H. Borden
Group Members: Rasmus Hansen, Bastien Brel, Nicolas Fariney, Nicolas Deprez, Mattheu Rioult, Maja
Nagelj, Can Emrah Yaldiz, Tuomas Telaranta, Dana Niv.
The phrase “Marketing Mix” refers to the different marketing elements that are mixed together to
create a marketing campaign. It came from Borden’s colleague’s article where he read that a business
executive must be a “a mixer of ingredients” and is then compared to a chef whereby the executive may
sometimes use an existing recipe, and sometimes experiment or even invent a new ingredient to add to
the recipe (Culliton, 1964). It was clear that these “mixers of ingredients” were using creative and
innovative ways to market their products. The article refers to case studies at Harvard business school
that made it apparent that the variety and quantity of the marketing “ingredients” required to run a
profitable business was variable. One study could not find similar cost ratios for various marketing
functions between the firms studied, even when the segments were changed to reflect different
business aspects the cost ratios remained disparate. The question, as Borden aptly put it was “What
combination of marketing procedures and policies has been or might be adopted to bring the desired
behavior of trade and consumers at costs that will permit a profit?”
Borden assumes that for the marketing functions within a firm to be successful the firm’s departments
and the elements within the marketing mix must work holistically. Therefore, if one aspect of the mix is
changed so must the proportions of the different elements that go into the marketing mix (particularly
applicable to the advertising function that carries a lot of weight within marketing). Accounting for this
interdependence is important so that the marketing fits the product or service provided by the firm, and
enables its success within the market.
In order to develop a model that is not industry or firm specific, there needs to be a broad view of the
marketing mix and the market factors that influence it. The following lists are what Borden described to
be the elements of the marketing mix:
1. Product Planning – Decisions and policies relating to the product lines, markets in which they
will be offered, and decisions about new products.
2. Price Planning – Decisions and policies relating to price level, price policy and margins.
3. Brand – Selection of trademarks, brand policies, and whether to sell the product branded or
unbranded.
4. Channels of Distribution – channels between factory and customer, degree of selectivity when
using distribution channels, and the efforts made to gain cooperation from the trade.
5. Personal Selling—the extent to which this is used within the manufacturer’s organisation, the
wholesale market, and the retailer.
6. Advertising – How much to spend, is it a product or a corporate image that is being promoted,
and who is it aimed at?
7. Promotion – to what extent does the firm promote its products with special offers, and what
form would these offers take when the customer sees them?
8. Packaging – The design and form of packaging.
9. Display – Importance to sales and ensuring security.
10. Servicing – which services to provide to customers?
11. Physical Handling – the handling of inventory, transportation and warehousing.
12. Fact finding and analysis – The finding and eventual use of this information.
These elements have later been grouped in to four very well known categories, the 4P's (product,
promotion, price, place). Borden also listed the market forces affecting the marketing mix:
1. Consumer’s buying behaviour – Motivation to buy, buying habits, living habits, environment,
buying power, and the amount of consumers.
2. Trade behaviour – Wholesaler’s and retailer’s behaviour depending on motivation, structure
attitudes and changing trends in procedure.
3. Competitor’s position and behaviour – the amount of influence this has on the firm depends on
the concentration of firms within the industry and the general structure of the industry as well
as the threat of substitutes. Is the supply and demand within the market balanced? What does
the industry offer the customer in terms of quality, price, and service offered? To what degree
does the industry compete on a non-price level? What is the likely response of competitors to
any changes made in the firm? And how would technological and social trends affect the
demand for the product or service?
4. Government behaviour – Regulations put on products, the price, competition policy and
regulation of promotion.
As mentioned in the third point of the latter list, it is extremely important for the marketing executive to
find the position of their firm within the industry. If the firm is small and has very limited resources they
may want to operate on a more local scale by pushing the product instead of attempting an impressive
national scale marketing campaign that would result in a pull effect. The marketer must “devise a mix of
marketing methods that conform and adjust to [forces of the market] in ways to produce a satisfactory
net profit figure.” (Borden) meaning the marketer must consider the factors listed above, balance them
with the interests of various stakeholders and only following this assessment must they make decisions
about the resulting marketing campaign.
The marketing executives must continuously assess the firm, and its external environment in order to
allow for an appropriate balance of the elements of the Marketing Mix, because the company is
consistently under threat from external factors (price and non-price competition, government regulation
etc.) The continuous assessment allows marketers to evaluate how well strategies and tactics are
operating in the short term. Long term forecasts are also necessary because they are the key to
identifying general changes in market and consumer behaviour, and good forecasts can lead to early
market leader positions on new markets.
The Marketing Mix was a result of the demand for a useful theoretical “aid to thinking” about
marketing. The Marketing Mix is used by marketers and academics alike. Primarily it is used as a tool to
facilitate learning about marketing and effective marketing methods. It can be used a problem solving
tool whereby a better understanding is formed of the different elements affecting the Marketing Mix
and therefore allows marketers to appreciate the interdependence of these elements.
Borden looks at marketing as a kind of amalgamation of both art and science where empirical evidence
in the form of sales, or profitability can be used to assess and qualify the quality of the “art”. The
Marketing mix is merely an aid to focusing the creative energies of the marketer to the right channels.