Classic Marketing Mix Theory and the 4 P's

Professor Neil Borden at Harvard Business School introduced first in the 1960s the concept in the marketing literature identifying a number of organizational performance actions that influence consumer’s decision making on purchasing a product or service. Borden (1965) suggested that these actions represent a “Marketing Mix” of twelve different elements.

Marketing theory during the last 50 years focused its development on the marketing mix concept simplifying these actions in four basic elements, the 4 P’s (Price, Product, Place and Promotion). American Marketing Association adopted this also in the definition of Marketing and academics found it easily communicated to their students, in order to explain how Marketing works.

The marketeer aims to create an exchange that satisfies the consumer and the organization by deciding on the proper mix (adjusting the price – not necessarily of a monetary only value, the product or service specifications, the distribution and availability or the market segment that the product or service is addressed, the advertising, branding, sales promotion etc.).

Marketing Mix seems to explain better packaged consumer products or durables (mostly of low value) but it seems to face limitations when a higher value of consumer goods or an industrial product or service is in discussion.

Clarkson, Clarke-Hill and Robinson (1997, p. 4 of 20) also refer to Gummesson (1987) and Ford (1990) criticisms about Marketing Mix: “Gummesson (1987) suggested that the application of the marketing mix concept to areas other than consumer goods can be destructive, as it fails to recognise the unique features of, for example, services marketing and industrial marketing. Ford (1990) and the IMP Group have a similar view; they criticise the four P’s approach for trying to transfer its analysis to industrial markets where the only differences between approaches occur through greater emphasis on the sales force than on advertising and the occasional inclusion of a service function.”

Grönroos (1990;1992;1994;1995) considers that the Marketing Mix concept is nothing more than a list of P’s without theoretical roots and oversimplified, a production rather orientated than market orientated view. More suitable for the so called Transaction Marketing, Marketing Mix concept focuses mainly on a single transaction, considering an active seller and a passive buyer.

Kotler (1999) proposes the 4 C’s of Marketing (Customer Value, [Lower] Cost[s], [Better] Convenience, [Better] Communicating); in the Industrial Age the firm would focus on Market Share, while today the firm should focus on Customer Share (to increase business with existing customers, focusing on customer retention, customer loyalty, customer satisfaction), using cross-selling, up-selling and customer referrals.