FUNDAMENTALS OF MARKETING 5
Themodern definition of marketing describes marketing as the process ofcreating, communicating, delivering, and exchanging value with thecustomers (John et al., 2012). However, the traditional ways ofmarketing view the process concerning its major components commonlyknown as the four Ps, that is, product, place, price, and promotion.There is a clear distinction that the modern definition iscustomer-oriented while the latter is sellers-oriented. Consumers donot just buy a product or service for what it is but because of thevalue attached to. Even though both the four Ps and value approachesare strategies of marketing, there is a great difference between thetwo methods, a firm can also be successful with either one of thismarketing approaches depending on the organizational environment thatone is undertaking its business. When it comes to the value approachto marketing, the process involves intangible attributes that arecreated in the minds of the customers. Value creation approach,therefore, is initiated by creating awareness and positive appeal ofthe products and services to the clients.
Creatingis the process of offering a solution to the customers’ needs. Thisis an improvement of the component product in the firms applyingtraditional or four Ps marketing approach.
Communicatingrefers to offering information and documentation describing theproduct usage. In companies applying 4 Ps approach, communication isused interchangeable with promotion in the traditional marketing.
Deliveringrefers to getting the products and services to the customers with anaim of optimizing value.
Exchangingis the trading value of the offers provided to the customers.
Thefirst of the four Ps of the marketing mix is the product (Banting &Ross, 2010). The product is either tangible or intangible that meetsthe needs and wants of the customers. The product is therefore, whatactually goes to the consumer’s side. The other component of the4Ps, is the price. It is very essential to the firm since it is onlythe component that generates revenue to the firm, all others are costto the firm. The pricing strategies determine the profit margin andthe equilibrium in the product market (Guiltman, 2010). Promotionrefers to the various ways by which an entity disseminate relevantproduct information to the customers. It constitutes elements likeadvertising, public relation, and user training. Lastly, we have theplace, and various scholars have argued that marketing is putting theright product, at the appropriate price, in the right place, and atthe right time. This element in the marketing mix therefore insistson availing or making the products accessible to the user whereverthey are needed and in the right quantity. Demand forecasting is veryimportant as it helps the sellers to know where the products areneeded.
Distinguishingbetween companies using four Ps approach and those using valueapproach
Theselection of the marketing strategy will always depend on somefactors such as the type of business, level of competition, theelasticity of demand/supply, and company’s policies andregulations. A company that aims at maximizing revenue will alwaysuse 4Ps approach. On the other hand, a company whose main objectiveis to acquire large market share to facilitate its growth andexpansion will use value approach. Value approach creates positiveappeal to the customers, unlike 4Ps approach which is sellersoriented. The 4 Ps approach can therefore be successful with monopolyand oligopoly firms while value approach remains the best in theperfectly competitive industry (Banting & Ross, 2010).
Banting,P., & Ross, R. E. (2010). Journal of the Academy of MarketingScience. Retrieved 10 March, 2016,from: http://www.springerlink.com/content/mn58860185200184
Guiltman,S. (2010).Marketing Management: Strategies and Programs.London: McGraw Hills/Irwin.
JohnF., Tanner, and Mary A. (2012). Principles of Marketing. Retrieved 10March, 2016,from http://www.saylor.org/site/wp-content/uploads/2013/02/BUS203-PoMCh1.pdf