Advanced Marketing Management
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Advanced Marketing Management

Principles, Skills and Tools

Nikolaos Dimitriadis, Neda Jovanovic Dimitriadis, Jillian Ney

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eBook - ePub

Advanced Marketing Management

Principles, Skills and Tools

Nikolaos Dimitriadis, Neda Jovanovic Dimitriadis, Jillian Ney

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About This Book

Marketing as a practice is facing unprecedented challenges: a changing media landscape, an increasingly complex customer journey, innovative technologies, start-ups which disrupt traditional channels and a new generation of tech-savvy clients. How should students and practitioners adapt to this shifting landscape and address the skills gap that many of today's marketers face? Advanced Marketing Management prepares students for this new world of marketing. Since traditional marketing approaches fail to provide convincing solutions to modern business realities, a new approach is urgently needed if marketers are to regain trust within their organizations. Using contemporary examples, business case studies and supporting pedagogy, Advanced Marketing Management will provide a critical exploration into the more advanced aspects of marketing management, including the gap that exists between formal marketing literature and real-world practice, discussion of multidisciplinary tools, and the crucial evolution of the '4Ps'. Summarizing a large body of literature and academic research on new developments, this book is the go-to guide for students, lecturers and practitioners, wanting to succeed as modern marketers. Online resources include lecture slides and further questions for group discussion.

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Information

Publisher
Kogan Page
Year
2018
ISBN
9780749480387
Subtopic
Vertrieb
Edition
1

06

The 4EPs marketing mix, part 1

Empathic product and experiential price
CHAPTER LEARNING OBJECTIVES
After studying this chapter, you will be able to:
  • Understand why the original 4Ps marketing mix model is still alive and why it needs an update instead of a total replacement.
  • Question the practice of many companies globally not allowing marketers to be in control of price and place as much as they are of promotions and product.
  • Appreciate the role of empathy and emotions in building and commercializing products and services.
  • Emphasize the importance of psychology in shaping customers’ experiences with prices.
Advanced practice
Deciem: innovating all four Ps in the skincare industry!
Skincare is considered by some insiders as an industry often troubled by overblown claims, overpromising messages and unclear product composition, and one that could benefit greatly by higher transparency in marketing and more honest brands overall (Mpinja, 2017). It is not by accident that one of the most famous quotes in business and marketing ever, according to The Economist (2012), is the one by Charles Revson, founder of global cosmetics company Revlon, saying that: ‘In our factory we make lipstick [lipstick often replaced in online sources with cosmetics]. In our advertising we sell hope.’ But how can brands break free from old, tired and misguided marketing practices and enter a new era of product transformation, market disruption and higher connectivity with consumers? Is such innovation enough when it concerns only one of the traditional Ps or should it be covering all of them simultaneously? What can innovative brands teach us for the modern application of marketing mix models?
Deciem, a disruptive Canada-based skincare brand, leads the way in applying contemporary practices through the whole spectrum of marketing mix activities. With the suggestive tagline The Abnormal Beauty Company and the intriguing title The Founder Is Screwed Up! on the company’s website page on founder and CEO Brandon Truaxe (Deciem, 2018a), the brand’s intention to differentiate itself as much as possible from traditional cosmetics companies is very clear. But how does it do it in practice? Is this intention just a PR exercise or is it a full-blown strategy touching upon every aspect of the brand’s marketing effort? As it seems, this innovative and differentiating approach lies at the very core of Deciem’s brand DNA and is manifested in its actions. Using the traditional 4Ps marketing mix model, here are some of the things Deciem is doing to disrupt the cosmetics market and to continue striving towards being ‘a serious player in the beauty biz’ (Mpinja, 2017):
  • Product. Deciem is using trusted, known, simple ingredients with proved efficacy. Product ranges and individual products are straightforwardly named, like The Ordinary range and the Granactive Retinoid 5 per cent in Squalane product. Packaging is also straightforward and simple, looking more like dropper bottles out of a science lab than traditionally sleek-designed cosmetics. Labelling is white, clinical and no-nonsense looking. In its simplicity and direct appeal, Deciem is trying to be more true, uncomplicated and connected to customers’ needs than traditional brands. The product’s truth has now to be felt deeply through empathic processes
 and not just to be bought or consumed.
  • Price. This is the big surprise. Most of the products under Deciem’s most successful range, The Ordinary, are priced under US $10. According to Allure Magazine’s Mpinja (2017), Deciem is trying to reverse the mental ‘programming’ that the cosmetic industry has imposed on consumers to consider some products, such as serums, as premium, luxurious and thus expensive. Instead, Deciem treats its products less as cosmetics and more like health-care ones. Pricing is no simple affair: the traditional mark-up models (such as cost plus margin) and market-positioning models (such as luxury pricing) are now replaced with more complex scientific approaches based on customer experience.
  • Place. Deciem products are available from a wide variety of channels. As the brand itself proclaimed in a post: ‘we are all over the place, both literally and figuratively’ (Krause, 2017). The company is using a franchise system to expand its physical locations with mono-brand stores all over the world and it makes its products widely available through its own and partnering companies’ online and offline shops, such as Sephora (Deciem, 2018b). The opening statement from Deciem’s 2017 Instagram post mentioned above is not at all far from the truth for modern marketing: products and services have to be available wherever and whenever customers want them. Choosing one channel over the other is a strategy of the past. Today, and tomorrow, you need to be everywhere!
  • Promotion. Deciem is constantly present in online communications by portraying a truthful, genuine and ultimately humane face. This unpolished and gutfeel-like presence resonates deeply with people solidifying its main brand position and creating huge growth surges for its products. At the end of 2017 there was a waiting list of 75,000 people for two of Deciem’s newest make-up products (Mpinja, 2017). Promotion cannot be categorized any more into one-way (old style) and two-way (new style). It goes beyond that and into creating relations and human interactions by engaging people emotionally and behaviourally. As founder Truaxe said, ‘skincare purchases are driven by communication with people’ (Hou, 2018), and this can be nowadays said for almost all products and services in the world!
Not all is rosy though. The backlash that the founder experienced after posting a video online, talking negatively about some online comments that were going against his very open opinions posted frequently online, led some industry commentators, and some customers, to doubt the longevity of such an extreme transparency approach (Hou, 2018). The situation became even more heated when Deciem’s co-CEO Nicola Kilner left the company, senior members of the US team got fired, and Truaxe continued posting edgy and controversial messages on the brand’s social media (Rodulfo, 2018). Nevertheless, business continued growing at a high speed (Wischhover, 2018).
The global success of the brand and the rapid growth of its sales, which are based on a more advanced and modern marketing mindset, which sometimes may not exclude or avoid controversies, show that marketers need to re-examine their ways and reapproach their marketing mix practices. Only then will advanced marketing be fully deployed, and its benefits fully ripped.

The marketing challenge

One of the most enduring concepts in marketing is the marketing mix model of the 4Ps. In Chapter 1 we discussed the concept, its historical development and some of the criticism against it. Here we will do the opposite. We will support it. This is for two reasons:
Reason 1. The need and tendency to abolish the model and to replace it with new ones did not manage to produce any alternative that took its position in global marketing literature and practice. Even the ones that claimed to just ‘reinterpret’ the 4Ps for specific industries, like the most recent SAVE model for business to business (B2B) tech-driven markets (Ettenson, Conrado and Knowles, 2013), SAVE standing for Solutions–Access–Value–Education, did not dethrone the 4Ps, regardless their certain popularity. In our understanding and experience, many times the urge to replace the 4Ps has been driven by a genuine belief that there can be a better model and many times by a more self-centred career-advancement and glory-seeking motive, sometimes from both. In any case, this urge has not really worked. Dan Bladen, co-founder and CEO of Chargifi, a wireless-charging start-up and a Marketing Week’s 100 Disruptive Brand, said it clearly and emphatically (Bacon, 2017): the 4Ps ‘still offer a strong backbone to a marketing strategy’. The fact that he is coming from a tech start-up, which usually renounces old marketing concepts and practices, makes his statement even more interesting and important.
Reason 2. There is convincing evidence from research showing that the 4Ps are still very effective in practising marketing worldwide. In an influential article titled ‘The gap between the vision for marketing and reality’ in Sloan Management Review, Kotler et al (2012) reported on a global IBM study of 1,700 top marketers from a wide variety of industries. Findings indicate that the better-performing companies, and companies that find themselves more prepared to deal with future challenges, are the ones that scored higher in controlling the full pallet of their marketing mix, meaning all 4Ps. The study revealed that promotion was the P most controlled by marketers, scoring an average of 4.2 on a scale measuring intensity of control from 1 to 5; followed by product, which scored 3.4; place, with 3.2; and price with 3.1. It is obvious that marketers have not gained full control of marketing elements regardless of the 4Ps model being taught for more than 60 years! The article concludes that (Kotler et al, 2012): ‘As organizations and markets have become more complex, the need for a less compartmentalized view of marketing is even more apparent today.’ This 4Ps-related point is made not only by researchers but by marketing practitioners too. As Pete Markey, Brand Communications and Marketing Director at London-based multinational insurance company Aviva, puts it (Bacon, 2017):
You can have the best communications in the world but if your price or product is wrong, it’s not going to work
 That’s why the 4Ps are so relevant now, because they remind us that marketing is so much more than just advertising.
So, the marketing challenge for advanced marketing leaders is this: how to use the 4Ps today to develop their brands, connect to customers and provide business-wide value to their companies. This is not an easy task. First, the model itself seems to be constantly under attack. Second, not all companies provide the right amount of control to their marketers for dealing with all marketing elements in the mix. Third, technology has taken the focus of marketing away from a holistic approach, which included pricing and distribution, to more online community management and big data-driven customer insights. The time is right for marketers to reclaim their territory and lead their companies by integrating all crucial elements needed for brand success. To do so, they need an updated version of the 4...

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