Marketing and selling in tough economic conditions:

Coping with uncertainty

When developing marketing strategies:

Article 22

Series by: Prasanna Perera, Marketing and Management Consultant, Chartered Marketeer, CIM U.K.

Marketing as a discipline has undergone many changes over the years and is now a fully fledged complex discipline. Many marketing managers have to be able to deal with uncertainty and are beginning to discover that the old system of working with the marketing mix (4 P’s), although helpful when formulating strategies, is no longer a sufficient framework for addressing the new challenges posed by changing markets and technologies.

The marketing mix (4 P’s) - Is it too simplistic?

The 4 P’s have been criticized as a somewhat limited view of the scope and nature of marketing, specially in the light of the complex and evolving market scenarios. In such a background, marketing needs to have a much higher profile and needs to embrace a much more holistic view.

To do so, will require the marketing concept to be embraced more closely and to become more “customer-centric”. Being customer oriented has never been as easy or as difficult, as it is now. On the one hand, the growth of better information systems means that the range and breadth of customer information can be made available at any place, at any time. On the other hand, even with this up-to-date information availability, being customer oriented is posing difficulties for many organizations.

The marketing mix is no longer “static” and “place” is no longer a fixed location. Similarly, promotion is no longer confined to a product, but goes beyond to the brand that is being communicated. Pricing also varies considerably to reflect seasonal and other factors. Products are also being customised to suit individual customer requirements. Given these factors, the 4 P’s seem to be a strait jacket from which marketing needs to break free.

The advent of the internet and wireless communications technologies offers a different perspective on the 4 P’s. One of the key features of the new electronic communication media is the consumers ability to control both contact and contents. As such, normal marketing practices should be revisited and revised accordingly. The impact on the 4 P’s due to information related developments are as follows:

Pricing - Due to internet related developments, pricing comparisons are easier and hence, the old price mechanisms will not work. Pricing should be carried out to reflect the “added value” and should not be based on cost-plus or margin approach to pricing.

Place - Instead of a fixed geographic location, online consumers have the option of “virtual” locations. Internet marketers should focus on building a user-friendly online environment, to enhance customer experience on the internet.

Promotion - Instead of the conventional “offline” promotional mix, the “online” dimension is now possible.

Online promotions can support offline promotions and vis-a-vis. Marketing Communications needs to be information rich and have a multi-dimensional focus.

Product - In the digital marketing environment, consumers can get involved in product development, by designing their own products. Therefore, the consumer has a broader influence on the product element.

All these developments are leading towards a more relational rather than transactional approach to marketing. The customer is part of the transactional process, not an idle recipient of a product augmented by price, promotion and directed to a location for purchase.

Business ethics as a source of competitive advantage

The marketing practice now uses a range of databases and internet marketing. Internet marketing shows that some organizations implement actions such as pop-ups, banner advertising and hyperlinks, which intrudes the personal privacy of the customer. With the advent of mobile communications, the potential to become even more intrusive is greater. As such, organizations that wish to differentiate themselves from their competitors, will have to develop clear marketing ethics, to retain customers.

Consumer purchase behaviour is changing

In response to major shifts in consumer purchase behaviour, marketing has moved away from transactional to relationship building, with the customer. The consumer is not a simple static demographic profile but changes and evolves over time, exhibiting a range of attitudes, behaviours and experiences. As such, marketers are now called upon to build comprehensive databases and also to track consumer purchase behaviour effectively. Changes in consumer purchase behaviour has also implications in segmenting markets.

Corporate social responsibility/social marketing

Social Marketing issues are likely to explode, as issues surrounding health, environment and other social aspects increasingly grow in importance. It is no longer adequate to simply satisfy the customer through a transactional/exchange process but to also do so, in a socially responsible manner. Over consumption of products and services, specially in the developed world is creating social unrest and other problems relating to health. In social marketing, the transactional marketing mix should be utilised to effectively communicate the benefits.

The product would be the benefits offered, made available at a reasonable price. The exchange process should be carried out at a location convenient and appropriate messages should be communicated to the target audience. Hence, social marketing initiatives should not only be confined to communication, but encompass the entire marketing mix.

Adding interest to the social marketing phenomenon, is the growing emphasis on rural marketing. A major proportion of the world’s population lives in rural areas.

However, with the advent of satellites, it is possible to market goods and services to rural locations. At the same time, it is possible for individuals within rural communities to market their own products more easily.

In this article, I have attempted to highlight the challenges that are faced by marketeers, as they grapple with the dynamic and complex changes taking place. The world is changing fast and this must be reflected in marketing strategies.

Technology, particularly the internet plays a crucial role in bringing markets closer and mobile communications are making it easier for distance communities and individuals to communicate easily.

The profile of consumers is changing. In rich nations consumers are becoming more sophisticated and demanding, whilst in poorer countries many consumers have still to be reached. In marketing terms, organizations should not be judged by the return on investment alone but by a wider range of measures. The old models of marketing need to be revisited and adapted to the needs of the new generation.