Identify and explain three advantages to customers when a ...
Marketing mix of a product includes 4Ps as follows:
• Product
• Price
• Place
• Promotion
There is an addition of 3 other Ps in the marketing mix of services, which are as follows:
• Physical Evidence
• People
• Processes
Differentiating marketing mix is a broad term as it includes differentiating any or all the marketing mix elements or changing one or more marketing mix elements. Following are the advantages customers get, while firms differentiate their marketing mix:
1. When a company cuts prices to attract new customers or competitor’s customers, it has to either lower down its costs or/and reduce its profit margins. Eventually, it is the customers who are benefited by lower prices of a company. For example Ikea, a world-renowned furnishings retailer, has been giving customers surprisingly lower prices by cutting its costs in furniture assembling and customer service. After being the cost leader, Ikea now also offers furniture delivery for additional prices. In short, the customers who are more price sensitive will opt for no delivery, no assembling option by the company, to enjoy the low prices. Customers for who delivery is more important shall enjoy the other option.
2. When a company differentiates its marketing mix by moving to different marketing channels such as internet, customers also get benefits. Customers save time, energy and costs by ordering products online. In addition customers can also view and select from different variety of the products available. Comparing prices, features, models and designs of products of different brands also becomes easier for customers online. Tiffany is one such example of a company, which has extended its product-marketing channel by letting the customers select jewellry and accessories online, and thus has differentiated its marketing mix from competitors.
3. When a company differentiates its marketing mix by offering new or improved product and services, buyers get the advantage. By changing the product characteristics such as quality and performance, features, style, packaging, durability and reliability. For example, the car manufacturers restyle their cars to attract buyers who want a new look. Therefore, buyers enjoy different and restyled variety of the car by the same manufacturer.
Positioning is the image of a product in the minds of consumers in comparison to its competitors’ image. The competitive positioning of the brand is clearly influenced by differentiation of marketing mix. The company which has improved the quality of its product and has communicated well to its customers, enjoys a strong and more reliable image and therefore, has enhanced its competitive positioning. Another company which uses new mediums of communications such as internet, will also enjoy the image of a more versatile and dynamic company in consumers’ minds compared to its rivalries and thus superior competitive positioning.
Reference
• Principles of Marketing, 12th edition, by Philip Kotler and Gray Armstrong
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