eMarketing eXcellence by Dave Chaffey and PR Smith 1

CHAPTER 2
OVERVIEW OF THE
MARKETING MIX

eMarketing eXcellence by Dave Chaffey and PR Smith

 OVERALL LEARNING OUTCOME
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eMarketing eXcellence by Dave Chaffey and PR Smith

 OVERALL LEARNING OUTCOME
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 By the end of this chapter, you will be able to:

• Understand the online implications of each element

of the marketing mix.
• Extend each element of the mix into the online
world.
• Begin to plan each element of the mix in the online
world.

eMarketing eXcellence by Dave Chaffey and PR Smith

 Introduction to remix
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• The marketing mix is a well-established conceptual

framework
• Helps marketers to plan their approach to each market.
• At worst, it provides a checklist of decisions which marketers
must make.
• At best, marketers integrate, or mix, these decisions together
and allocate their resources accordingly.
• Online developments affect
• every aspect of business,
• every aspect of marketing and
• every aspect of the marketing mix.
• So do we have to throw out the old marketing mix
concept or can it still be applied? Is a radical remix
needed?
eMarketing eXcellence by Dave Chaffey and PR Smith
 What is Marketing Mix?
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• Canadian Jerome McCarthy (1960) coined the term

the ‘4Ps’: product, price, place, promotion.
• The four Ps are controllable variables which, when
planned and carefully mixed together in the right
way, satisfy customers.
• ‘A marketer is like a chef in a kitchen . . . a mixer of
ingredients’.
• American academics Booms and Bitner then
developed the 7Ps, sometimes known as the service
mix (Booms and Bitner, 1981).
• They considered that the extra Ps – people,
processes and physical evidence – were crucial in
the delivery of services.
eMarketing eXcellence by Dave Chaffey and PR Smith
 What is Marketing Mix? (Continued)

• People create and deliver a service – if they aren’t

happy, the service falls apart. At first people are those
who create those service or product. But new e-mix talk
about people as customer who create experience for
other customers.
• Processes are even more important as the process of
production is not behind closed doors (as in the case of
products), but open for all to see.
• In addition, crystal-clear processes have proven
themselves critical in the successful use of social media.
• Finally, when buying intangible services, many
customers rely on cues given from tangible, or physical
evidence (such as uniforms, badges and buildings).

eMarketing eXcellence by Dave Chaffey and PR Smith

 The 7Ps of Classical Marketing
Mix
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eMarketing eXcellence by Dave Chaffey and PR Smith

 Extending the mix – 5 I’s
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 Some feel that for interactive marketing, Peppers and

Rogers’s 5Is (1997) should replace the 7Ps in the
information age .
 The 5Is do not supplant the 7Ps, but rather are complementary to
them
 Since the 5Is define the process needed
 Whereas the 7Ps are the variables that the marketer controls.
• Identification – customer specifics
• Individualization – tailored for lifetime purchases
• Interaction – dialogue to learn about customers’ needs
• Integration – of knowledge of customers into all parts of the
company
• Integrity – developing trust through non-intrusive marketing
eMarketing eXcellence by Dave Chaffey and PR Smith
such as permission marketing?
 Extending the mix – 4 Cs
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 Some marketing analysts feel that the marketing mix can

lead to a product orientation rather than a customer
orientation.

 To mitigate this effect, Lautenborn (1990) suggested the

4Cs framework, which considers the 4Ps from a customer
perspective. In brief, the 4Cs are:

 Customer needs and wants (from the product)

 Cost to the customer (price)
 Convenience (relative to place)
 Communication (promotion).
eMarketing eXcellence by Dave Chaffey and PR Smith
 Beyond the mix
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• Before choosing the marketing mix, marketing strategy

first determines target markets and required brand
positioning.
• Won’t think Short-term mix but ‘long term’
• Choosing a mix that nurtures ‘lifetime customers’ and grows
‘share of wallet’
• Each marketing-mix decision affects customer relations.
• Relationship marketing permeates all the decisions that
marketing managers have to make about the mix.
• Excellent marketers have skills built into all their
decisions regarding the marketing mix.
• Database skills,
• Partnership skills and
• Relationship skills
eMarketing eXcellence by Dave Chaffey and PR Smith
 The Mix is Morphing!
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• Generating conversations on social media platforms

enhances;
• The product experience (product),
• Promotes the brand (promotions),
• Spreads the accessibility of a brand (place) and
• Is totally dependent on well-trained teams (people) who are
given crystal-clear systems and processes (processes).
• Since they add value, promote the brand and put it into
everyone’s pocket via their phone by:
• Effectively bringing several Ps together (product, promotion
and place).

eMarketing eXcellence by Dave Chaffey and PR Smith

 Product
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• Find the ideal product that you can

• deliver,
• can afford,
• are good at,
• can protect and
• go for it.
• The online world allows you to create a whole
range of new versions, variations and even new
products and services.
• Play to your strengths and exploit your distinctive
competitive advantage
• Having a strong and clear Online Value Proposition
(OVP).
eMarketing eXcellence by Dave Chaffey and PR Smith
 Product

 What benefits do you deliver to your customers?

 Can they be delivered online?

 What other benefits might your customers like?

 Can these benefits be delivered online?

 What is your business? Can it be delivered online?

Ghosh (1998) suggested that companies should consider how to modify
product and add digital value.
 Product

 ROPO purchasing (Research Online Purchase

Offline).

 Prosumer : The proactive consumer who

participates in the design of products or
services

 Communities of customers can be tapped!

15

eMarketing eXcellence by Dave Chaffey and PR Smith

 The Extended Product

 Quality and Credibility are inextricably linked

 Endorsements
 Awards
 Customer lists and numbers
 Customer comments
 Warranties
 Guarantees
 Money-back offers
 White papers (product guide with complex products)
 Staff photographs
 Social proof such as the number of subscribers,
circlers, fans.
 Price
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• The Internet is changing pricing for ever. Prices are

under pressure.
• Pricing structures and options are becoming more
complex.
• It is crucial to get the pricing right in the short, medium and
long term.
• Review new price structures in your markets, driven
by customers looking for lower prices available
through a range of online tools. This includes:
• Reverse auctions
• Commoditization (thin margins and are sold on the basis
of price)
• Cyber-mediaries (particular information or service needs,
online insurance, real estate broker)
• Info-mediaries (information about anything)
• Shopping bots. (Price and product comparison website)
eMarketing eXcellence by Dave Chaffey and PR Smith
New Pricing Approaches
 Impression Vrs Page-view
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Impressions refer to the number of times a

visitor sees a specific element of a page --
usually displayed advertisement
When a Web user visits one of the pages
on your website, it counts as one
pageview. 

eMarketing eXcellence by Dave Chaffey and PR Smith

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eMarketing eXcellence by Dave Chaffey and PR Smith

 Click through rate
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 CTR is the number of clicks that your ad

receives divided by the number of times
your ad is shown: clicks ÷
impressions*100
 For example, if you had 5 clicks and
100 impressions, then your CTR would
be 5%.
 If CTR is above 1% , you are going
towards right direction

eMarketing eXcellence by Dave Chaffey and PR Smith

 Model of Conversion and
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Bounce rate

eMarketing eXcellence by Dave Chaffey and PR Smith

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eMarketing eXcellence by Dave Chaffey and PR Smith

 PAY PER CLICK (PPC)
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 Pay-per-click (PPC), sometimes referred

as cost per click (CPC), is an internet
advertising model used to direct traffic to
websites, in which an advertiser pays a
publisher (typically a Search engine or a
network of websites) when the ad is clicked
 But before PPC , the advertiser develops his
ads on Google Adwords.
 Highly targeted.
 Worst ads in PPC
25

Never put your URL in the first

selling line

Don’t advertise on the

portal where you don’t
belong

*Other points
re-check your campaign,
spelling and should be highly
targeted.
eMarketing eXcellence by Dave Chaffey and PR Smith
 CPM ( Cost per Mille)
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 Cost per mille (CPM), also called cost per

thousand (CPT).The CPM model refers to
advertising bought on the basis of
impression. This is in contrast to the various
types of pay-for-performance advertising,
whereby payment is only triggered by a
mutually agreed upon activity 
 CPM= (ADVERTISEMENT BUDGET/NO. OF
IMPRESSION)*1000
 Main purpose : to create maximum
awareness.
eMarketing eXcellence by Dave Chaffey and PR Smith
 CPA (cost per acquisition)
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 Under a cost per action (CPA) campaign,

the advertiser pays only for clicks that
subsequently see visitors complete some
specific action. This action can be a
purchase of a product, download of a
document, sign-up for a newsletter /
membership, or countless other steps.

eMarketing eXcellence by Dave Chaffey and PR Smith

 Place
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• Distribution, or place, is crucial to the success of

any enterprise.
• Assuming your organization has a reasonable
product or service, online or offline the principle
is the same:
• Increase your representation and make it widely and
readily available to target customers.
• Marketers today need to think of multi-channels
for distribution
• Ensure they make their products and services easily
available to as many ideal customers as possible.

eMarketing eXcellence by Dave Chaffey and PR Smith

 New Distribution Models
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 Disintermediation – this is removing the

middleman to deal direct with customers instead
of through agents, distributors and wholesalers.
 Note that this can create channel conflict as
middlemen feel the squeeze. Hewlett-Packard to
hospitals example.
 Reintermediation – this is the emergence of new
types of middlemen who are brokers, such as
Bizrate, which unites buyers with sellers.
 Infomediation – a related concept where
middlemen hold data or information to benefit
customers and suppliers.
 New Distribution Models
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 Peer-to-peer services – music swapping services

such as Napster and Gnutella opened up an
entirely new approach to music distribution with
both supplier and middleman removed
completely.
 Promotion
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• All ten communications tools should be

reviewed for how they can be extended and
enriched online.
• Online communications challenges include: mix,
integration, creativity, globalization and
resourcing.
• Take advantage of the characteristics of the
new media through:
• Promotion that is dynamic
• Carefully targeted
• Highly relevant and
• Helps to build an ongoing relationship
• Based oneXcellence
eMarketing the permission and
by Dave Chaffey andtrust of the customer
PR Smith
 Promotion
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eMarketing eXcellence by Dave Chaffey and PR Smith

 Promotion
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 Chevrolet’s Tahoe advertisements break

new ground

eMarketing eXcellence by Dave Chaffey and PR Smith

 People
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• People are the differentiating factor that has helped many

‘clicksand-mortar’ companies out-perform the virtual
companies.
• Service – before, during and after a sale – is required if repeat
business is to be enjoyed.
• Contact strategies should be developed
• Give customers choice of contact, but minimize costly interactions
with staff.
• Automated services help, but people are also required.
• Beware of the customer service time bomb.
• It is a delicate balancing act when integrating online and offline
marketing activities.
• Recruitment, training and motivation are required.
• Happy staff = happy customers = happy shareholders.
eMarketing eXcellence by Dave Chaffey and PR Smith
 Delivering Online Service
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How well does your site make use of the following?

 Auto-responders. These automatically generate a response when
a customer emails an organization or submits an online form.
 Email notification. Automatically generated by a company’s
systems to update customers on the status of their order: for
example, order received, item now in stock, order dispatched.
 Call-back facility. Customers fill in their phone number on a form
and specify a convenient time to be contacted. Dialling from a
representative in the call centre occurs automatically at the
appointed time and the company pays, which is popular.
 Real-time live chat. A customer support operator in a call centre
can type responses to a site visitor’s questions; for example, a
widely deployed technology such as LivePerson
(www.liveperson.com).

eMarketing eXcellence by Dave Chaffey and PR Smith

 Delivering Online Service
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 Frequently asked questions (FAQs). For these, the art is in

compiling and categorizing the questions so that customers
can easily find (a) the question and (b) a helpful answer.
 On-site search engines. These help customers to find what
they’re looking for quickly and are popular when available.
 Co-browsing. Here, the customer’s screen can be viewed by
the call-centre operator in combination with callback or chat.
 Virtual assistants. These come in varying degrees of
sophistication and usually help to guide the customer through
a maze of choices.
 Customer reviewers and assistants. Online social media
enable organizations to recruit customers to help shape their
service for other customers through reviews and comments.

eMarketing eXcellence by Dave Chaffey and PR Smith

 Physical evidence
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• Customers look for online cues and clues for reassurance.

Web sites can provide these in the form of
• High-quality site design and reassurance – through guarantees,
refund policies, privacy policies, security icons, trade body
memberships, awards, customer lists, customer endorsements,
independent reviews, news clippings and more.
• Encourage web site visitors to print coupons or white
papers as physical evidence to keep your company at the
front of their minds.
• Offline activities can provide reassurance in the form of
• Professional-looking buildings,
• Delivery vans and uniforms.
• Evidence, whether physical or digital, needs to be
managed constantly.

eMarketing eXcellence by Dave Chaffey and PR Smith

 Physical evidence
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The big four reasons why people come back to a site:

1. High-quality content
2. Ease of use (navigation)
3. Quick download
4. Frequently updated
 Physical evidence should help to integrate the online
and offline world.
 Many retailers such as the Carphone Warehouse
(www.carphonewarehouse.com) use coupons printed out
online which can be redeemed for a discount at a store.
 This helps conversion-to-sale rates and also tracks how the
online presence is impacting the offline sales.

eMarketing eXcellence by Dave Chaffey and PR Smith

 Process
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• Process refers to the internal and sometimes external

processes, transactions and internal communications
that are required to run a business.
• Excellent execution of these is vital.
• Given the customer service time bomb,
• There is a golden opportunity to develop lifetime customers
• Deep and engaging customer service processes online.
• Good processes and systems can create competitive
advantage.
• There are lots of poor processes that kill sales and
damage the brand.
• Processes can have a huge impact on your organization.
eMarketing eXcellence by Dave Chaffey and PR Smith
 Optimizing Internal Processes
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These are some of the events that need to happen,

and they must be backed up by an efficient, seamless
process:

 Customer wants to check

 Product specification or price is changed
 Customer places order
 Customer makes email enquiry
 Product dispatched

eMarketing eXcellence by Dave Chaffey and PR Smith

 An extra ‘P’ –
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partnerships
• We cannot do everything ourselves. Partnerships can help
enormously, but they require skilled management.
• Marketing marriages and alliances can be potent, but need
experienced management.
• In the online world, many e-retailers now have staff
dedicated to managing online partnerships, particularly for
affiliate marketing.
• Some companies have people specializing in partnerships;
other companies employ agencies to be their partners or
even agencies to find their partners through;
• Blogger outreach programme (to connect with more bloggers) or
• Affiliate marketing campaign (to recruit more affiliate marketers).
• There is no doubt that partnerships need to be identified,
recruited and nurtured for success.
eMarketing eXcellence by Dave Chaffey and PR Smith