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The Marketing Mix in the Digital Age Part 1: Price, Product, Promotion, and Place in the Context of Sports Brands

The marketing mix has been one of the core elements of marketing since the middle of twentieth century (cf. Kotler and Keller, 2012). The following article elaborates on the traditional components of the marketing mix, namely price, product, promotion, and place, in part one and discusses the extension to 8 Ps, including peoplephysical evidenceprocess management, and productivity and quality in part two. The discussion defines the individual components and sets them into the context of the digital age with examples in sports business. An exploratory analysis of the contemporary marketing mix of a sports brand will be offered in part three. It shall be used as an example for students and professional on how to best approach such an analysis. 

Introduction

Marketing can be defined as a business activity that helps ‘introduce and gain acceptance of new products that ease or enrich people’s lives’ (Kotler and Keller, 2012, p. 4). In order to achieve that goal, strategies and tactics need to be developed along a set of marketing components, also known as the marketing mix (cf. Borden, 1964). McCarthy (1960) defined the original 4 Ps of marketing by including the 4 components priceproductpromotion, and place. This mix was later updated and expanded in various marketing literature, which, however, vary to different degrees in their perspective and terminology regarding the marketing mix components. A prominent update resulted in the conception of the 7 Ps of the services marketing mix, which first added the components peoplephysical evidence, and process management(Wilson and Gilligan, 2005). It was later expanded to 8 Ps with the addition of productivity and quality (Lovelock et al., 2008). Figure 1 offers a visualised overview of the 8 Ps of a contemporary marketing mix. The following sections will elaborate on each of the four traditional components and outline their importance in the marketing mix with examples of sports brands and how to best conceptualise and apply them. 

Figure 1: The 8 Ps of a contemporary marketing mix
Figure 1: The 8 Ps of a contemporary marketing mix

Price

Price refers to “the monetary cost incurred by the buyer” (Fetchko et al., 2019, p. 21). It is used as an indicator of product quality and benefits, where higher-priced products can be perceived to provide higher quality as compared to lower-priced products and may be less susceptible to competitive offers of rival brands; the price component can therefore have a positive effect on brand equity (Yoo et al., 2000). Expectations regarding the perceived quality of the product or service are to be managed by defining the most appropriate price, which “must reflect the quality of the product as well as how the product is promoted and distributed to consumers” (Shank, 2003, p. 55). Lovelock et al. (2008) note that other costs of service—such as time, mental and physical efforts, as well as unpleasant sensory experiences like noises and smells—can be perceived as indirect costs which may lower the perceived quality of the experience of using the product or consuming the service. 

How does this apply to different product categories, for example in the case of a sports brand? Marketers need to consider pricing for distinctive sports products that their organisation provides. One product category needs to consider the price for the admission ticket to experience the sporting event in a stadium or other venue, e.g. football match, ice hockey game, race, fight, etc. (Shank, 2003). Similarly, the price to watch the event through pay-per-view (PPV) or on over-the-top (OTT) needs to be reviewed and set, which, however, requires the organisation doing marketing to own the rights to broadcasting the event (cf. Fetchko et al., 2019). Furthermore, any kind of branded merchandise, such as jerseys and other items that carry the name of the sports team or athlete, needs to be carefully priced in order to compete in a saturated sports merchandise marketplace (cf. Fetchko et al., 2019). A further pricing category refers to sponsorships, which in sports this can range from venue naming rights to jersey sponsorships and billboards in the stadium as well as digital media co-branding (Fullerton, 2010). As mentioned above, all prices need to reflect the perceived quality for which the customers pay, be it in a B2C or B2B situation. For example, if stadium goers feel that the admission fee to watch a football match in the stadium is too high compared to the sporting experience provided, they will reconsider a next attendance or, worse, renewing their season ticket, if they are season ticket holders. Regarding watching a match on PPV or OTT, if the price seems excessive in relation to factors like, for example, reporters’ commentaries, ease of access, or production quality, viewers may not return for watching a next match. Similarly, merchandise needs appropriate pricing. Although, a strong brand equity can reduce a buyer’s fear about overspending for a piece of clothing that may elevate their self-esteem (cf. Aaker, 1991)––think Air Jordan sneakers, New York Yankees caps, or Real Madrid jerseys––pricing of such merchandise needs careful attention, because various lifestyle brands have understood the importance of brand equity, which makes the space more competitive (Schmitt, 1999). In sports sponsorship, a strong interest is given to the maximum possible reach provided by the sports brand, which the sponsoring company buys into (Newman et al., 2013). In a pre-Internet era, this was limited to the exposure in the sports venue, on brand publications for direct mailing to customers, and, where applicable, on TV broadcasting (cf. Shank, 2003). In the digital era, a wide reach across various digital and social media channels can make the case for a higher price; this is especially well visible with athlete-influencers (Carnahan, 2020). 

Three perspectives of pricing

Prices are set based on three perspectives: the customer-based perspective reflects on ‘What will the market bear?’; competitor-based considers ‘What do competitors charge?’; and cost-based asks ‘What margin should we make?’ (Cram, 2008). Figure 2 portrays the pricing forces at work: The potential price range starts at the floor price, which is defined by the costs incurred by the company to produce the product or service; the range then ends at the ceiling price, which is defined by the customers’ ability to buy the product or service. The perception of the adequacy of the price for the offered product or service is based on the impact that brand marketing has on consumers. This includes how well the brand can show and communicate the value received by purchasing the brand and to which degree the brand and its products is considered to be superior to its competitors. When researching the impact that the price component may have on the perceived quality of a product or service the following items may be included in a questionnaire: “The price of X is high.”; “The price of X (focal brand) is low. (reverse-coded)”; “X is expensive.” (Yoo et al., 2000). 

Pricing should be based upon the balance between the questions, ‘How much are our customers willing and able to pay, how much more or less than our competitors shall we charge, and what margins should we make?’ (Cram, 2008). Although, some sports fans are said to be highly vested and price-insensitive when it comes to a sports brand or club they like—or rather love—(Stewart et al., 2003), there will be a threshold they will not be willing to cross regarding expenditures for experiencing that sports product. For example, if the stadium experience, which includes ticket, traveling to the venue, and occasionally food and drinks, becomes too expensive to bear, some customer classes will not be willing or even able to afford it anymore (cf. Taylor, 2020). Rethinking the desired (or necessary) margins that need to be made on top of the product’s floor pricing help to define a more appropriate price. Comparing the prices of competitors with one’s own price can give a better understanding of what the market can bear. If higher margins and therefore higher prices are envisaged, then the additional value that can be expected from consuming the product should be communicated (Yoo et al., 2000). For example, if an item like a sweater that carries the brand name on the chest and is considerably higher priced as compared to competitors’ products, then the characteristics that legitimize the higher price should be clearly communicated; this could include explaining the local sourcing of the production, informing customers that a certain amount of the revenue goes to charity, the higher quality of the materials used in the production etc. Lastly, asking customers and fans, if they perceive the prices for the various products to be high, low, or adequate for the provided quality can provide essential feedback in the adaptation of the price or the quality of the product.

Figure 2: Pricing (Cram, 2008, p. 289)

Product

Mullins et al. (2016) define the product component in the marketing mix as “anything that satisfies a want or need through use, consumption, or acquisition” and add that “products include objects (TVs, radios, cars), services (medical, educational), places (New York, Moscow), people (Barack Obama and other politicians everywhere), activities (entering a contest or visiting a weight- loss clinic), and ideas (have you hugged your kids today?)” (p. 9/3). During the wider creation process of a product or service, an essential task for marketing managers is to “select the features of both the core product (either a good or service) and the bundle of supplementary service elements surrounding it, with reference to the benefits desired by customers and how well competing products perform” (Lovelock et al., 2008, p. 1/20). With regard to the digital age, Dominici (2009) refers to Yudelson (1999) and proposes that the product element in the contemporary marketing mix should be redefined as “all the benefits through time that the user obtains from the exchange” (p. 19), which is in line with the previous definition. Kotler and Keller (2012) add that a great product is at the heart of a great brand and “to achieve market leadership, firms must offer products and services of superior quality that provide unsurpassed customer value” (p. 325); in order to achieve said goal, they suggest five product levels organised hierarchically according to benefits and customer-value (see Figure 3): 

Level 1: Core benefit. What are the fundamental benefits customers buy into? A sports fan may buy entertainment, excitement, relaxation, or a reason to spend time with friends or family to escape day-to-day life for a couple of hours. The company should see itself as the provider of such a benefits.

Level 2: Basic product. Based upon the defined core benefits, the company designs the product or service. For example, in order for a sports club (i.e. football, basketball, ice hockey, etc.) to offer entertainment, a team needs to be assembled, a stadium or venue built or rented, games need to be organised and communicated, staff and helpers employed, and games held. 

Level 3: Expected product. Potential customers in the targeted audience expect certain conditions and attributes from the product. For example, the broadcast of a football match on TV or online streaming platform should be stable and without technical issues (e.g. buffering, time-lag, etc.), should be a multi-camera production, include professional and competent commentators, possibly pre- and post-match interviews or commentaries, etc. 

Level 4: Augmented product. Customers’ expectation can be exceeded by augmenting the product or service through the delivery of “functional and affective value above and beyond core and expected products, [which], in turn, help companies differentiate themselves from competitors and improve market performance”; this means that design attributes such as aesthetics, features, and emotion establish the value perceived by customers in regard to visual authority, monetary worth, mutual relationship, and self-expression and impacts purchase intention (Kim et al., 2017). Continuing with the example above, the football match broadcast should be aesthetically pleasing with appealing branding elements (e.g. logos, colours, transitions, music, multiple commentators, multi-camera production, etc.); it should include various features such as slow-motions of replays, interactive elements like a dedicated hashtag for second-screening or other possible interactions, statistics of the game, etc.; and it should elicit emotions through consistent storytelling of the brand or its athletes. 

Level 5: Potential product. After having considered the four previous levels, the potentially final product or service can be produced. At this level, the company seeks to satisfy its customers’ needs (and more) and distinguish itself from competitors. For example, DAZN, a sports broadcaster, aims to offer more additional content on football (or other sports) games than Netflix and position itself as a more focused and knowledgeable sports platform. This could elevate their brand and attract more vested sports viewers. 

For the sports realm, Shank (2003) defines the product as “a good, service, or any combination of the two that is designed to provide benefits to a sports spectator, participant, or sponsor”, for which benefits can be intangible or tangible (p. 54-55). Important is the addition of the ‘sponsor’ target audience, which highlights a business-to-business (B2B) relationship in addition to the business-to-customer (B2C) relationship, and the emphasis that perceived benefits can be tangible or intangible. 

Figure 3: 5 Product Levels: The Customer-Value Hierarchy (Kotler and Keller, 2012, p. 326)

Promotion and integrated marketing communications

Marketing campaigns rely on effective promotion and communications to reach their goals, which includes, but is not limited to, delivering information about products and the brand, persuading target audiences of the benefits of the product, and encouraging potential customers to take action (Lovelock et al., 2008). The idea of messages delivered through what was traditionally called the promotional mix is to accompany potential customers through their customer-journey and try to achieve a specific objective along that journey (Mullins et al., 2016). The digital age has brought considerable changes to the channels and opportunities offered by or through the promotional mix, which in contemporary marketing has evolved what now is commonly known as the ‘integrated marketing communications mix’ (IMC mix) (cf. Batra and Keller, 2016). There is no one established IMC mix, but a variety of different mixes. In an article on this blog called «The integrated marketing communications mix in the digital age: Defining the promotional channels with examples of Paris Saint-Germain», a contemporary IMC mix is proposed based on recent literature. The mix is depicted in Figure 4, and an in-depth elaboration on the marketing and communications channels within the IMC mix is offered in the above-linked article. 

Integrated marketing communications mix
Figure 4: Proposed integrated marketing communications mix (source: Mereu, 2020a)

Batra and Keller (2016) propose the following eight objectives along the customer-journey, which the IMC mix aims to achieve: 

Create awareness and salience. Brands need to make sure that their target audiences are aware of the products and services offered, which can be achieved by being appropriately prominent across influential channels such as advertising, direct marketing, personal selling, website and search, and, possibly, as a sponsor at events (Batra and Keller, 2016). For example, an online sports broadcaster like DAZN could promote an event such as The Super Bowl, the annual championship game of the National Football League (NHL), by advertising it on third-party websites and social media platforms with display ads or sponsored posts, send emails to the right viewers through their CRM system, or communicating the broadcasting of the NFL with banners or similar at events sponsored by DAZN. Personal selling may not directly apply in this specific example, although it may have great influence in another setting. For example, a consumer may be undecided on which sneaker to buy and consults her or his contacts on Twitter. If Nike happens to see such a post, they could jump in an explain why a specific sneaker could be the right sneaker for that person.

Convey detailed information. Holistic brand experiences include an educational component through which consumers can learn about a brand in order to make informed decisions such as whether or not to buy the brand’s products or services (Pine and Gilmore, 1999). The same applies to an online environment, where information is shared via, for example, a brand’s website or newsletter. McCarville and Stinson (2014) note that consumers feel more comfortable about a brand when they find or receive value-adding information, which means brand should simplify the flow of information about their products and services. Hence, it becomes essential to create a well-organised and easy to navigate virtual experience that offers visually appealing and value-adding content underlining the purpose of the website or newsletter (Palmer, 2002; Ryan, 2016). For example, a football club like Manchester City FC would share as many details as possible about a new jersey on their online shop, including size, price, stock, product description, delivery, returns, payment possibilities, etc. The same can be done through other adequate channels, however, while adapting the delivery where necessary.

Create imagery and personality. In that regard, Batra and Keller (2016) suggest that communication channels with most influence on consumers in regard to brand imagery and personality are TV (advertising) and social media. Advertising and other paid media reaches a wide audience that may not know about a brand (Ryan, 2016). Similarly, social media has a wider reach than traditional media (Newman et al., 2013). A possible approach is to emphasising aesthetics and entertainment (Pine and Gilmore, 1999). For example, Nike’s #DareToZlatan advertising campaign from 2014 was based on strong aesthetics portraying football star Zlatan Ibrahimovic as a super-athlete and offering great entertainment value (see Bianchi, 2014). 

Build trust. Brand trust is best built through public relations (PR), social media, and personal selling (Batra and Keller, 2016). One aim of PR is for the brand to be mentioned in the communication of third-party media outlets, such as a TV channel, magazine, website, news portal, social media, or similar. Such a mention is perceived as unbiased and neutral, which is different from the perceptual people have when they encounter an ad (Schwartz et al., 2013). For example, when French football club Paris Saint-Germain (PSG) entered a partnership with Qatar Airways (see Mereu, 2020a), the collaboration would ideally be reported by third-party media outlets to offer an objective and unbiased view. Social media can have great influence on building brand trust, especially when the brand involves the community and cherishes the brand-and-customer relationship (Laroche et al., 2013). This means, a brand such as PSG should ensure that customers and other community members perceive the brand as available and active online; basically, showing that PSG is an active member of the fan community and appreciates the social interactions and contributions of its members (Kietzmann et al., 2011). 

Elicit emotions. Schmitt (1999) underlines that marketing activities aiming to stimulate sentiments should appeal “to customers’ inner feelings and emotions, with the objective of creating affective experiences that range from mildly positive moods linked to a brand (e.g., for a noninvolving, nondurable grocery brand or service or industrial product) to strong emotions of joy and pride (e.g., for a consumer durable, technology, or social marketing campaign)” (p. 61). Advertising, PR, events, and social media can have the greatest influence on recipients of the message (Batra and Keller, 2016). Belch and Belch (2003) claim that “emotions generated by [an advertisement] are important because they may become associated with the advertised product through classical conditioning” (p. 125). A good example is Nike’s commitment to the Black Lives Matter movement, which is of great importance to their target audience and community (see Nike.com, 2020). Nike created a marketing campaign with commercials (YouTube.com/Nike, 2020), made sure the media would talk about it (e.g. Mirzaei, 2020), NBA athletes would wear Nike shirts with ‘Black Lives Matter’ print at sporting events (Mauch, 2020), and all of it would be shared across social media to evoke emotions (see #blacklivesmatter nike). 

Inspire action. After consumers have gone through the journey of becoming aware of a brand, learning about its products and services, understanding the brand’s image and personality, trusting it to be a legitimate brand to buy into, and forging positive emotions towards it, the next step is to inspire specific actions (Batra and Keller, 2016). One of the most used and effective ways to inspire action online is direct marketing, or more specifically, email marketing (Hudak et al., 2017). In order to achieve the expected conversion, logical call-to-action elements need to be defined and applied; this is best undertaken by introducing a product or service via a sales pitch or message, which is followed by a visually unmistakable call-to-action button appropriately placed within the email (Ryan, 2016; Kumar and Salo, 2016). Figure 5 shows a PSG marketing email with call-to-action buttons. It could be argued that the price buttons in red are more prominent than the actual call-to-action button ‘j’achête’ in white. 

Figure 5: Official PSG marketing email from 9 April 2020 (source: Mereu, 2020a)

Instil loyalty. Once a consumer buys a brand’s product or service and converts to a customer, the marketer’s task of keeping that customer happy becomes even more important in order for that customer to buy again from the brand, which means the brand wants the customer to become loyal (Kotler and Keller, 2012). In that regard, it is essential to recognise that the four dimensions of a brand experience impact brand loyalty; brands must therefore provide a complete experience based on aesthetics, emotions, information, and engagement (Brakus et al., 2009). These experiences are individually offered at various stages of the customer journey leading up to this point. However, a brand needs to appropriately synthesise the experiences (i.e. communication) around the four dimensions and keep offering them to customers. A possible approach is to create a content marketing plan; see article «10 steps to create a content marketing plan for a football product: How to promote the Milan Derby» on this blog. A brand could create content for various online channels based upon the four brand experience dimensions, meaning they could deliver relevant information, evoke emotions through affective stories, set the mood with beautiful and intriguing visuals (i.e. photos and videos), and engage fans in discussion around the running campaign. Publishing these contents in accordance with a strategically designed calendar would foster the meaning and importance of the story that is told (Laurell and Söderman, 2018). 

Connect people. Batra and Keller (2016) note that “High consumption satisfaction should lead to brand repurchase behavior and loyalty, but this may not, by itself, create brand advocacy” (p. 132). Hence, brands need to support and encourage people to engage and connect with each other, especially since portable computer devices, i.e. smart phones and tablets, enable consumers to consumer and engage with their favourite brand anytime and anywhere (Sutera, 2013). Social media on mobile devices can be considered the most effective channel to achieve said goal (Newman et al., 2013). Vale and Fernandes (2018) found that in social media “the need for Information, Empowerment and Brand Love mainly drive Consumption, Contribution and Creation, respectively” (p. 49). This means that in order to drive engagement, fans on social media want relevant information, want to be able to influence others, and need to be emotionally attached to the brand. 

Figure 6 concludes this section giving an overview of the degree of influence that specific communication options, i.e. channels, can have on the desired outcome.

Figure 6: Influence of communication options on communication outcomes (source: Batra and Keller, 2016, p. 129)

Place

The last of the four Ps in the traditional marketing mix is place, which is often also referred to as distribution; this component considers how consumers are concerned with the convenience of purchasing a product or service in a given distribution network (Mullins et al., 2016). Lovelock et al. (2008) add that products and services may be delivered through physical or electronic distribution channels or a combination of both––whatever adds value to the customer; furthermore, products and services could be delivered “directly to customers or through intermediary organisations, such as retail outlets owned by other companies, which receive a fee or percentage of the selling price to perform certain tasks associated with sales, service and customer-contact” (p. 1/20). Yoo et al. (2000, p. 203) ask the following three questions in their quantitative study in order to assess how consumers perceive the distribution intensity of a product: (1) “More stores sell X, as compared to its competing brands.” (2) “The number of the stores that deal with X is more than that of its competing brands.” (3) “X is distributed through as many stores as possible.” Consequently, a sports brand with global aspirations, like, for example, English football club Chelsea FC, would want to (1) have their jerseys sold in more stores than their competitors online and offline, (2) be more visible across online and offline stores than their competitors, and (3) be as visible as possible across a large variety of stores online and offline in order to stay top-of-mind with consumers. A specific and wide distribution network is highly relevant when building brand equity, because it simplifies the purchase process offering consumers more access to the product or service (Abril and Rodriguez-Cánovas, 2016). 

In regard to place/distribution, a digital product or service needs to assess the potential ‘reach’ the brand can achieved through a specific online platform, which leads marketers to ask themselves, ‘How many potential customers could my brand reach on which online platform?’ (cf. Hutchins and Rowe, 2012; cf. Statista, 2020). However, not only ‘general reach’ is essential, but also ‘relevant reach’, which refers to the number of users a brand can reach through a digital channel that belong to the relevant target audience as defined by demography, geography, geodemography, psychography, and behaviour (Pickton and Broderick, 2005; Funk et al., 2016). A contemporary example is streaming of movies, series, or sporting events. A study on this blog explored uses and gratifications of watching the Netflix/ESPN sports documentary «The Last Dance», a docuseries about Michael Jordan and the Chicago Bulls basketball team in the 1980s and 1990s. The study found that the relationships between uses and gratifications, brand-user imagery fit, and intentions to watch a Chicago Bulls game are strongest not among respondents who consider themselves more avid Netflix viewers, which is the streaming service that broadcasted «The Last Dance», but among the sub-sample that watches sports-related videos mostly on NBA TV, a specific basketball streaming service (Mereu, 2020b). This shows that digital platforms with the greatest reach may not be the most effective platforms when the goal is to convert viewers to buyers of a specific product. A smaller but more relevant reach will convert users more efficiently and effectively. 

Conclusion

The traditional marketing mix includes the 4 Ps known as priceproductpromotion, and place. Marketers needs to assess the role these 4 Ps play in relation to their products and services within a wider business environment (cf. Mullins et al., 2016)––an exercise that will be undertaken in a future article. In a nutshell: The price of a product or service should be defined in accordance with what a brand’s target audience is willing and able to pay with an appropriate margin on top of the floor price given by the costs of goods sold. The product (or service) is built upon the core benefits and augmented with tangible and intangible benefits, which aim at satisfying consumers’ needs and wants and distinguish the product from competitors’ products. The contemporary promotion component is now known as integrated marketing communications and seeks to achieve eight specific communication objectives through a variety of communication channels along the customer journey. Lastly, the place and distribution component of the marketing mix seeks to conveniently distribute a brand’s product or service through online and/or offline channels. The goal is to be as visible as possible and ensure the purchase of the product is as easy as possible for any consumer. 

The next article will discuss the extension of the 4 Ps of the marketing mix to 8 Ps with peoplephysical evidenceprocess management, and productivity and quality.

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