Extended Marketing Mix (pdf)
Added on 2021-07-09
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Task 2 The extended marketing mix includes the elements of the classical marketing mix or the 4Ps – product,price, place and promotion, as well as, there additional factors, such as people, processes and physicalevidence. The role of the marketing mix is to provide stimuli to customers and to differentiate thecompany from competitors (Kotler and Armstrong, 2009). The analysis first explores the meaning of eachelement of the marketing in general. Then, the specific case of Fitbit is examined in more details togetherwith the evidence from one of the closest competitors – Garmin. Garmin is a US-based companyspecialised in the production of individual fitness and health lifestyle products, similarly to Fitbit(Vannevel, 2014). The seven elements of the marketing mix include:Product – These are the products offered by Fitbit at the marketplace. In order to attractcustomers, the products must have unique characteristics which deliver value and differentiatethe company from competitors (Kotler and Armstrong, 2009). Price – Prices strongly influence customer demand and may play an important role forstimulating customers. Customers often decide whether to purchase based on the value-for-money proposition; hence, price place a central role as a marketing mix element (Kotler andArmstrong, 2009).Place – Location must be convenient and accessible, so that customers can easily purchase theproducts. In today’s marketing, location refers not only to physical stores, but also to the onlinemedium, as many products can be purchased via the Internet (Kotler and Armstrong, 2009).Promotion – Promotion refers to advertising and to the set of additional stimuli which attractcustomer attention. In most cases, these might be discounts, paired offers, endorsements, freegifts, etc. (Kotler and Armstrong, 2009).Physical evidence – Physical evidence influences the quality of the final service. Therefore,companies tend to create a pleasant and attractive environment as a way of attracting customers(Kotler and Armstrong, 2009).Processes – Processes are considered as an important element of organisational performance.Organisational productivity largely depends on the efficiency of the processes. Often, processesadd important value to the customer experience in service-based organisations (Kotler andArmstrong, 2009).1
People – In modern economy, the availability of smart and competent employees largelyexplains organisational performance. In the service sector companies, employees directlyinteract with customers; hence, employee performance also determines the quality of theprovided services. As a result, employees are also considered as a key marketing mix elementand a source of differentiation (Kotler and Armstrong, 2009).It is important to note that Fitbit is a company which offers products to its customers. Hence, it is moreimportant to focus on the elements of the traditional marketing mix – product, price, place andpromotion. As Kotler and Armstrong (2009) explain, the three additional elements of the extendedmarketing mix (process, people and physical evidence) mostly refer to service-sector organisations;hence, they are inapplicable in the case of Fitbit. Given these important clarifications, the analysis continues with an examination of the Fitbit’s marketingmix, as well as, a comparison with the evidence from Garmin, as shown on table 1 below. Table 1 – Marketing Mix (4Ps) of Fitbit and XXXFitbitGarmin Product- Focus on the segment of fitness trackers (11fitness trackers to choose from)-An extensive portfolio of available accessories - A well-diversified company which producesnavigation and GPS products, as well.- The fitness tracker is just one segment of thecompany’s product portfolio- Just several variations of the product are made Place- Products can be purchased on the Fitbit websiteand through online retailers, such as Amazon. - Products available at other physical shops, such asWalmart, Best Buy, etc.- Fitbit does not have own store. - The Garmin products can be accessed throughthe organisational website. - Products offered by numerous online retailers.- Products available at other physical shops, suchas Walmart, Best Buy, etc.- Garmin has one physical store in the USPrice- Prices are quite high varying between 59.95 and249.95 Euros. - Accessories are also expansive with similar pricesas the core products - Premium prices are supported by product qualityand stylish designs unmatched by competitors - In the majority of cases prices vary between$129.99 and $169.99. 2
Promotion- Focus on advertising (TV clips, printed mediaadvertising)- Special promotional Fitbit events - Social media presence and word-of-mouth effectreferral are prioritised -There are no discounts for Fitbit products - Social media presence- Aggressive promotional campaigns are avoideddue to the already high degree of customerloyalty Sources: Vannevel (2014); Guerrero (2015); Anna (2016)The analysis of the marketing mix clearly shows that both companies have quite different practices. Interms of product, Fitbit specialises in the production of fitness trackers only and offers a very diverseportfolio of high quality products. In contrast, Garmin is a differentiated company and most of theorganisational revenues originate from other areas of expertise – GPS and navigation systems. Hence,Garmin focuses on other areas. As a result, the fitness trackers products are just one of theorganisational segments and the product portfolio is less diverse than the one offered by Fitbit. In terms of places, both companies have identical strategies – selling products on the companies’websites, online retail platforms and through physical retailers. Garmin also has one physical store,whereas Fitbit does not own a physical store. Prices are quite different. The accessed evidence suggests that Fitbit has a high degree of specialisation.The well-designed products have very high quality and functionality. Respectively, Fitbit’s prices aregenerally higher than the ones offered by Garmin.Finally, Fitbit also conduct a very diverse portfolio of promotional initiatives which include advertising,social media presence and special events. Garmin has a very diverse focus, as the company sells GPS andnavigation systems, and the promotional activities in the field of the fitness trackers are very limited andmainly relying on word-of-mouth referral. The evidence from the marketing mix shows that Fitbit has a very distinct specialisation in the fitnesstracker segment. The company is quite focused and it has managed to maintain a diverse productportfolio, wide customer base and premium prices. Maintaining this unique market position andcompetitiveness requires from the company to be innovative and deliver the best product quality. Task 3 3
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