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Performance, the Eighth P of Marketing-A Proposal

By
Prof Prabal Das
International Institute of Management Sciences
Email-prabaldas2010@gmail.com
Flat-2a, 145 Santoshpur Avenue
Kolkata-700075
Abstract
The basic philosophy for the elements of the marketing mix basket (7Ps) is the holistic marketing
performance getting reflected in the delivery of long-term economic, social, and environmental
value to customer, employee, supplier, community and shareholder/stakeholder of a business, in
order to enhance sustainable financial performance (R.O.I).
Not only in marketing sense, performance tags along on any activity, be it science, arts, sports or
philosophy. Performance establishes a benchmark for itself and others. Without performance there
is no place in this world, given the competitive environment. So performance is the key result area.
This paper attempts to propose that the 8th P of marketing be PERFORMANCE. In the marketing
sense Performance must be included in the marketing mix basket as the 8th P of marketing. The
rational behind it is, without a performance plan, target & implementation of any marketing activity,
given the 7 Ps, is ineffective and irrelevant. This is because, through performance benchmarks &
performance appraisal of the marketing mix elements, we know where we are located at the end of
the day. In that case setting performance standards and pegging all marketing activities to that
standard makes performance a vital organ of the marketing mix basket. In that case why cannot we
include Performance as the 8th P of marketing when it helps to plan , organize, implement, control
and monitor marketing activities.
The paper attempts to justify and validate the proposal by providing three sets of defense. The first
one is 8th Ps (ROI) behavior in the product-quality matrix, as derived by PIMS. Next one is
behavior of performance in terms of sales/revenue and profit in the product life cycle concept. In
the third defense it is observed that BCG matrix also depicts performance in terms of relative
market share & growth.
Performance is inherent as well as explicit in all marketing activities and performance system is
also a self performer. So why cannot we include PERFORMANCE as the 8th P of marketing?

1.0 INTRODUCTION

In todays fast moving competitive business world measuring marketing performance is crucial
to set future business goals, monitor progress, assess effectiveness and align objectives and tactics.
Marketing success is measured by certain performance metrics, which provide insights into better
performance management. However, depending on the situation different companies can focus on
different types of metrics. Thus efficiency metrics are aimed at describing the cost to execute
marketing projects or campaigns. Program metrics are employed to measurer effectiveness by
comparing the costs and results. Brand metrics are employed to measure attitudes related to a
product by means of surveys. The knowledge of the brand, preferences for the brand, purchase
intentions and product satisfaction enables marketer to predict future purchases. Customer value
metrics help to estimate future sales by individual customer and customer segments. Segment
results are of special importance because customers from different spheres of business,
demographic groups and other categories tend to behave differently. The principal measures here
are retention and purchase rate, which are derived from historical data. So, we find like product,
price, place, promotion, people, process, and packaging, performance of marketing activities also
plays a pivotal role in the process of marketing planning, organizing, implementing, monitoring,
and controlling marketing activities. If the product, its price, place and promotion performs as
planned then its a marketing success story. Performance is a key result area and a very important
marketing variable or element which might be incorporated as the 8th P of marketing mix.
2.0 WHY FOCUS ON PERFORMANCE MEASUREMENT?

When it comes to marketing, an entrepreneur/businessman does not just create professional and
purposeful marketing materials but also tracks down how are marketing efforts performing. The
main focus of entrepreneur or businessman is to see how much he is able to get back or what are his
returns. So, in this paper we are going to look at three key marketing performance indicators; they
are the primary tools of a business owner who should use it to determine his returns. They are
a) Percentage change in revenue period wise (the revenue growth factor).
b) Return on marketing investment (ROMI)
ROMI = Revenue generated form x-marketing activity/marketing budget for x-activity.
c) Profit = Revenue generated by x-activity less Expenses for implementing an executing
marketing activity x.

These are the basic indicators to focus on marketing performance. There are plenty others.
Performance is an inherent marketing activity and also a pillar of marketing-may be the 8th pillar.

3.0 PERFORMANCE AND PRODUCT LIFE CYCLE.

A new product progresses through a sequence of stages from introduction to growth,


maturity and decline. This sequence is known as the product life cycle and is associated with
changes in the marketing situation, thus impacting marketing strategies derived from the marketing
mix elements.
Sales/Revenue performance, profit performance can be plotted as a function of the life cycle
stages as shown in chart below:
PLC is a performance diagram of revenue and profit. Other elements of the marketing mix viz
promotion, distribution along with the above mentioned, changes as the marketing scenario changes
with different stages of product life cycle.

Here it can be argued that why one should not include performance as the 8th P of the
marketing mix? PLC clearly depicts the performance of the product revenue and profit through
different stages of its life cycle.

4.0 PRODUCT-MARKET PROFITABILITY.

Profit Impact of Marketing Studies (PIMS) research has shown that there is a clear
relationship between performance in terms of R.O.I, market share and product quality. If customers
perceive the offering as being of higher quality, they are prepared to pay more. The matrix below
displays this relationship:
Any organization can position them on this matrix chart based on the following parameters:

Performance
Durability
Conformance to specifications
Features
Brand recognition
Reliability

So, we see performance of marketing variables like R.O.I, market share and quality is the basis of
PIMS research. Performance is a key component and inherent in a business organization. So, can
we not propose performance as the 8th P of marketing mix basket?

5.0 BCG MATRIX: - A PERFORMANCE MATRIX

BCG growth share matrix (given below) maps a business units position with two important
determinants of profitability, viz relative market share and growth of the business unit depending on
the performance of their offerings in the market place.
Is not this frame work a peg mark of a business units performance? Performance plays a pivotal
role not only in the planning stage (setting bench marks and directions) but also in the evaluation
process so as to re-strategize the business unit in case it is way out of the plan.

6.0 CONCLUSION

Through out the paper attempts were made to justify and validate that performance is a key
result area and an inherent component of a marketing organization.
Many marketing models and theories as well as strategies and concepts have evolved from
the marketing performance criteria and management. Marketing performance, whatever best plan
and budget is given as input, is determined by market. It can be visualized performance is a pillar
(the 8th pillar) of marketing mix elements. To conclude can it not be proposed that Performance may
be a strong contender for the 8th P of marketing?