Acadia Marketing Mix

Acadia Marketing Mix

Introduction

The “marketing mix” is composed of four p’s: product, place, price, and promotion (“Marketing mix,” 2019).  It is a critical component of designing new products and services.  Neither products nor services “sell” themselves: the company designing the product or service is responsible for understanding and communicating to their market what the product is (product), where they can get it (place), what it costs (price), and why they should buy it (promotion).  By conducting a marketing mix analysis, we will be able to understand each of these important items and then build an effective marketing strategy around them.

Additionally, every company is different.  At Acadia, we have our own values, vision, organizational culture, etc. and our products need to not just be designed in a way that is consistent with and aligned with our business identity, but also sold and promoted in a way that is consistent and aligned with our business identity.  Having this careful integration between our products, services, and company helps promote coherence both internally and externally.  Through this marketing mix analysis, we will not just answer the questions of product, place, price, and promotion in a vacuum, but in a very specific way that is relevant to the kind of company we are and the kind of customers we serve.

Product

The first question we ask is, what problem is our repair service trying to solve?  Customers buy things in order to solve problems, so unless we can say what problem we are solving we cannot hope to sell our repair services.  Something like a repair service is apparently fairly straightforward in the problem it is trying to solve: tents, bikes, etc. can fall into disrepair and become less effective or even broken; buying a new product might be cost-prohibitive and customers want to get everything they can out of the purchase they make.  Ergo, our service bridges the gap and helps restore products to working condition without the cost associated with a new product.

Just knowing what our product does it not enough, though.  We also need to conduct market research.  Just because we have articulated the problem we are trying to solve doesn’t actually mean that problem exists on a scale sufficient enough to justify us devoting our resources toward solving it.  We have to conduct market research to determine and justify whether or not there is sufficient demand.

Marketing research should be viewed as a diagnostic tool (Duboff, 2011).  That is, it should not be used as an ad hoc approach to validate pre-determined decisions or conclusions (Schroiff, 2007).  In other words: until we actually do the research, we don’t know if we should launch the new service.  Marketing research exists to find information, and then make decisions: not to find information that merely supports decisions that were already made.

One of the best ways to conduct market research is through interviews (Cadle, Duboff, & Turner, 2010).  By interviewing members of our market segments we can gain deep and rich insights into their needs.  Marketing interviews are ways to help not just understand “what” customers need, but to understand their behavior on a deeper level to uncover what problem they are “really” solving.  For instance, Christenson, Cook, and Hall (2005) provide an anecdote about how market research interviews performed by a company looking to improve its milkshake sales discovered that its customers didn’t actually have any particular love for milkshakes per se, but they bought milkshakes because they 1) lasted for a long time and 2) made the morning commute more interesting.  Theoretically, a bagel or a cup of coffee—neither of which are anything at all like a milkshake—could have performed the same job.  The point being that for our own market research, we want to interview our market to help understand in a penetrative way how they actually use their hiking and camping products so that we can know why they would consider a repair service.  Naturally, part of this process also helps to assess whether or not there is the right kind of volume.  So, we would also ask customers how many of their friends, family, etc. who are also outdoors-enthusiasts would use the service as well.

Finally, it is crucial to understand that marketing a service is much different from marketing a product.  This is because services and products differ in some key ways, which are often referred to as the four I’s: intangibility, inconsistency, inseparability, and inventory (McPhee, 2015).  We need to keep each of these I’s in mind when marketing our service.

Intangibility means that services cannot be physically felt, held, seen, etc., but are all about an experience.  Compare that to an actual product we sell: a customer can feel what a tent weighs, hold the packing bag in the hands, bend the poles, etc. but a customer cannot physically sense anything that is inherent to us fixing a broken tent.  As an intangible service, we need to ensure that it is delivered promptly, effectively, and with an overall positive experience (which won’t be measured merely by virtue of whether or not we actually repair their broken item).

Inconsistency is an unfortunate fact of service.  We manufacture all of our tents to spec and each model is identical to the next.  But since service is inseparable from the people who offer it, and people are not machines—they have good days and bad days, varying levels of skills and experience, etc.—the level and quality of service offered may differ from one day or one person to the next.  A major goal in delivering quality service, then, is to reduce inconsistency through various training and controls.  We want all of our customers to have the same (positive) service experience.

Inseparability was hinted to when discussing inconsistency.  While a customer can buy a tent from us and bring it home and then use it for the rest of their life without ever seeing us again, a customer cannot separate a service from the company and personnel who deliver it.  There is a necessary and persistent touchpoint between customer and service provider, which again points to the great importance of a high level of customer service.

Finally, we have inventory.  When delivering services, there are inventory considerations: there is perishability (in the sense that the customer has time restraints), there are actual physical inventory (i.e. the materials needed to do repairs which are not needed to sell products), and there are also intellectual and personnel inventory (the requisite technical knowledge to repair a product).  All of these play an instrumental and contributive role in service delivery.

What the four I’s tell us is that what we are really selling is an experience.  The outcome of the experience is a repaired product, yes, but the reason people buy it because of the high level of expertise and customer service that is intangibly inseparable from it.

Place

Place has to do with the distribution of the service.  In a day and age where retail is dying (if not dead), services are harder to distribute because they typically occur within a retail setting.  This is likely to be the case for us.  Even if our service personnel could travel with their tools to meet customers on-site, they do not know (until they get there and inspect the item) what is required to fix it, and in the likely event that additional parts or materials are needed then the experience would be negative because the repairman would not be able to complete the job at the customer’s site.  Hence, we will distribute the service through our retail outlets.

One way to get around this limitation is to offer a pickup service.  Customers frequent retail storefronts less and less with online shopping having taken over, so if we were able to go and pick up and re-deliver the customer’s repair, we would likely increase the likelihood of the service being used.  It would no longer have to be something the customer needs to make time for.

Price

Price, of course, refers to the cost the customer incurs by purchasing the service.  There are a variety of different pricing structures we could consider.  I have selected two.

The first model is simple and straightforward: pay-per-service.  This kind of structure simply charges customers the cost of materials needed plus labor—not dissimilar to the way that auto-mechanics, HVAC repairs, computer repairs, etc. are calculated.  The advantage of this kind of pricing structure is that customers only pay for what they need.  The disadvantage is that customers (and even the service vendor) sometimes don’t know what that will actually be until they’ve worked on it for a while.

The second model is a subscription model.  Subscription models have taken off in the online world and are in fact becoming more commonplace in retail settings as well (Cohen, 2016).  According to a subscription model, customers would pay a monthly (or discounted annually) fee that would guarantee them a certain level or amount of service.  The subscription would be tiered—to give a basic example, the entry-level subscription would entail the customer to (say) two repairs per year, the mid-range subscription would entail the customer to six repairs per year, and then we would have a platinum subscription that would allow unlimited repairs per year.  The advantage of this model is that it appeals to many customer types: semi-regular outdoors-people will find value in the entry-level subscription, regular outdoors-people will find value in the mid-range subscription, and all-out outdoor-enthusiasts will find considerable value in the platinum subscription.  The downside of the model is that it would only appeal to people who use outdoor products with some regularity; someone who just wants to get a pair of hiking shoes they bought ten years ago repaired so they can get another ten years out of them is unlikely to find any value in that kind of pricing structure.  Importantly, though, these two structures are by no means mutually exclusive.  We can have a pay-per-service model and a subscription model simultaneously.

Promotion

We should blend digital and traditional marketing since the service provision itself (supposing we perform customer pick-up) is also a blend.  On the digital side, we should penetrate social media, especially developing a presence in social media groups that are regionally based on outdoor-enthusiasts.  On the traditional side, we can partner with local outdoor groups, races, athletics, etc. to help build exposure in the community.  Since there is a place-dependence (i.e., we can’t pick up to repair a customer who lives 800 miles away) our marketing efforts should emphasize regionality and locality.  That way customers feel like we are part of their local outdoor community, which will help promote the customer-service aspect of the service.  Rather than appearing like a large, dispassionate, faceless retail store we have the feel and flavor of a local and caring store that is just as committed to the hobbies of outdoor enthusiasts as our customers are.  Doing so will help build our brand equity and identity with key segments.