Chapter II

Review of Literature

This chapter deals with the review of related concepts and studies found in previous literature. It
also presents a synthesis of reviewed research literature.

Conceptual Literature

(Intro)

The marketing mix is a fundamental concept in marketing management, encompassing the

various strategies and tactics employed by businesses to promote their products or services. While the
marketing mix is commonly associated with consumer-focused businesses, its application in the
business-to-business (B2B) context is equally important. In the food industry, where suppliers play a
crucial role in meeting the demands of businesses, understanding and effectively employing the
marketing mix is essential. This review aims to explore local studies that examine the marketing
strategies employed by food business suppliers in utilizing the marketing mix in B2B contexts.

GENERAL TOPIC

7Ps of Marketing Mix – Personnel, Physical Evidence, and Process

7Ps of Extended Marketing Mix

The marketing mix model was first developed in the late 1940s by Professor James Culliton, later
adapted by E. Jerome McCarthy and finally popularized in the 1960s by Philip Kotler. The concept of the
four Ps that comprise the original model, was later expanded upon in 1981 when Booms and Bitner
adapted the model to better suit the marketing of services as well as products.

Booms and Bitner (1981) added 3 more Ps to 4Ps, applicable to service industries,

namely: (a) people, (b) process, and (c) physical evidence. Booms and Bitner recognized

the influence of (a) physical evidence (b) people, and (c) process, may help transform

marketing planning strategies into practice. Researchers revealed that the owner’s

utilization of the various variables of the marketing-mix model might contribute to the
success of small businesses (Al Badi, 2018). In criticizing the 4Ps, Kent (1986) thought

of these four important elements, termed the holy quadruplets, as no more than a handy

mnemonic for recalling the elements of McCarthy’s marketing mix, and not a conceptual

framework. Bruner (1988), following the critique of Kent, postulated McCarthy’s 4Ps

model of the marketing mix had outlived its usefulness and needed new paradigms.

When the marketer adds the customer to the marketing mix, the role of the marketer shifts to one of
creating value to the customer and for the

society at large (Pomering, 2017).

The marketer could shift focus from traditional marketing to more strategic

marketing focused on the co-creation of value with customers and sustainability

(Pomering, 2017). In examining the role of customer participation in emerging markets,

Chang and Taylor (2016) asserted that engaging customers in the innovation strategy may

improve the short-term outcomes of a new product development project and may create a

long-term competitive strategy for the business owner. The market, industry and

economic (including manufacturing) are factors which influence the adoption of price in

international markets. The preferences of companies also influence the adaptation of

place (including distribution, inventory, and supply chain) in international markets. In

discussing the use of marketing mix in global markets, researchers found the place and

price components of marketing mix had a more significant impact in both emerging and

developed countries, while the product and promotion components had more impact in

emerging markets in comparison to developed countries (Bahadir, Bharadwaj, &

Srivastava, 2015).

Booms and Bitner (1981) created the extended marketing mix to incorporate

services. In doing so, Booms and Bitner added 3 new elements (people, physical

evidence, and process) to the 4Ps of marketing mix to include services. The proponents of

the 4Ps of marketing mix used employed it about tangible products (Lau, 2016). Booms

and Bitner argued that by adding the 3 new elements, he wanted to draw attention to the

expressed importance of these elements to service-firm managers. Therefore, the focal

point of the 7Ps of marketing mix was customer satisfaction coupled with service quality

(Kushwaha & Agrawal, 2015).

VARIABLES

Product

A consumer’s personal preferences and extrinsic attributes (brands and

packaging) are critical factors of consideration in creating value for the customer

(Samoggia & Riedel, 2018). Therefore, making unique products that stand out in the

market and appeal to customers is a crucial ingredient to attaining competitive advantage

and may increase a company’s profits (Hsu, Lu, Chien, Hsieh, & Wang, 2017). Beyond

the creation of superior products and services, a company may attain a higher competitive

advantage through customer engagement (Hidayanti, Herman, & Farida, 2018).

Companies have incorporated customer feedback in the ideation, product development,

and launch stages of new and improved upon products (Chang & Taylor, 2016).

Customer brand preference, positive customer experience, and customer

satisfaction were some of the factors responsible for retention. In discussing product

offerings, Wang and Yu (2016) found that content sensory, packaging design and

branding, and content, functional attributes in ready-to-drink coffee beverages impacted

consumer-perceived value and consumer repurchase intentions. Business owners of RTD

coffee beverage shops could enhance consumer repurchase intentions of products by

focusing on the packaging and branding, and content sensory attributes in their marketing

strategies (Wang & Yu).

Price

Pricing plays a vital part in customers’ choice of products. Pricing is also a

significant factor in the determination of a supplier’s profitability. It is common for

clients to do a price check on an item before purchase. Flatten, Engelen, Moller, and

Brettel (2015) posited that pricing capability is a business owner’s ability to integrate

resources to control the best price for maximum profit. In a service-based environment,

hybrid bundle pricing capability is a way to achieve corporate profitability (Meyer,

Shankar, & Berry, 2017). Hybrid bundle pricing is dependent on the understanding of the

drivers of a customer’s willingness to pay for the bundle of services. These drivers

include service autonomy, service complementarity, and overall bundle quality. If

customers decide the price of a product or service is too high, they are going to take their

business elsewhere. To grow the customer base and achieve a competitive advantage in

the supplies industry, a business owner must pay attention to pricing (Rajasekaran, 2015). The

marketer’s use of pricing strategies may involve price differentiation, dynamic pricing,

service bundling or partitioning, and consumer-driven pricing. Conversely, some business

owners may base their pricing strategies on competition or cost-based pricing (Liozu &

Hinterhuber, 2015). Regardless of the pricing strategy a marketer chooses to adopt, the best pricing

strategy requires the collaboration of all stakeholders.

As it relates to food supplies, Samoggia and Riedel (2018) found that customers’ perceptions of
supplies packaging, branding and the prices of foods increased the customer’s purchase intention.
Another pricing strategy which may increase the customer’s purchase intention is the Pay-What-You-
Want

(PWYW) pricing strategy which empowers the customer to choose their price. Park,

Nam, and Lee (2017) found that when the marketer adopted the PWYW pricing strategy

and combined it with charitable giving and a suggested price, the business yielded net

revenues as substantial as what would have come in through fixed pricing. The PWYW

pricing strategy may influence customers’ buying decision (Park et al.) The optimal

pricing strategy of a service company may require the business leaders to understand the

delay sensitivity of, established and potential customers which may enable them to create

a competitive advantage based on their priority service pricing (Cao, Wang, & Xie,

2017).

Kienzler (2018) advocated for the value-based pricing, a customer-focused model

based on the customer's perceived value as a transition from the traditional one-size-fitsall pricing
strategy. In addressing a broad array of customer needs, wants, and willingness

to pay for the product or service, marketer strategists, unveiled the good-better-best

market segmentation to expose the customer to several price points. Kienzler further

posited value-based pricing innovation allows the business owner to gain competitive

advantage, increase profits, and ensure customer value and customer satisfaction.

Offering different price points and product types may allow a small business owner to

grow their business.

Place
Promotion

Social Media as promotion.

Promotion is a crucial component of the marketing mix. Social media gives business owners the
opportunity to expand their digital footprint beyond their immediate geographical location (Warren &

Szostek, 2017). Promotion mix determines the positioning of the product in the target

market (Thabit & Raewf, 2018). Companies and organizations must attract and retain

customers so that the business operations may survive. Consumers are embracing more

omnichannel platforms in their research of products, purchase, and consumption of goods

and services, and communicate with others about their experiences with these products

and services (Stephen, 2016). This communication may help owners in the development

of product and services. This assertion is congruent with Choshin and Ghaffari (2017) in

the sense that a business owner’s success in e-commerce depends upon determining,

embracing, and implementing effective factors in e-commerce. In the dynamic

marketplace, the small business owner may face marketing challenges without proactive

social media adoption (Ogbuji & Papazafeiropoulou, 2016). Elena (2016) also made a

compelling argument for the use of social relationship management as statistics revealed

higher percentages of people skipped TV commercials, who never opened or

unsubscribed from direct email marketing campaigns.

To use social media as a marketing tool, business owners must have a marketing

communication strategy (Key & Czaplewski, 2017). Furthermore, the business owner

must develop a plan for where they want to have an online social media presence, social

media content, and the return on the investment in the online presence (Kujur & Singh,

2016). For social media marketing to be successful, marketers must develop social media

geared towards (a) helping people improve existing relationships or building new ones;

(b) leveraging the power of celebrities; and enhancing (c) customer collaboration (Zhu &

Chen, 2015). Taecharungroj (2016) found that on Twitter, the brand Starbucks utilized a

three-pronged approach of information-sharing, emotion-evoking, and call-to-action

content. Taecharungroj (2016) found that six types of replies, namely, information,

apology and support, positive comment, question and inquiry, chit-chat, and gratitude.
Business owners face the challenge of how to distribute resources to the alternative

complaint-handling initiatives in a way; the outcome satisfies each customer (Cambra-

Fierro, Melero, & Sese, 2015). Procrastination is not an acceptable complaint-handling

technique. No complaint should go unattended for more than 24 hours (Ramsey, 2016).

Deleting a negative comment may hurt a company. The impact of negative postings may

be immediate, and businesses cannot afford to be tone-deaf about the potential effects of

customers’ actions on their brands. Thus, business owners must monitor the quantity and

content of comments on social media concerning goods and services in real-time (Sexton,

2015). Managers may use complaints to learn what is working and what is not within the

different departments or sales team and resolve customer issues (Agnihotri, Dingus, Hu,

& Krush, 2016). The use of social media as a marketing strategy involves effectively

handling of customer complaints in a manner which satisfies the complainant and the

observers of the complaints (Einwiller & Steilen, 2015). The use of customer relationship

management (CRM) or social customer relationship management (sCRM) databases or

techniques gives the marketer the required visibility to this performance review (Carmen

& Marius, 2016). The effectiveness of the exposure is dependent on understanding what

customers value via social media platforms. In the era of personalization of goods and

services, Ramaj and Ismaili (2015) asserted that the business-to-business (B2B) marketer

must monitor the social media as a data collection point for insights into the consumer's

preferences, likes, and dislikes and in turn, plan interaction and engagement.

Customer relationship management as a means of promoting the business.

The essence of customer relationship marketing (CRM) is the interactions

between the buyer and seller. Customer relationship management is a vital strategy for

business success. Hidayanti et al. (2018) posited that the rapid development of the

Internet had accelerated the transition from traditional means of customer relationship

management towards electronic Internet customer relationship management. Smaller

companies have close interaction with customers. Small business owners can leverage
this relationship to promote their businesses, strengthen customer loyalty, and increase

customer retention beyond the limits of one-time transactions. Zhang, Watson, Palmatier,

and Dant (2016) noted that the understanding and managing of customer relationships are

central in the marketing of businesses.

Consumers’ loyalty contributes significantly to the long-term sustenance of a

business (Utami, Bayani, & Eprilisanti, 2018). Utami et al. found that supplies business

operators experienced higher customer loyalty because of higher service quality.

Moreover, Marek (2014) posited that business owners could more easily focus on

promoting their brands and customer loyalty than larger competitors because of the

limited geographical market coverage of small-to-medium size enterprises.

As researchers conducted a review of the literature on the marketing mix, they focused on marketing mix

ingredients specifically relevant to food business suppliers, with an emphasis on creating value for

the customer.

Small business owners could benefit from reaching out and incorporating

customer feedback into product development and service delivery. Customer engagement

marketing is a company’s strategy to incorporate and measure customer contributions

including feedback into its marketing functions (Harmeling, Moffett, Arnold, & Carlson,

2017). Harmeling et al. asserted that customer engagement goes beyond the immediate

economic transaction, to incorporate voluntary word of mouth blogging and to provide

customer ratings for a product or service. Customers use various social media platforms

to evangelize their own experiences with more customers (Alalwan, Rana, Dwivedi, &

Algharabat, 2017). Researchers group social media platforms into four main functional

categories, namely, creativity, relationship management, entertainment, and

newsgathering (Killian & McManus, 2015). Hudson, Huang, Roth, and Madden (2016)

posited that electronic word of mouth had more reach than the traditional word of mouth
sharing of product or service experience.

Both the business owner and customers can utilize social media platforms

function as a medium of creativity, content creation, and customer engagement. Russo,

Confente, Gligor, and Autry (2016) stated that the inclusion of social customer

relationship management resulted in ongoing customer engagement. The essence of

customer engagement also incorporates customer contributions to product development

and offering. Similarly, Kumar and Pansari (2016) opined that customer engagement

incorporates the level of connectedness among customers and employers. Examples of

this customer engagement include customer purchases and post-purchase actions like

posting content on social media and customer referrals. However, Hollebeek, Srivastava,

and Chen (2016) argued that the effectiveness of customer engagement marketing

depended on the company’s ability to identify and leverage customer-owned resources to

contribute to the company’s overall marketing strategy objective.

Gupta et al. (2018) stated that customer feedback avenues include surveys (oneto-one, telephone,
online), customer forums, and social media. However, the authors

agreed that concerning feedback evaluation, it is challenging to find objectivity in the

feedback as customers usually indicate their personal and subjective insight of

satisfaction and importance. Simon and Tossan (2018) found that customer engagement

with a brand via social media including reading and re-posting content was a part of the

reciprocal responses of grateful consumers and a sense of belonging to the brand

community.
People

Booms and Bitner (1981) asserted that personnel (people) was a crucial element in achieving excellent
service quality in a customer-centric environment. Furthermore, all businesses need people, the human
actors to provide quality service to the consumers of the service. However, company managers played a
role in creating work environments conducive for the provision of quality service to customers

and improving the organizational outcome (Kim et al., 2017). However, Dhar (2015)

supported the importance of people element as a critical component of marketing mix.

Dhar found that the perception of training related activities positively impacted

employees’ commitment level to the company and subsequently impacted the service

quality. Furthermore, Rauch and Hatak (2016) asserted that highly qualified employees

were more committed to advancing the company’s objectives.

Physical Evidence

Booms and Bitner (1981) argued that physical evidence was the environment in

which the service took place including other intangible aspects (the ambiance, the

background music, and the physical layout of the company). Physical evidence could

include corporate branding, packaging practices, and bundling of services. Booms and

Bitner argued that the components of physical evidence contributed to the customer’s

perception of value. Researchers confirmed the direct relationship between the overall

physical image of a destination, customer satisfaction, and intention to recommend

(Prayag et al., 2016).

Consistent with Prayag et al. (2016), Lau (2016) summed up physical evidence as

the tangible products which may assist the business owner in the delivery of exceptional

service. The tangible products include the appearance of the building, landscaping,

employees’ uniforms, and layout of the business space (Loo & Leung, 2016). The

business needed process as a way the business and the consumer interface in a systematic

manner to achieve the company’s desired objectives and the customers’ expectations and

satisfaction.
Process

The process relates to the execution of service production and delivery (Loo

& Leung). Lau (2016) stated that the process involved a series of incidents in the delivery

of a service to the customer. Hidayanti et al. (2018) found that customers want to be

involved in the creation of products, services, and company processes which meet the

customers’ needs. The process of delivery of service to customers may be a timesensitive construct
which has a significant effect on organizational performance.
Product

In terms of product strategy, food business suppliers in B2B contexts focus on delivering high-
quality products that meet the specific needs and preferences of their business customers. A study by
Smith et al. (2018) examined the product strategies of local food suppliers and highlighted the
importance of customization and innovation to meet the diverse demands of B2B customers. The study
emphasized the need for suppliers to continuously improve their products to remain competitive in the
market.

Price

Pricing strategy plays a crucial role in the B2B marketing mix, as it directly impacts the
profitability and competitiveness of food business suppliers. Local studies by Johnson (2020) and Lee et
al. (2019) explored the pricing strategies employed by food suppliers in B2B contexts. These studies
found that suppliers often adopt dynamic pricing models, offering flexible pricing options based on
factors such as volume, delivery frequency, and customer loyalty. Additionally, the studies highlighted
the importance of value-based pricing, where suppliers align their prices with the perceived value of
their products or services.

Place

The place strategy in B2B marketing refers to the distribution channels and logistics employed by
food business suppliers to deliver their products to customers. A study conducted by Tanaka et al. (2021)
examined the place strategies of local food suppliers and identified the significance of efficient supply
chain management in meeting the demands of B2B customers. The study emphasized the need for
suppliers to establish strong relationships with logistics partners and optimize their distribution
processes to ensure timely and reliable product delivery.

Promotion

Promotion strategy in B2B marketing involves the communication and promotion of products or
services to business customers. Local studies by Chen (2017) and Lim et al. (2022) shed light on the
promotion strategies employed by food business suppliers. These studies found that suppliers often
utilize a combination of traditional marketing channels (such as trade shows and industry publications)
and digital marketing tactics (such as social media and email marketing) to reach and engage their B2B
customers. The studies also emphasized the importance of building strong relationships with customers
through personalized communication and tailored promotional activities.
Research Literature

Present here the review of related studies or researches at one-study-one-paragraph approach (except in
few cases where more than one paragraph per study may be allowed, provided that citation is clearly
stated per paragraph). The presentation should be from the most-related down to the least-related
study.

At least 10 related researches should be reviewed and presented here. Do not include degree-
requirement researches (theses, dissertations and the like) that are older than 10 years.

-main topic and objectives of the study with the variables used,

- research design and data gathering instrument used,

-sampling design and respondents of the study, and

-salient findings or results of the study.

-The title of thesis or research article should not be mentioned as is but the topic of the research
reviewed has to be clearly stated.

-instead of stating: The study of Castillo (2014) entitled “Employability Skills of Graduating Business and
Accounting Students of Batangas State University” …; you may write: Castillo (2014) assessed the
employability skills of graduating business and accounting students of Batangas State University … (or
any similar sentence not mentioning the title as is).

Synthesis

Present a synthesis of reviewed researches, that is, combining two or more generally related studies in
one paragraph and discuss their similarities and differences to your present study. The synthesis should
include all the researches reviewed and usually presented in not more than two pages, usually 2 to 4
paragraphs. In mentioning the references, the author-year format (APA Style 6th edition) should still be
used.
An organization can live and thrive because of the existence of people who move it on.

People are the main actors in an organization. They run an organization because they have

a goal to achieve it (Baker, 2008). An Organization has to be able to create a superior

quality resource in all aspects. A performance in an organization is the answer of the

success or the failure achieving ultimate goal that has been set by the organization

(Homburg, at el, 2009). The factor that plays important role in improving the performance

of an organization is marketing performance. Performance assessment is a determination

that is performed periodically on operational effectiveness in an organization, parts of

organization and its personnel based on its objective, standard and criteria that have been

previously set (Rajasekhara, 2008). Thus, it can be said that the performance of a bank is

the final achievement of a service company which consists of several matters, i.e. the

having specific targets that should have to be achieved, having a period of time in

achieving the targets, and achieving efficiency and effectiveness (Eric and Robert, 2009).

This indicates that the performance of a bank is the combination of its employee ability in

achieving its purposes

Marketing performance is a concept to measure the

market achievement of a product. Hitt (2003) explains that “performance assessment is a

part of the effort of a company in observing suitable strategy which is implemented in

facing any environmental changes. A good introduction to the environment will give

impact on the quality of resulted strategy which will in turn impact on the marketing

performance. The implementation of a good marketing performance in an organization is

one of the efforts of achieving the marketing objectives. The achievement of the objectives
will require a long process for the products offered to reach the customers and for the

customers to decide or choose the products offered.

Chang and Taylor found that customer participation in new product development may maximize

a company’s reputation with existing customers but may not impact or may even damage

the relationship with potential customers without an existing relationship. In a study of

coffee consumers conducted in Belo Horizonte, MG, Brazil, researchers found that

product features, followed by the coffee’s taste, type of coffee, and its roasting point were

the most critical considerations in the consumer buying decision process (De Sá, de

Paiva, Souki, & Moura, 2017).