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Digital transformation of Digital

marketing
traditional marketing business business model

model in new industry era

Aylin Caliskan
Department of Transportation Services, Yasar University, Izmir, Turkey, and
€
Yeşim Deniz Ozkan €
Ozen and Yucel Ozturkoglu Received 28 February 2020
Revised 7 July 2020
International Logistics Management, Yasar University, Izmir, Turkey 12 August 2020
Accepted 18 August 2020
Abstract
Purpose – Impact of the digitalization on the production and service sector is a highly popular topic in these
days and especially, new business models receive increasingly more attention. Under the light of digitalization,
the Fourth Industrial Revolution, so-called Industry 4.0, and its impacts on all kinds of process is a promising
topic in the academia and also beneficial for the practitioners. Since there are arguments from scholars that
Industry 4.0 has an important and shaping effect on marketing, the concept of 7P’s in marketing should be
incorporated in Industry 4.0 elements. From this point of view, this study focuses on developing the
understanding of 7P’s based on contemporary perspectives of Industry 4.0.
Design/methodology/approach – In order to do that, different criteria related to integration of Industry 4.0
and marketing practices under each marketing-mix element are presented and one of the multi-criteria decision-
making (MCDM) methods, the best–worst method (BWM) is used to prioritize the criteria for future
implications.
Findings – Results indicated that product, process and physical evidence are the most affected marketing-mix
factors by considering Industry 4.0. managerial implications which were also presented based on the numerical
results.
Originality/value – An in-depth analysis of literature review related to Industry 4.0 revealed that changing
and developing technologies are examined in detail mostly around a production perspective. In order to fulfill
the gap in the knowledge, this study focuses on the examination of impacts of Industry 4.0 on the marketing-
mix strategy. To the best of the authors’ knowledge, this is the first study which merges Industry 4.0 with the
marketing mix.
Keywords Digitalization, Marketing mix, Service marketing, Business model
Paper type Research paper

1. Introduction
In order to survive in an increasingly competitive environment due to globalization, firms
have to reduce both waste and limited resource consumption and provide more efficient
production. To achieve this, it is inevitable to integrate new developing technologies with
traditional business strategies. With the Fourth Industrial Revolution, which is also known as
Industry 4.0, new strategies began to take shape. The concept of Industry 4.0 was first
introduced at the Hannover Technology Fair in Hannover, Germany, in 2011, and was soon
incorporated into the manufacturing process in the USA and Western European countries
(Zhou et al., 2015). The main difference of Industry 4.0 from the other industrial revolutions is
to connect people, machines, and objects to improve the efficiency of production while
involving the customers to all processes (Bettiol et al., 2017). Several technologies and
applications are used in Industry 4.0 from both customers’ and firms’ perspectives. The
Internet of Things (IoT), augmented reality, cloud computing and big data technologies
provide knowledge about the customer needs (Hardey, 2012; Porter and Heppelmann, 2015;
Lu, 2017; Agrawal et al., 2018; Ghaffari et al., 2020); smart factory, robotics and cyber-physical
systems allow improving firms’ production performance (Lee et al., 2015; Stock and Seliger,
2016; Yeo et al., 2017; Bienhaus and Haddud, 2018). Journal of Enterprise Information
Management
Industry 4.0 attracts a lot of attention in the academic community due to its effects on © Emerald Publishing Limited
1741-0398
production systems and processes and on supply chain structures, its contribution to DOI 10.1108/JEIM-02-2020-0084
JEIM sustainability and its effects on socioeconomic order (Xu et al., 2018). How Industry 4.0
changes the manufacturing landscape is the main question of many academic studies
(e.g. Brettel et al., 2014; Ozkan-Ozen and Ozturkoglu, 2020). In addition, the impacts of the new
technologies on small and medium-sized enterprises have attracted the interest of several
studies in the literature (Roblek et al., 2016). In general, although Industry 4.0 is thought to be
production oriented, it actually has a structure that affects all processes of the business. In
order to reduce production costs, increase flexibility and improve the quality of relations with
customers, marketing strategies have an important place for companies as much as
production. Due to the changing buyer and seller relations, companies need to adapt their
marketing strategies according to the new digital age. New technologies in Industry 4.0
should be integrated with traditional marketing strategies (Zhang et al., 2017). Because the
Fourth Industrial Revolution is at the heart of marketing’s strategic and research agenda, in
the literature, the issue of Industry 4.0 in marketing science has not been overlooked, either.
However, it is rather scarce in comparison to other topics (Xu et al., 2018). One stream of the
research focuses on real-time collection and the analysis of market data and information
sharing between parties (e.g. Ardito et al., 2019; Giannakis et al., 2019). Another stream of
research summarizes the challenges of digitalization in marketing (e.g. Vassileva, 2017;
Bettiol et al., 2017). The outstanding area regarding the combination of Industry 4.0 and
marketing topics is the change in marketing practices caused by Industry 4.0 (e.g. Jara et al.,
2012; Shkurupskaya and Litovchenko, 2016; Sunday and Vera, 2018). In the literature, only
one study has been found (Başyazıcıo glu and Karamustafa, 2018) that investigated the
impacts of Industry 4.0 on marketing-mix theory. Başyazıcıo glu and Karamustafa (2018)
discussed how 4P’s of marketing elements changed shape with technology. It has been
observed that the studies regarding this topic could not go beyond the discussion and no
empirical study was conducted in this field. Overcoming drawback in this area, this study
aims at contributing to the extant literature by introducing novel, digitalized extended
marketing-mix theory (7P’s) by presenting the main and sub-criteria for transformations of
service marketing mix in Industry 4.0. Besides, another important difference of this study is
to reveal which elements of the marketing mix come to the fore in the Fourth Industrial
Revolution by conducting empirical research with the criteria created. The reason for
choosing the 7P’s to be integrated with digitalization is to be able to deal with all services
marketing activities, in general. Because 7P’s is a collective value proposition offered to the
customer, within this value, all elements regarding a service and product can be found.
Therefore, instead of looking at the relationship between a single element of marketing and
digitalization, a more holistic perspective can be obtained with the 7P’s marketing mix.
The marketing mix, one of the most basic marketing strategies frequently used by
marketing managers, was introduced in the literature by McCarthy (1960). In the beginning,
the marketing mix consisted of product, price, promotion and place, which are called the 4P’s
of marketing. Later, Booms and Bitner (1981) added three more elements (physical
environment, process and people) for use in the service marketing and called as 7P’s. Due to
its significant role in the organization, it is essential to analyze transformation of the
marketing mix through Industry 4.0. However, an in-depth analysis of literature review
related to Industry 4.0 revealed that changing and developing technologies are examined in
detail mostly around a production perspective (Xu et al., 2018). In order to fulfill the gap in the
knowledge, this study focuses on the examination of impacts of Industry 4.0 on the
marketing-mix strategy. As a result, the research questions of the study are summarized as
follows:
RQ1. What are the main and sub-criteria for transformations of the service marketing
mix in Industry 4.0?
 RQ2. How shall we analyze and figure out the relationship among the criteria of the Digital
service marketing mix in Industry 4.0? marketing
With this view, the main aim of this study is to present the impacts of Industry 4.0 on service- business model
marketing-mix elements with a holistic framework that consists of different criteria for the
transformation of the marketing mix. In order to do that, the relationship between 7P’s and
the Industry 4.0 dimensions are investigated and different factors under each dimension of
the marketing mix are presented based on a literature review. Then, the best–worst method
(BWM), one of the multi-criteria-decision-making (MCDM) methods, is used to evaluate and
determine the significance of each identified dimension. The BWM is selected since this
method needs fewer comparison data with more reliable results.
The rest of the paper is structured as follows: detailed theoretical background of the
marketing mix is presented in the next section. Section 3 discusses the relationship between
marketing and Industry 4.0. Section 4 shows the transformation of the marketing mix based
on the Industry 4.0 perspectives. The research methodology is introduced in section 5.
Implementation and results are discussed in Section 6. The last section summarizes and
concludes the paper.

2. Theoretical background: the 7P’s marketing mix

Conceptualization of the concept of the marketing mix as a marketing model was made by
E. Jerome McCarthy in the 1960s. McCarthy (1960) stated that modern marketing strategies
should be built on the product, price, promotion and place, which are called the 4P’s of
marketing. Booms and Bitner (1981) argued that 4P’s may be valid for goods, but the same
elements would be inadequate for the services and they could not be valid at times due to
unique characteristics of services. Therefore, the study of Booms and Bitner (1981) came up
with new idea, namely, 7P’s: product, price, promotion, place, physical environment, process
and people (participants) as the mixed elements may be suitable for services marketing.
Drawing upon the work of Aaker (2008), all the elements of 7P’s are briefly explained below.
The aim of the product/service included in 7P’s is to plan and develop the marketable
goods and/or services. In addressing this dimension, the fundamental question that
businesses ask is whether they design products/services that can meet the needs of
customers. Accordingly, in order to make decisions regarding the brand, the following
elements are provided: functionality, form, quality, appearance, reliability, packaging,
maintenance and repair, support and warranty.
In the scope of price, which is the second marketing-mix element, it is aimed to make the
marketing mix attractive by determining an appropriate price for the products. The basic
question that should be asked in the price element of the marketing mix is how much
customers are willing to pay for the goods and services they are willing to purchase. Pricing
strategies, discounts, credit terms and allowances are the decisions related to the price
element.
The third element, the promotion mix, is about giving information to the target market
about products or services and encouraging them to buy. How much information the target
audience has about the products and services offered is the main question asked when
dealing with this dimension. The decisions of the marketing manager regarding the
promotion will include the following aspects: promotion strategies (push and pull),
advertising, personal sales, sales development and public relations. Frontline personnel are
the heart of promotion in a service-oriented company.
The place, which is the fourth element, plays a role in delivering the products to the target
market. Place represents the accessibility of the service. The decisions taken and applied on
this variable of the marketing mix should be able to effectively answer the question of
whether the products and/or services can be delivered to the customer in the right place and at
JEIM the right time. Enterprises should decide on issues such as distribution channels (channel
partners), logistics, market coverage, inventory management, stock control, selection of
transport modes, reduction of distribution costs, location, sales center and shelf layout.
People include the participants who are in the process of creating and consuming the
service. Employees, management, customers and prospects in the service business are
covered by this dimension of the marketing mix.
The physical environment, given the inherent characteristics of services, plays an
important role in consumers’ purchasing and re-purchasing decisions. In terms of service
providers, the physical environment is considered to be one of the concrete components that
lead to better interaction between businesses and customers, affect the quality of the
environment and service or facilitate communication.
The other marketing-mix element, process, is a component that creates solutions for the
problems arising from the nonstorage and homogeneity characteristics of services. It
includes the procedures and service flow in the service creation and consumption phase. With
the process management, the service is made available at the time that the consumer needs
and is presented under a certain standard. In other words, the availability of the service is
ensured against the simultaneous production and consumption of the service, together with
process management.

3. Transformation of the marketing mix in Industry 4.0

This section first discusses current practices related to marketing function and Industry 4.0
and second, the transformation of the marketing mix in Industry 4.0.

3.1 Marketing and Industry 4.0

As mentioned in the Introduction section, Industry 4.0 has not only impacted the production
processes but also the entire business functions. Marketing is one of the most important
functions that need to be altered according to the digital transformation to protect
competitiveness. A combination of information technology (IT) and operations management
technologies through IoT applications leads to the decrease in the way between customers
and producers, and the role of customer relationship management (CRM) systems increases
in terms of managing customer data and cooperation between stakeholders (Sterev, 2017).
The IoT, cloud computing, data analytics and cybersecurity are some of the digital
technologies that can be used to provide benefits to the marketing function. Customer data
and product–customer interaction are two important inputs that are used to define the
marketing performance. With this view, Ardito et al. (2019) stated that the IoT and cloud
computing are beneficial for the real-time collection of market data and information sharing
between stakeholders. Moreover, in order to deal with the high amount of customer data, data
analytics can be used for the customer profiling and also, cybersecurity is a significant issue
in terms of securing customer data (Cluley et al., 2019; Ardito et al., 2019; Giannakis et al.,
2019). Vassileva (2017) presented critical success factors for marketing practices for
organizations that are at the early stage of digital transformations: (1) the focus of digital
transformation, (2) investment in digital capabilities, (3) technical capabilities and (4) the
scope of transformation.
Shkurupskaya and Litovchenko (2016) summarized the changes in marketing practices
caused by Industry 4.0: (1) increase in the spread of information and communication
technology (ICT) in the marketing communication channels, (2) increase in the use of the
virtual complex structure of marketing communication practices, (3) ability of real-time
communication with customers with IoT applications (Sunday and Vera, 2018), (4) altering
cooperation between producers and consumers by decreasing arbitrator links, (5) increase in
the effectiveness of marketing activities by monitoring real-time data and (6) equalizing the Digital
market area by easily accessible social communication channels. Similarly, Jara et al. (2012) marketing
suggested that the IoT enabled a more participative and trustworthy relation with products
in marketing practices. Furthermore, marketing innovations through digitalization caused
business model
by Industry 4.0 brought some operational benefits such as increased labor productivity
caused by introducing new technologies, improvements in distribution channels through
autonomous robotization, increased quality by three-dimensional printing (3DP) and
advancing long-term business plans, thanks to managing big data (Ungerman et al., 2018).
Dewi and Darma (2019) especially focused on the role of marketing and competitive
intelligence in the Industry 4.0 and provided an overview for companies that wanted to enter
the global markets in Industry 4.0.
As one of and important aspects of Industry 4.0, in terms of customer expectations and
production principles, enlarged customization leads changes in business-to-business (B2B)
and business-to-consumer (B2C) applications as well. Deeper relation between customers and
producers is an essential feature of customization; therefore, digital technologies of Industry
4.0 play an important role in the altering structure of buyer–seller relations (Bettiol
et al., 2017).
In Table 1, studies related to Industry 4.0 and marketing are summarized.
In the next section, the integration of the marketing mix with Industry 4.0 will be
examined in detail.

3.2 Transformation of the marketing mix in Industry 4.0

Due to its significant role in the organization, it is essential to analyze the transformation of
the marketing mix through Industry 4.0. Technological developments lead to a significant
change in the understanding of marketing practices. Therefore, the ability to adopt digital
technologies and integrate them into regular marketing practices becomes an important
feature for organizations. Therefore, reshaping the marketing mix according to the needs of
digital transformation and defining strategies by considering new technologies are essential

Author(s) Aim of the study

Jara et al. (2012)
Shkurupskaya and
Litovchenko (2016)
Bettiol et al. (2017)
Sterev (2017)
Vassileva (2017)
Başyazıcıo
glu and
Karamustafa (2018)
Ungerman et al. (2018)
Ardito et al. (2019)
Dewi and Darma (2019)
Ungerman and Dedkova (2019)
Presenting key elements of the new marketing practices and their
relationship with the IoT
Presenting relationship of the virtual and real economic space with
marketing activities
Exploring the adoption of Industry 4.0 in manufacturing firms with a special
focus on marketing
Revealing the need for new marketing organizations in Industry 4.0
Summarizing main challenges of digitalization to identify the opportunities
for marketing and proposing a conceptual model of an agile marketing
organization in the digital era
Revealing the changes in marketing activities based on technological
developments and to explain the distinctive features of each marketing
stages
Presenting research areas of marketing in the context of Industry 4.0
Presenting the relationship between digital technologies and marketing
processes
Examining the role of marketing in Industry 4.0 and proposing a corporate Table 1.
strategy for global competitive advantage Studies related to
Discovering the relationship between marketing innovations, their effects marketing and
and Industry 4.0 Industry 4.0
JEIM for the competitive advantage (Başyazıcıo glu and Karamustafa, 2018). The integration of the
marketing mix with the Industry 4.0 approach is given below:
Product: When digitalization is combined with the product element of marketing, the first
thing that comes to mind is the artificial and augmented reality functions that increase
customer participation in the new product design stage (Mourtzis and Doukas, 2012).
Personalization in products can be achieved through modifications (e.g. color, material,
texture selection, etc.) by using 3D configurator. In addition, after modifications, visualization
is performed in real time with the augmented reality (AR) tool.
It is also worth mentioning the role of the 3DP in the new product development phase. 3DP
is used for additive manufacturing processes (rather than removing materials) with the help
of digital design file (Holmstr€om and Partanen, 2014). 3DP offers vital opportunities for
innovative products.
Packaging and package design allow differentiation in products, raise competitive
advantage and increases the product’s preference. One of the innovations of the new digital
age is smart packaging systems. Smart packaging observes, checks and keeps a continuous
record of changes in a product or its environment and reacts upon these changes
(Vanderroost et al., 2014). It uses a variety of sensors (e.g. chemical or biosensors) to detect and
monitor the quality and safety of the product throughout the entire supply chain (Kuswandi
et al., 2011) and improves customer engagement. Smart packaging needs to be addressed not
only in consumer products but also in terms of the efficiency of logistics services and the
entire supply chain. As one of the world’s largest container transportation companies, Maersk
launched “Remote Container Management” in 2018 for its cold chain customers. Within the
scope of this application, customers can monitor and control the location, temperature and
humidity of 250,000 refrigerated containers in real time and in a complete manner. In this
context, visibility, traceability and reliability of the entire supply chain in both sea and land is
increased and customers’ satisfaction is ensured with regard to the service they get.
Standardization of the quality of service provided to customers is another important concept
that is supported by Industry 4.0. As one of the design principles of Industry 4.0,
interoperability allows organizations to standardize their services for continuous customer
satisfaction (Başyazıcıo glu and Karamustafa, 2018).
Place: If we look at the marketing-mix transformation with regard to Industry 4.0 in terms
of the place element, we can say that the purpose of place, in other words distribution
channels, has changed completely. The aim of delivering the service/product to the customers
at the right place and at the right time has been replaced by the aim of giving customers the
opportunity to access the service/product anywhere and 24/7 (Verhoef et al., 2015). For
example, stores have been started to be used as pick-up locations for online orders. IT not only
enables online shopping opportunity but also choosing the delivery method the customer
needs. So, customers can receive the products they buy online at any time and from anywhere.
In this point, it is inevitable to mention about omnichannel, which is the modified shell of
multichannel. Omnichannel, which has emerged and evolved with the Industry 4.0 blessings,
offers customers to receive whatever they want at preferred time and place (Murfield et al.,
2017). A seamless omnichannel logistics through data analytics, the IoT and automation can
be achieved. For instance, IoT-enabled doors and locks and smart mobile applications enable
couriers to deliver the cargo into customers’ car trunks (e.g. Cardrops) (DHL, 2015). Another
example of cargo collection and drop-off on a 24/7 basis is the parcel lockers (e.g. DHL
Packstation), which automate and simplify the delivery process.
Success of flexible accessibility and seamless logistics operations depends on effective
inventory management and visibility across channels through IT (Michael and McCathie,
2005). With the help of IT and intelligent sensors, business can access accurate and detailed
information regarding the inventory situations of products throughout the supply chain. At
the end, their ability to deliver the product at the desired place and time is improved.
 Promotion: In terms of the promotion mix, we can observe through current examples that Digital
Industry 4.0 elements such as virtualization and search engine optimization tools lead to a marketing
change in shape of traditional promotion applications such as personal sales, direct
marketing and advertising (Shkurupska and Litovchenko, 2016).
business model
With the Fourth Industrial Revolution, the shape-shifting promotional activities focus on
interactive communication with customers rather than sending one-way messages to the
mass population through traditional media (Jara et al., 2012). At this point, it is especially
important to examine customers’ behavior and to guide promotional activities accordingly. In
this sense, social media and semantic web offer businesses, important opportunities to
manage personalized behavioral advertising campaigns (Li and Du, 2012). Companies have
started to use social media optimization (SMO), which is a part of search engine optimization,
to generate awareness, promote interest and offer personalized services. For instance, to offer
great customer service and recover negative experiences, Tesco uses SMO successfully by
monitoring and managing customers’ sentiments (Smart Insights, 2017). During the
promotion process, it is also appropriate to talk about smart packages that provide
communication with the customer at the store level, which are silent but much more effective
than sales staff (Young, 2004). As in line with this, Industry 4.0 alters the communication with
consumers from one-way to interactive communication, which is personalized for each
customer and develops promotion activities (Başyazıcıo glu and Karamustafa, 2018).
Price: With the digitalization, the pricing policies of the companies have also transformed.
Now, instead of fixed pricing, a dynamic pricing policy is applied, in which price changes
every day, every hour and for every customer according to the data collected and analyzed
(OECD, 2018). Especially in the service sector (e.g. airlines, hotels and banks), personalized
dynamic pricing brings loyal customers to businesses because with empirical studies, it has
been proven that switching behavior of customers mostly depends on the price of the product
and service (Abrate et al., 2012). While supply, demand and location variables are taken into
consideration in fixed pricing, dynamic pricing focuses on product and more importantly on
the customer with the help of advanced analytics to generate optimal revenue and to build a
successful relationship with the customer. Advanced analytics tools such as artificial
intelligence and machine learning are utilized in real-time, tailor-made and personalized
quotes (Bodea and Ferguson, 2014). Moreover, transparency in price sharing through Internet
technologies is another aspect of marketing activity in terms of pricing, where stakeholders
have increased knowledge about the market.
Process: Tools (e.g. IoT and radio-frequency identification [RFID] technology) that enable
optimization and automation of business processes come to the fore in the process element of
the marketing mix. For example, Burberry benefits from the RFID and state-of-the-art digital
technologies by enabling customers to view the content of products they are interested in by
digital mirrors with RFID tags, which improve their shopping experience (The Guardian,
2013). Customer experience is highly related to the process of product or service delivery
(Aaker, 2008). AR and virtualization have a key role in enhancing customer experience. For
instance, Tesco is working on a project related to AR and virtualization to ease and support
customers’ online shopping experience (DHL, 2015). L’Oreal uses AR applications to let
customers wear modeling makeup items and see digitally how they would look by wearing
them (Smart Insights, 2019). Furthermore, highly automated processes due to Industry 4.0,
especially continuation-passing style (CPS) transformation improves the quality of products
and services, where the aim of “zero defect” can be achieved and customer satisfaction may
increase (Eleftheriadis and Myklebust, 2016).
One of the best examples of digitalization of the process in the service sector is the Port of
Rotterdam. In the port, data such as tide, current, temperature, wind speed and direction,
water level and dock status are collected and managed by smart sensors placed on the sea
and land (Port of Rotterdam, 2018). Thus, safer, more secure and more efficient traffic
JEIM management is realized in the port. These data, collected by intelligent sensors, are
analyzed by cloud-based IoT technologies in collaboration with International Business
Machines (IBM) Corporation. With the help of these analyzes, a useful decision-making
process is realized which reduces the waiting times of the ships, determines the optimal
time for berthing, unloading and loading operations and enables more ships to benefit from
the existing berth capacity. For example, according to the water level, a ship can load or
unload the maximum load in the shortest possible time. With this application, all actors
involved in port operations can monitor the entire operation process simultaneously,
making the process more efficient.
Physical evidence: Physical evidence is the area in which the consumer consumes the
service. It includes dimensions such as spatial layout, functionality, ambiance and
corporate branding things like signs, symbols and artifacts (Zeithaml, 2000). As an
example, we can mention the digital showroom (Audi City) of Audi that opened in 2012. In
Audi City, the customers can find, see and assess all the product combinations he/she
desires with the entire product range, which cannot be seen in a traditional gallery. In this
experience, where only, multitouch tablets and video walls are sufficient, customers are
provided with a more simple, useful and effective physical environment compared to
traditional galleries. Another example is the Hointer brand in the USA. The stores of this
brand are used only as showrooms and a single product of every kind is displayed. Other
inventories are stored in automated micro-warehouses adjacent to the fitting rooms. When
the customer wants to try a product, he sends his request from the phone application and
the product is in the fitting room within 30s.
People: An American home improvement company, Lowe, has large stores and large
inventories, where it is difficult to find the desired product and make the right decision
between product options. The company has developed robots that meet customers at the
door, receive product requests, accompany customers to the location of the products and
provide information about the products. These robots provide real-time inventory
information via the video interface and speak multiple languages. In this way, the retailer
keeps the customer experience level high, provides personal assistance and benefits from the
advantage of the minimum cost of sales personnel. In addition to robots instead of
salesperson, the AR tool is also used in B2B relationships, which presents a virtual 360-degree
look at product lines and details, which at the end provides greater information to decide
(Smart Insights, 2019). It will be appropriate to mention the “virtual assistants” while
addressing the people element of the marketing mix with digitalization. A virtual assistant is
a self-employed person who provides technical, administrative and creative real-time expert
advices to customers in several service industries like tourism. For example, a personal
virtual travel assistant listens to customers’ demands and offers transportation and hotel
recommendations accordingly.
Based on the literature review and current practices, different criteria under each
marketing-mix element are proposed by authors. In order to verify these criteria, a Delphi
study was conducted by the participation of experts, who also attended to the implementation
of the study that is explained in the following sections. Table 2 shows all criteria grouped
under the marketing mix.
In Figure 1, the hierarchy of the criteria to present transformation of the marketing mix in
Industry 4.0 is presented.
So, in order to understand the structure and propose managerial implications for the
digital transformation of traditional marketing, it is essential to analyze the relationship
between criteria. The BWM is used to evaluate and determine the significance of each
identified criteria. This method is one of the MCDM methods, which ranks all criteria and
determines weights of each criterion. In the following section, the research methodology for
the study is presented.
7P’s Criteria Authors
Digital
marketing
Product Digital experience by virtual reality Khor et al. (2016), Litvinova et al. (2018) business model
Standardization through interoperability Fortino et al. (2018), Borgogno and
Colangelo (2019)
Customer integration in the design phase by 3D Freitag et al. (2018), Mourtzis (2018)
technologies
Continuous monitoring with smart packages Taoukis and Tsironi (2016), Vanderroost
during the life cycle et al. (2017)
Place Real-time communication between stakeholders Seele (2016), Parsons (2019)
for transparency
Labeling technologies for inventory Tanner et al. (2019)
management
Product and service accessibility Gould et al. (2019)
Seamless omnichannel logistics through data Fortino et al. (2018)
analytics, Internet of Things (IoT) and
automation
Inventory visibility across channels through IT Saghiri et al. (2017)
Promotion Personalized advertising Bang and Wojdynski (2016), Wirtz et al.
(2017)
Effective communication Walther and Valkenburg (2017)
Interactive communication Walther and Valkenburg (2017)
Price Tailor-made and personalized pricing Ban and Keskin (2020)
Real-time pricing Faria and Vale (2011), Caliskan and
Ozturkoglu (2015)
Transparency pricing Hanna et al. (2019)
Process Automated processes for zero defect Wang et al. (2013), Psarommatis et al.
(2020)
Real-time monitoring systems for continuous Vera-Baquero et al. (2016), Otto et al.
improvement (2017)
Enhanced customer experience with digital tools Satish and Yusof (2017), Shrivastava
(2017)
Physical Flexible physical area designs by augmented B€uttner et al. (2017), Guo et al. (2019)
evidence reality
Reduced complexity by mobile technologies Materia et al. (2016), Monk and Heim
(2017)
Attractive spaces by mobile technologies Khaddage et al. (2016), Kalogiannakis
and Papadakis (2017), Bangui et al. (2017)
People High-level customer experience with robots’ Neves et al. (2017), Dur~aes et al. (2018),
personal assistance Ukpabi et al. (2018) Table 2.
Real-time expert advices by virtual assistants Gausemeier et al. (2003), Parise et al. Industry 4.0 criteria
(2016), Luce (2019) with the marketing-
Robots instead of salesperson Park et al. (2011), Iwasaki et al. (2018) mix approach

4. The research methodology: the best–worst method

The BWM, which is one of the MCDM methods, was developed by Rezaei (2015) with the aim
of determining the weights of the criteria by using an optimization model. So, this method is
used to evaluate a set of alternates with respect to a set of decision criteria.
The BWM has some different features when compared to other MCDM methods. First, the
method needs less comparison data and leads to more reliable solutions (Rezaei, 2016). In
addition, experts identify the best and the worst criteria; thus, the most affected dimension
can be easily identified. Also, this method provides a reduction of pairwise comparisons.
Therefore, the BMW significantly increases the overall consistency of the problem compared
to other MCDM methods. Most importantly, consistency is increased in practice due to an
intuitive connection to the perceptions of decision makers. This method is easy to understand
JEIM Digital experiences by VR applications (C11)

Standardization through interoperability (C12)

Product (C1)
Customer integration in (product) design phase by 3D
technologies (C13)
Continuous monitoring with smart packages during the
life cycle (C14)
Real time communication between stakeholders for
transparency (C21)

Labelling technologies for inventory management (C22)

Place (C2) Product and service accessibility (C23)

Seamless omni-channel logistics through data analytics,

Internet of Things (IoT), and automation (C24)

Inventory visibility across channels through IT (C25)

Personalized advertising (C31)

Promotion (C3) Effective communication (C32)

Marketing Mix 4.0

Interactive communication (C33)

Tailor-made and personalized pricing (C41)

Price (C4) Real-time pricing (C42)

Transparency pricing (C43)

Automated processes for zero defect (C51)

Real time monitoring systems for continuous

Process (C5) improvement (C52)

Enhanced customer experience with digital tools (C53)

Flexible physical area designs by Augmented Reality

(C61)
Physical Evidence Reduced complexity by mobile technologies (C62)
(C6)

Attractive spaces by mobile technologies (C63)

High-level customer experience with robots’ personal

assistance (C71)
Figure 1.
Transformation of the People (C7) Real-time expert advices by virtual assistants (C72)
marketing mix in
Industry 4.0 Robots instead of salesperson (C73)
and easy to apply. Also, the method is one of the most prominent and effective MCDM Digital
methods that can be used in order to evaluate the key success factors in technological marketing
innovation (Ghaffari et al., 2017). In the BWM, the best and worst criteria are selected first and
then, the best criterion is compared to other criteria and other criteria are compared to the
business model
worst criterion.
The definition of model’s decision variables and parameters for the formulation are as
follows:
wB : weight of the best criteria
wW : weight of the worst criteria
wj : weights of criteria
aBj : vector of best criterion with other criteria j
ajW : vector of worst criterion with other criteria j
εj : indicator of consistency of comparisons
Steps of the BWM:
S1: A set of decision criteria is identified.
S2: The decision maker selects the best and worst criteria among the available set of
criteria, which is determined in step 1. No comparison is made in this step.
S3: The decision maker carries out pairwise comparisons between the best criterion and
other criteria. The matrix must be created based on nine-level scales, where an integer
scale ranks from 1 to 9 (equally important to extremely more important, respectively). The
resulting best-to-others (BO) vector would be,
AB ¼ ðaB1 ; aB2 ; aB3 ; . . . . . . :; aBn Þ

S4: The decision maker carries out pairwise comparisons between all the criteria over the
worst criterion. The matrix must be created based on nine-level scales, where an integer
scale ranks from 1 to 9 (equally important to extremely more important, respectively). The
resulting others-to-worst (OW) vector would be,
AW ¼ ða1W ; a2W ; a3W ; . . . . . . :; anW Þ

S5: Find the optimal weights of the criteria.

* 
w1 ; w*2 ; w*3 ; . . . ::; w*n

Using the abovementioned parameters and decision variables, this problem is transferred to
the following mathematical linear model:
minmax εj (1)

Subject to
jwB  aBj wj j ≤ ε (2)
jwj  ajw ww j ≤ ε (3)
X
WJ ¼ 1 (4)
j
JEIM wj ≥ 0; for all j (5)

Equation (1) means that this problem is to minimize the maximum absolute differences. In
constraints (2) and (3), the indicators of consistency of the pairwise comparisons with best and
worst criteria, respectively, are determined. Equation (4) shows that the summation weights
of the criteria are equal to 1. The last constraint (5) indicates that the decision variables are
binary and all other variables are nonnegative.

5. Implementation
This section describes the application of the BWM to the comprehensive variables listed in
Figure 1. The variables have been identified based on the discussions on the relationship
between marketing and Industry 4.0 in the previous sections. A survey was developed in
order to determine the weights of each variable. The first part of the survey had four
demographic questions and the second part included expressions related to 24 subfactors to
measure how much managers give importance to these dimensions in their marketing
strategies based on the Industry 4.0 perspective. The variables in this part were evaluated
using a nine-point Likert-type scale ranging from “equally important” (1) to “extremely more
important” (9).
In recent years, different incentives have been given by the Government for the
digitalization of companies in Turkey. Therefore, Turkish companies are very keen on
digitalization. Thus, the survey was carried out in Turkey. The managers to be surveyed
were determined by the judgmental sampling method. The purpose of this sampling is to
identify companies, which include both marketing management strategies and digital
transactions in their processes. Thus, respondents (see Table 3) who are working in global
companies that have started to apply Industry 4.0 technologies helped us via electronic mail
(e-mail) in determining the weights of 24 dimensions. Data collection consisted of two parts.
First of all, the aim of the study was explained in detail by contacting each of the selected
experts face to face or by phone. Later, the survey was sent to the experts by e-mail and
10 days were given for their feedback submission. When the questionnaires with feedback
from all selected experts were examined, it was seen that all of them were answered
completely.
In this study, while creating an expert group, people who had sectoral knowledge of the
subject and who could contribute to the study with their experience were chosen. The expert
group comprised people working in the automotive, textile, electrical and medical equipment
and food and beverage sectors. The experts had at least eight years of work experience in
these industries.

Expert Work experience Sector Expertise

1 11 years Automotive Marketing

2 15 years Textile Production planning
3 8 years Textile Production planning
4 10 years Electrical equipment Information technology
5 20 years Automotive Marketing
6 12 years Electrical equipment Information technology
7 8 years Textile Marketing
8 12 years Medical equipment Information technology
Table 3. 9 >25 years Electrical equipment Production planning
Lists of experts 10 16 years Food and beverage Information technology
 The research methodology was explained in detail in the previous section. The proposed Digital
mathematical model is coded using A Mathematical Programming Language (AMPL) and marketing
solved by CPLEX 9.1 on a computer with a Pentium 4 2.8-GHz processor and 1 GB of RAM.
The answers from experts were put into the mathematical model and the model was run. By
business model
solving the BWM model, the weights of different criteria and sub-criteria were determined.
Table 4 shows the weights of the main and subfactors. According to BWM results, the
product has been selected as the most important main factor among the 7P’s. Process and
people are the second and third factors, closely followed by physical evidence, place, price
factors and finally, promotion. After the weights of the main factors were calculated, the local
weights for the subfactors were determined.

Factors Local Rank Local Rank

(7 PL’s) weights (7 PL’s) Subfactors weights subfactors

Product 0.311 1 (1) Digital experience by virtual reality 0.411 1

(VR) applications
(2) Standardization through 0.147 4
interoperability
(3) Customer integration in the design 0.176 3
phase by 3D technology
(4) Continuous monitoring with smart 0.264 2
packages during the life cycle
Place 0.092 5 (1) Real-time communication between 0.058 4
stakeholders for transparency
(2) Labeling technology for inventory 0.088 3
management
(3) Product and service accessibility 0.041 5
(4) Seamless omnichannel logistics 0.264 1
through data analytics, the IoT and
automation
(5) Inventory visibility across channels 0.147 2
through IT
Promotion 0.057 7 (1) Personalized advertising 0.810 1
(2) Effective communication 0.106 2
(3) Interactive communication 0.083 3
Price 0.090 6 (1) Tailor-made and personalized 0.791 1
pricing
(2) Transparency pricing 0.098 3
(3) Real-time pricing 0.111 2
Process 0.225 2 (1) Automated processes for zero defect 0.676 1
(2) Real-time monitoring systems for 0.246 2
continuous improvement
(3) Enhances customer experience with 0.076 3
digital tools
People 0.114 3 (1) High-level customer experience with 0.147 3
robots’ personal assistance
(2) Real-time expert advices by virtual 0.241 2
assistants
(3) Robots instead of salesperson 0.662 1
Physical 0.112 4 (1) Flexible physical area designs by 0.163 2
evidence AR
(2) Reduced complexity by mobile 0.693 1
technology Table 4.
(3) Attractive spaces by mobile 0.142 3 Weights of main and
technology subfactors
JEIM Table 5 shows the mean and consistency values of the main criteria based on responses
received from the respondents in the survey. According to the mean values, experts have
chosen “product” as the most important main criterion like local weight. Again, “promotion”
was selected as the lowest important marketing factor related to Industry 4.0 perspective.
The value of ε represents the consistency of the comparison. There is a high level of
consistency for ε values close to 0 (Rezaei et al., 2018). Almost all values are very close 0,
which means that there is a high consistency of the comparisons and high reliability of the
results.

Product Place Promotion Price Process Physical evidence People

Table 5.
Weights of main Mean 0.352 0.258 0.096 0.134 0.350 0.292 0.346
factors ε 0.117 0.088 0.143 0.098 0.061 0.122 0.061

Factors Rank Rank Global Global

7 P’s 7 P’s Subfactors Subfactors weights rank

Product 1 (1) Digital experience by VR applications 1 0.128 2

(2) Standardization through interoperability 4 0.046 9
(3) Customer integration in the design phase 3 0.055 7
by 3D technology
(4) Continuous monitoring with smart 2 0.082 3
packages during the life cycle
Place 5 (1) Real-time communication between 4 0.005 22
stakeholders for transparency
(2) Labeling technology for inventory 3 0.008 20
management
(3) Product and service accessibility 5 0.003 24
(4) Seamless omnichannel logistics through 1 0.024 12
data analytics, the IoT and automation
(5) Inventory visibility across channels 2 0.014 17
through IT
Promotion 7 (1) Personalized advertising 1 0.046 10
(2) Effective communication 2 0.006 21
(3) Interactive communication 3 0.005 23
Price 6 (1) Tailor-made and personalized pricing 1 0.071 6
(2) Transparency pricing 3 0.009 19
(3) Real-time pricing 2 0.010 18
Process 2 (1) Automated processes for zero defect 1 0.152 1
(2) Real-time monitoring systems for 2 0.055 8
continuous improvement
(3) Enhances customer experience with 3 0.017 14
digital tools
People 4 (1) High-level customer experience with 3 0.016 15
robots’ personal assistance 2 0.028 11
(2) Real-time expert advices by virtual 1 0.074 5
assistants
(3) Robots instead of salesperson
Physical 3 (1) Flexible physical area designs by AR 2 0.018 13
Table 6. evidence (2) Reduced complexity by mobile 1 0.079 4
General results of the technology
best–worst method (3) Attractive spaces by mobile technology 3 0.016 16
6. Results Digital
Together with technology and information management systems, the marketing efforts of marketing
companies have started to produce more customer-oriented and value-added results. We
see that marketing management and its applications have been rapidly digitalized in recent
business model
years triggered by the good customer feedbacks and efficient processes provided by the
company. According to the analysis method adopted in this study, the main question
directed to sector representatives is which factor among 7P’s is the most important in terms
of the adoption and implementation of Industry 4.0 within the marketing management and
which factor is least important in this process. The results of the analysis indicate that the
most important factor of Marketing 4.0 is product and/or service and the least important
element is promotion (see Table 6).
As a result of the analysis, linking marketing, which focuses on customer value and
Industry 4.0, which deals with the manufacturing process value and reinforcing both will
contribute to the companies to achieve competitive advantage. The actual state of the art of
the interaction of the marketing mix and digitization as well as outlining a future framework
are based on challenges and requirements.

7. Discussion
When people spend money on something, they evaluate the content of the product or service
and finally, their satisfaction levels, that is, whether they meet their expectations or not. In
this case, we understand that the best presentation of other factors of the marketing mix
cannot cover up the frustration of the final product. Other factors are those that increase and
support or reduce and damage final pleasure customers. Therefore, it is not surprising that
the marketing-mix factor that comes to the forefront in Marketing 4.0 is the product and
service. Recently, consumers now prefer personalized products instead of standard products.
The opportunities offered by Industry 4.0 provide companies, convenience and advantages in
providing personalized and customized products and services to their customers. Especially
with the widespread use of 3DP, the production stages of the products will begin to
differentiate. With the fourth industrial transformation, packaging has also started to change
shape in terms of marketing communication, commercial transactions, environmental effects
and logistics processes. Currently, the most well-known transformation of packaging is smart
packaging solutions. Smart packaging with sensor technology is being applied in diverse
settings for product (e.g. foods and pharmaceuticals) dimension of marketing, from attracting
consumers to managing logistics operations. In addition to these, the experiences of
customers have been transferred in a VR environment rather than the traditional stores.
Among marketing strategies, promotion is the least affected factor from Industry 4.0.
Personalized advertisements can be made with the interpretation of big data. Again,
personalized in-store instant promotions and communication channels will be used
differently.
The second important factor affected by Industry 4.0 is the process in the marketing-mix
strategy. With the effect of digitization, significant reductions in the workforce have
occurred. The continuation of the processes with high automation has been affecting the
overall structure of the processes. Real-time monitoring systems allow continuous
improvement and immediate intervention. In the dark rooms where robots are used in
production, all processes have been positively affected by zero defects and high efficiency due
to all other technological tools (sensors, RFID, the IoT, etc.) used.
Physical evidence is the ranked third place based on the analysis. When we combine the
physical environment with digitalization, the topics we deal with are highly adaptive and
flexible physical area designs, websites, newsletters and landing pages with the support of
technologies such as AR. The company benefits from mobile technologies, sensors, e-tags and
JEIM automation to offer a flawless and simple experience to customers in its stores. By looking at
all these examples, we can conclude that with the Fourth Industrial Revolution, new
applications have emerged in the physical evidence element of marketing that increases
space attractiveness and reduces complexity and ease of use.
Interestingly, the results indicate that people were less affected by digitization.
However, with Industry 4.0, robots will come to the forefront rather than the traditional
workforce. In addition to robots instead of salesperson, the AR tool is also used in B2B
relationships, which presents a virtual 360-degree look at product lines and details,
which at the end provides greater information to make a decision (Smart Insights, 2019).
Instead of the salesperson, real-time expert advice is addressed with the help of virtual
assistants.
With the increase in Internet shopping, the place will start to become product pick-up
centers for online shopping instead of selling products. At the same time, the classic store
concept should be changed from the Industry 4.0 perspective. Continuous omnichannel
logistics services through data analytics, the IoT and automation will begin. With intelligent
technological labels, stock control of products will be much easier.
Pricing policy is also affected by the development of technology. Instead of fixed prices,
prices vary according to the technology used. Due to transparency and digitalization,
personal pricing will be provided.

8. Theoretical implications
With respect to the theoretical contributions, the present study enriches the literature in
twofold: first, this study contributed to the literature by conceptualizing Marketing 4.0. This
delivers a holistic framework for assessing digitalized marketing efforts rather than
discussing only the managerial benefits. This holistic framework depends on service-
marketing-mix theory and has been enriched by integrating the 24 Industry 4.0 criteria.
Second, this study, which has a quantitative research feature by using the BWM, also
contributes to the general qualitative tendency of the studies conducted in this field (Xu
et al., 2018).

9. Managerial implications
This research has vital managerial implications due to the nature of its subject because
extended marketing-mix theory has already been used by companies to evaluate their
businesses, to set objectives, to conduct strengths, weaknesses, opportunities and threats
(SWOT) analyses and to analyze their competitive positions. In order to keep up with the
digitalization trend of our age, in this study, the traditional marketing-mix model has been
associated with Industry 4.0 applications and it is empirically tested which marketing-mix
elements which have come to the fore. Especially during the coronavirus disease 2019
(COVID-19) process, all commercial enterprises have seen how important digitalization is in
all aspects of the marketing mix. Therefore, with the findings of this study, managers are
provided with the ease of reorganizing their existing business processes (e.g. production,
distribution, sales, packaging, labor, price, promotion, etc.) in the direction of digitalization.
Another important managerial contribution of this study is to present which digital
applications can be used in marketing components. In addition, the most important factor
that ensures continuity and competition in the market is the feedback from customers.
Customers immediately report their satisfaction, either positively or negatively, in the
digitalizing world. In short, as the marketing mix is integrated with digitalization, companies
reach customers digitally and customers also now reach companies digitally. In short, the
cyclic event for the interaction with customers has evolved with digitalization in the
marketing mix.
10. Conclusion Digital
Digital transformation deeply influences business processes and companies have to use some marketing
digital technologies ( AR, artificial intelligent, the IoT, cloud computing, data analytics, cyber
security, etc.) in order to avoid staying behind from their competitors in their marketing
business model
strategies. Although there are lots of studies on the marketing mix, to the best of our
knowledge, this is the first study that focused holistically at the service marketing mix by
considering the Industry 4.0 perspective. Therefore, the aim of this study is to propose a
holistic framework that shows the impact of Industry 4.0 on the marketing mix with and
proposing different criteria for the transformation of the marketing mix in order to create
business value for the future implementations. In order to do that, the relationship between
7P’s and the Industry 4.0 dimensions is investigated and different factors under each
dimension of the marketing mix are presented based on a literature review. The BWM is used
to evaluate and determine the significance of each identified dimensions. Based on the results,
product, process and physical evidence are the most affected marketing-mix factors by
considering Industry 4.0.
In this study, the scope of research consists of the service marketing mix (7P’s) blending
with Industry 4.0. However, this does not mean that the research area is limited because it is
well known that even product-based industries are now transformed into service–product
systems (Kowalkowski et al., 2017). Because customers no longer need just the product itself,
they want additional services besides the product (Enkel and Gassmann, 2010) as well as they
want to get only the value inherently offered by the product use (Tukker, 2004 ).
This study is an initial attempt to investigate the potential impacts of Industry 4.0 on
service-marketing-mix elements. Future studies can be extended to analyze real-life
implementations of the suggested criteria. Also, global practices can be compared for
different countries under marketing-mix elements in Industry 4.0 environment. This study
was conducted in a developing country. Comparative results can be obtained with a study to
be conducted in developed countries.

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Corresponding author
Yucel Ozturkoglu can be contacted at: yucel.ozturkoglu@yasar.edu.tr

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