ABSTRACT
Firm incubation and marketing mix are not new concepts in the business world. They have been existing for decades and their meaning has been explained in real business sense. Despite being in existence for long, little is known about how marketing mix elements (popularly referred to as the “Seven P’s”) are used by business start-ups during incubation. Data were collected from owners of start-up businesses in the incubation centres at Makerere University, Kampala Uganda. The study adopted a qualitative research method because owners of start-ups see the application of marketing mix elements as paramount. Data were analysed with Nvivo 10 software. The findings show that the critical marketing mixes used for start-ups are people, price, product, and place. However, it was revealed that the way the marketing mixes were applied in start-ups is not clear. The majority did not know how to apply the marketing mix in running their businesses. It is recommended that incubation centres should put more emphasis on applying the marketing mix during the mentoring and coaching processes. This should become a policy in all incubation centres for start-ups to be successful.
Key words: Business, incubation centre, marketing mix, start-ups.
Globally in the recent years, several academic and business practitioners have switched to the use of business incubation model to develop and stimulate the growth of their businesses (M’Chirgui, 2012). This dramatic change in the model has been brought about by the emergence of the Silicon Valley and the Boston Route 128 in the USA and Cambridge’s Silicon Fen in the UK (Mian, 2011). Although this is an era of economic globalization, both developed and emerging economies are grappling with high rates of unemployment especially among the youths (M’Chirgui, 2012). In Uganda, the majority (78%) of the population are young below 30 years and are employed in small businesses due to lack of jobs (Kristensen et al., 2016). As a result, they start businesses with limited and sometimes without skills to run them (Gough et al., 2013). This partly demonstrates the high failure rate of start-ups and the need for incubation (M’Chirgui, 2012; Tushabomwe-Kazooba, 2006). In search for solutions to end the rampant unemployment, incubation of firms was started as an important instrument to steer growth of start-ups in both developed and underdeveloped countries (Kepenek and Eser, 2018; M’Chirgui, 2012). The aim of incubation is to create a platform to facilitate growth and development of start-ups (Chandra and Fealey, 2009; Hong and Lu, 2016; Jamil et al., 2016; Mutambi et al., 2010; Xiao and North, 2018). A number of researchers have argued that incubation centres are a fulcrum for business firms’ growth and development (Bruneel et al., 2012; Ganamotse et al., 2017; Hackett and Dilts, 2004; Mian, 2011; Van et al., 2018), and a nexus of new venture development and formation (Van Fossen et al., 2018). Thus, incubation centres have emerged to provide shared office space facility with a strategic value-adding intervention system of mentoring and business assistance (Hackett and Dilts, 2004; Van Fossen et al., 2018). Therefore, the rationale behind incubation is to reduce business failure (Abaho and Nkambwe, 2017). In the process, start-up firms are given skills that are important to enable them to succeed in business venturing in order to limit the failure rate of incubation (Mamabolo et al., 2017).
In Uganda, such infrastructure provides a breeding ground for the growth of start-ups because inadequate business development services preclude entrepreneur activity (Mpeera et al., 2013). In Uganda, entrepreneurship is seen as a source of economic transformation. Hence, their success would imply the growth of the economy (Baluku et al., 2016). As a result, the Ugandan Government strongly supports entrepreneurial growth due to its strategic role of economic growth and development while simultaneously eradicating poverty through wealth creation, employment and income generation among the youths (Abaho and Nkambwe, 2017). Nonetheless, many start-ups in Uganda still fail, which explains why a study on incubation and marketing in particular is paramount since incubation is known for supporting start-ups globally (Hackett and Dilts, 2004).
Start-ups owners need to develop knowledge to help them identify opportunities and take advantage of them. One of the key skills passed on to start-ups in incubation centres is marketing. Broadly, marketing is a process of creating value for exchange with customers and building a strong relationship to get value from customers (Inanloo et al., 2018). It enables start-ups to sell their products or services. Thus, grasping marketing skills help start-ups to deal with a number of key issues such as how much to produce, at what price, where and how to distribute the products or services and how to communicate to the target audience (Mamabolo et al., 2017).
These skills in business language are compressed into a marketing mix, which is a popular tool used in selling goods and services (Ashraf and Bhalla, 2018; Loo and Leung, 2018; Constantinides, 2002). Using marketing mix elements in start-ups is a strategy that can fairly reduce chances of failure in businesses and may scale up start-up enterprises. As noted by Ashraf and Bhalla (2018) marketing mix influences the demand for products and services. Also, Mohammadi et al. (2017) have argued that appropriate marketing mix is a vital marketing strategy that increases sales and profitability of businesses. Moreover, Festa et al. (2016) contend that every sector and business can actually use the marketing mix.
Marketing mix is a means to an end through which business firms achieve their objectives and goals through proper planning (Hanachor and Olumati, 2018; Mohammad, 2015; Van Waterschoot and Van den Bulte, 1992). Marketing mix is a strategy marketers use to sell their goods and services (Hanachor and Olumati, 2018; Stead and Stead, 2010). Thus, a marketing mix is a recognised strategy used to perform marketing activities (Hanachor and Olumati, 2018; Henley et al., 2011). Jerome McCarthy (1960), a marketing expert, introduced the four P’s in business as a theoretical framework to implement marketing processes (Festa et al., 2016). This classification/model has been used globally and is considered a critical means for translating marketing plans into business operations (Gordon, 2012; Wu and Li, 2018). Subsequently, Borden (1964) based on McCarthy’s earlier work increased the P’s to twelve elements in manufacturing firms. Later, Booms and Bitner (1981) made an extension of Jerome McCarthy (1960)’s four P’s to propose the seven P’s of marketing mix elements due to the introduction of service as a business which attracts people, process and physical evidence (Loo and Leung, 2018).
Accordingly, marketing mix has since evolved and today they are seven Ps (Hashim and Hamzah, 2014; Londhe, 2014). The four P’s are used mainly for products and the additional three Ps are process, people and physical evidence used for services. The marketing mix elements include product, place, promotion, price, physical evidence, process, and people. The seven “Ps” were found to increase the strength of start-ups due to comprehensive accommodation of details (Loo and Leung, 2018). Therefore, start-ups need to have a thorough understanding of the mix application because of the value adduced (Loo and Leung, 2018). The seven “Ps” are basic concepts used to understand the nature of marketing to enable start-ups meet customers’ needs profitably (Hashim and Hamzah, 2014). In fact, the success of business firms is juxtaposed to proper application of the marketing mix elements because it is capable of forecasting the needs of potential customers (Garusing, 2002). Start-ups, specifically in emerging economies, should adequately implement the marketing mix, because it can result in sound business profitability if properly applied (Constantinides, 2006).
Marketing mix is a set of controllable, tactical marketing tools that a firm blends to achieve its aims in a given target market (Kazmi and Batra, 2009; Wahab et al., 2016; Mohammad, 2015). In addition, marketing mix can be seen as a process or device used to create customers’ satisfaction provided by the marketer (Garusing, 2002). Hence, it is a combination of elements required for the formulation and implementation of all marketing strategies (Inanloo et al., 2018). Simply put, this means having a product at the right place, at the right price and informing customers of how the product will satisfy their needs. In a broader perspective, marketing mix implies a mixture of elements useful in pursuing a certain market response (Van Waterschoot and Van den Bulte, 1992). Given the diverse views of the marketing mix from the various authors there is a glaring evidence of no single definition and understanding of the mix. Hence, the multiplicity of the definitions possibly yields confusion in application (O'Connor, 2013). However, this study adapts the definition given by Kazmi and Batra, (2009), Wahab et al., (2016) and Mohammad (2015): a mix is a set of controllable and tactical marketing tool a firm uses in a given market. Therefore, the contribution to knowledge from this study is the provision of a clear understanding of the use of marketing mix by start-ups.
Start-ups are businesses that are beginning operations to create products or offer services to the public for exchange of value (Gough et al., 2013). Start-ups struggle to exploit immediate business opportunities often with little or no operating skills (Kristensen et al., 2016). In the context of many developing economies another critical “P” that needs to be added on the list and probably interrogated further is “Politics”. This interrogation is very important because it does not only determine many selling and buying deals, but sets the rules by which business is conducted as well as increases the attention of governments to support entrepreneurship (O'Connor, 2013).
It is a business practice to produce goods and services (Product), persuade potential buyers to buy (promotion), distribute the products to where consumers can easily access them (Place), determine the value of goods and services (Price), get workers to effect transactions (People), create and manage transaction (Process) and have goods and services in the most suitable environment (Physical Evidence). Moreover, businesses exist to sell goods and services sometimes with the same customers. Thus, the one who is able to do it better attracts and retains the customer. Since start-ups face competition among themselves, survival in an industry hinges on how well to implement the mix carefully (Wahab et al., 2016). Accordingly, the marketing mix elements are the wheels that drive successful business operations (Hanachor and Olumati, 2018). Hence, the marketing mix elements lie at the core of the selling of the start-up goods and services (Tomczak et al., 2018).
Although extant literature (Van Waterschoot and Van den Bulte, 1992; Constantinides, 2006; Kazmi and Batra, 2009; Hashim and Hamzah, 2014; Londhe, 2014) shows that since the 1980s there are seven P’s used in the business realm, little is known on how start-ups in Uganda are embracing and applying the marketing mix elements. Moreover, using the marketing mix elements helps businesses to effectively communicate and sell their products to end users (customers). The use of marketing mix element emphasizes aggregation because application of all mix elements brings about better economies-of-scale (Larimo et al., 2018). Although marketing mix elements have been studied by variously authors (Sanclemente-Téllez, 2017; Abril and Rodriguez-Cánovas, 2016; Londhe, 2014; Hashim and Hamzah, 2014), no study has assessed the marketing mix application in start-ups in Uganda. Moreover, where businesses apply marketing mix elements, the results show it helps them to increases sales and profits (Wahab et al., 2016). Thus this study is a rare contribution to the domain of marketing mix application literature. Due to the wide acceptance of marketing mix element use in business there is need to understand how such elements are applied in start-ups. The objective of this study therefore is to explore the application of marketing mix by start-ups, so as to understand the value of these marketing mix elements to start-up businesses. The novelty of the proposed study lies in the exploration of application of marketing mix elements in start-ups which have remained silent.
The two main concepts that form the point of the literature are “firm incubation” and “elements of marketing mix”. Druker (1958) once noted that marketing is a key driver of economic development due to its ability to support managerial and entrepreneurial development (Sanclemente-Téllez, 2017). It is a tool used to effectively market goods and services to prospective customers by communicating value (Ashraf and Bhalla, 2018). This increases the marketers’ understanding of the strategies available to market their offering to the target audience (Larimo et al., 2018). McCarthy (1964) referred to marketing as a means of translating marketing planning into practice. It is essential in the development of marketing theory and practice (Londhe, 2014). Wahab et al. (2016) argue that the marketing mix is critical for the survival of start-ups.
Although the order of the elements of the marketing mix is not described in the literature (Abril and Rodriguez-Cánovas, 2016; Hashim and Hamzah, 2014; Londhe, 2014; Constantinides, 2006), it is arguable that “product” should come as the first mix because price cannot be set, and a product cannot be distributed or promoted when none exists. Thus, the argument about the application of a marketing mix supports the assertion that it creates good performance (Hashim and Hamzah, 2014). In addition, the elements of the marketing mix are regarded as a toolkit for solving marketing challenges (Constantinides, 2006).
The P’s of a marketing mix
This section reviews the P’s of a marketing mix, namely; product, place, price, promotion, people, process, and physical evidence. Each element will be reviewed in turn.
Product
Product refers to tangible objects or intangible services produced to satisfy the needs of customers (Gordon, 2012). The failure of start-ups to manage this mix element will make the product or service inappropriate for consumers and may not be purchased (Loo and Leung, 2018). It is a tangible object or intangible service that is produced or manufactured and offered to consumers in the market (Gordon, 2012). The product mix needs to be consistent with the prospective customers in order to attract attention and be bought (Loo and Leung, 2018; Gordon, 2012). Product consists of core and supplementary value (Hashim and Hamzah, 2014). Start-ups must understand the value of their products and communicate it to consumers. It is those services and values that create a relationship with customers. In other words, these are tangible and intangible benefits that are purchased for consumption (Hanachor and Olumati, 2018). It is anything that is offered to the market to satisfy needs and wants of potential customers. Customers prefer products that can easily be adapted to their changing conditions and start-ups should be able to respond to the needs of their customers; in some situations they should be personalised (Constantinides, 2002).
In business, products are of two categories: consumer and industrial. Consumers’ products are used for final consumption, while industrial products are raw materials used in the production of other goods (Garusing, 2002). The application of the marketing mix helps the start-up business in developing a product or service that satisfies the needs of the potential clients. The needs must be identified prior to product development. It is, therefore, the main tool that combines marketing elements and represents the main activities of each enterprise (Inanloo et al., 2018). Start-ups without good products cannot survive because they will be devoid of competitive offer. Indeed, a poor product can and does fail enterprises. Primarily, products are ideas that start-ups come up with to satisfy the needs of the target audience (Henley et al., 2011).
Place
Place or distribution aims at creating convenience to consumers by putting the product into the hands of consumers at an appropriate time (Loo and Leung, 2018; Abril and Rodriguez-Cánovas, 2016). Place is known for encouraging local and export performance because it aids the distribution of goods and services (Erdil and Özdemir, 2016). Thus, for start-ups to sell their product they need to understand the best way their products can reach the target consumers otherwise they will never sell (Loo andLeung, 2018). Place plays two distinctive roles for start-ups that is making the products or services conveniently available and managing intermediaries (Henley et al., 2011).
Place represents the various channels used to deliver the products or services to the users (Garusing, 2002). This includes everything that start-ups do to make their products or services available to the target audience (Inanloo et al., 2018; Henley et al., 2011). Thus, start-ups need to know how best they can reach their target audience. Accordingly, ‘place’ represents the location where a product or service can be purchased, and can often be referred to as the distribution channel (Gordon, 2012). Until such knowledge is clear to start-ups they will struggle to sell (Inanloo et al., 2018; Loo and Leung, 2018; Abril and Rodriguez-Cánovas, 2016).
Price
Price is a marketing mix used to differentiate and position products or services (Sanclemente-Téllez, 2017; Abril and Rodriguez-Cánovas, 2016). Price is critical in attracting attention and determining the profitability of start-ups and should be arrived at meticulously (Loo and Leung, 2018). Price is therefore the amount a consumer pays for the product or service normally expressed in economic cost (Gordon, 2012; Henley et al., 2011). The price mix helps start-ups in generating revenue since it directly translates in the amount paid for goods and services (Johnston and Cortez, 2018). It is used to communicate the value of the service to customers, because it is the amount of money customers sacrifice to obtain a product (Mohammad, 2015). The price mix is used to stimulate the sale of a product or service and is a tool used by customers to assess product quality (Erdil and Özdemir, 2016; Johnston and Cortez, 2018). Since start-ups are formed for profit, price determines the profits obtained by the start-ups (Hashim and Hamzah, 2014). Price is the only element of the marketing mix that brings money to the start-ups. Yet it is the most poorly attended to element by entrepreneurs. Price is flexible and influential because it determines the revenue and profitability of the start-up enterprise. On the other hand, according to Garusing (2002), price has many terminologies, namely: in schools price is called tuition fees; in banks it is called interest for the loan acquired; in insurance it is known as a premium; and in places of worship it is called tithe.
Finally, price is actually the cost paid by the consumer to acquire a product or service expressed in monetary terms or value (Hanachor and Olumati, 2018). The price mix has a strong financial impact on start-ups. On average 5% increase may lead to 22% yield in operating profit. Although price is recognised as a critical mix for businesses only 12% of business firms conduct serious pricing research (Johnston and Cortez, 2018).
Promotion
Promotion represents the communication that marketers use in the marketplace including advertising, public relations, personal selling, sales promotion and direct marketing (Hanachor and Olumati, 2018; Garusing, 2002; Gordon, 2012; Henley et al., 2011). It is concerned with dissemination of product information to customers to educate them on the benefits derived from the use of the product or service (Hashim and Hamzah, 2014). This is about the processes taken by the producer of goods and services to inform or remind or persuade the customers to buy the company’s products (Henley et al., 2011). As a result, start-ups need to be familiar with the modality of how to communicate and deliver their products (Loo and Leung, 2018; Abril and Rodriguez-Cánovas, 2016). It is through this that potential and actual customers will get to know about the characteristics of their products and what they can satisfy (Hanachor and Olumati, 2018). During promotion, start-ups identify both the target audience and promotion objectives and then design the appropriate message for delivery. The message must be designed carefully to attract attention, arouse desire and cause customers to buy.
Although marketing is done for both products and services, there is a widely accepted view that the application of marketing mix varies in products and services (Mohammadi et al., 2017). This is why, the marketing of services compels marketers to extend the marketing mix to 7P’s by adding another three P’s: people, process and physical evidence.
People
Start-ups must be clear on how the people they employ will impact their businesses (Loo and Leung, 2018). People consist of human beings involved in service delivery and peer support harmonised to build lasting relationships with clients (Hashim and Hamzah, 2014; Mohammad, 2015). These are personnel in the various processes who play a significant part in service delivery by influencing the perceptions of the potential and actual customers, for example, the workers, customers and suppliers (Stead and Stead, 2010). This is so because service satisfaction is sometimes reflected on how the people interact with customers. Accordingly, start-ups must understand the people marketing mix in value delivery (Loo and Leung, 2018; Mahajan and Golahit, 2017; Mohammad, 2015; Hashim and Hamzah, 2014).
In addition, customers can also influence their fellow customers about the choice of service. Therefore, the reputation of the company’s brand rests in people’s hands, which requires them to be highly trained, well-motivated and with good attitude (Hanachor and Olumati, 2018). Accordingly, the element of the people mix is critical in start-ups because most activities are performed by people to satisfy the people’s demands. Hence, their motivation and behavioural characteristics make a huge difference in customer satisfaction because customers expect helpful and friendly people (Mahajan and Golahit, 2017).
Process
Process is about mechanisms and procedures set in place to assist in the delivery of services. It encompasses the delivery steps that customers go through in order to receive the services. This includes all the procedures and mechanisms which lead to exchange of value (Mahajan and Golahit, 2017). In other words, it includes all the activities that occur during the consumption of the service (Stead and Stead, 2010). Start-ups need training to understand how such processes affect their businesses. Customers normally make their judgement of the services based on these processes, for example, the length and duration of the services (Stead and Stead, 2010). Once the processes are considered bad then the services will certainly be poor. Thus, the process of giving a service and the behaviour of those who deliver are crucial to customer satisfaction. Processes should be known by service providers and consumers (Stead and Stead, 2010).
Physical evidence
Physical evidence is critical for start-ups because services are intangible and have to be consumed when they are produced. Therefore, marketers design an environment that can influence customers to recall the company products/services when they are making purchases (Hashim and Hamzah, 2014). It is that environment in which the service is provided and embedded in those tangible representations of the services including the physical facilities. It includes appearance of buildings, staff members, materials and other visible cues which provide tangible evidence of a firm’s service style and quality (Constantinides, 2006). Thus, it is critical that start-ups create an environment that will stimulate customers to derive satisfaction. Physical evidence plays a major role as proof for the service to be provided (Mahajan and Golahit, 2017).
The extant literature shows that many researches done on marketing mix concentrate on the four P’s perhaps because of the profound exposure in many foundational marketing classes (Constantinides, 2006). However, the three P’s of people, process and physical evidence are hardly studied. There is need to study all the seven P’s because they are pertinent in service provision and vary with product life cycle (Mohammadi et al., 2017). Applying the elements of the marketing mix is a critical aspect of any marketer because it stimulates the purchase of products and services. The mix is considered as toolkit and archetype for operational marketing (Constantinides, 2006). This works on both new and old products and services in the market. Accordingly, start-ups should know how to apply these elements of the marketing mix if their businesses are to succeed. Despite the immense attention to the use of start-ups as a strategy for business performance, no direct concern has been put to check the application of marketing mix in start-ups; yet its application is critical for their success (Mohammadi et al., 2017).
Exploratory research design was used in this study. This was a qualitative study with twelve respondents. The aim was to explore in detail the application of the elements of marketing mix in start-ups. Interview was used to collect data because the research aimed to gather insights into the application of the marketing mix. The respondents were purposively selected from three incubation labs found at Makerere University. The target respondents were owners of start-ups in incubation centres with at least six months of existence. The reason for choosing Makerere University is because it has a long history of teaching entrepreneurs, stretching over 94 years and the author is a staff. Since universities are known for generating knowledge globally, the researcher envisaged to find knowledgeable respondents from the university incubators. Besides, the incubators are coached and mentored by university staff. A list of start-up owners within the labs were obtained stating when they joined. The names of the proprietors were written down on a sheet of paper folded and put in a container. They were shaken to mix thoroughly well and then the researcher picked one at a time. Four names were picked in every container. The containers represented the different labs in Makerere University. The labs were software business incubation (SBI), Makerere Innovation and Incubation Center (MIIC), Food Science and Technology Incubation Center, and Imuka Ventures Incubation Center. The use of tins to selected respondents was done to avoid bias in selecting respondents. The researchers aimed to select proprietors of the start-ups which had been in the lab for at least six months.
After identifying the respondents, they were briefed about the study and appointments to meet them were secured. Face-to-face interviews were conducted in the incubation to allow the researcher observe the surroundings that were convenient for the interviewee. At the close of interviews, response data and field notes and observations were accurately transcribed and stored in word document for analysis. This being a qualitative study, interviews with respondents were recorded and transcribed for data analysis using Nvivo 10 software.
Incubators are taken as decisive steps to bolster start-ups and stimulate growth and development. Accordingly, many universities have adopted it as an important instrument to support students’ business ideas. The study explored the application of marketing mix by start-ups in incubation centres. It is widely accepted in marketing that the marketing mix is a tool used to effectively sell a company’s products/services.
Thus, its application would encourage the sale of start-up goods and services. The respondents were purposively selected. To avoid gender bias, the researchers selected six male and six female respondents for the interview. Their average age was 22 with much enthusiasm to run their business. Given that they were all university students, there was no need for translation because they understood English very well. Interviews were organized in the lab board-room to avoid extraneous bias. Besides, there was limited inconvenience from their usual work. Appointments for interviews were made in advance to avoid dis-appointments. Where the owner was busy with another meeting, the researcher rescheduled another date. All the respondents had stayed in the lab for at least six and more months. Thus, they were in a good position to provide accurate and valuable information about the application of marketing mix elements.
Table 1 presents the findings from the exploratory study with the owners of the start-ups in four incubation centres at Makerere University. The majority of the proprietors of the start-ups unanimously agreed that they knew and were introduced to marketing mix, although it application was a challenge. They had received training on how to use the elements of the marketing mix but not all of them were being tried out and they did not occur in any agreed sequence. Respondents indicated that the elements of the marketing mix were viewed differently. For example, four of the respondents ranked price as the most critical, two respondents ranked product mix, one respondent ranked place mix and five respondents ranked people mix critical as shown in Table 1. Figure 1 gives the percentage distribution of the count in Table 1. The most critical elements described as a key are as follows:
The ranking clearly demonstrates the ambiguity already discussed in the literature where no study has agreed on the order of the marketing mix to illustrate which one is the most critical for a start-up. In contrast, Loo and Leung (2018) and Ashraf and Bhalla (2018) argue that price and promotion are the two critical elements which form customers’ perception of the service. In addition, during the study participants attached high regard to the hard to achieve. Those that were most important in the sale of the product were considered critical factors. This does not imply that where no proprietors indicated preference relegates the element as being not useful as it is for promotion, process and physical evidence (Table 1). The most applied element of the marketing mix was people. One of the male respondents aged 22 in MIIC Lab remarked that:
“People are the most critical because they are both suppliers and consumers of the services or goods, thus without people you cannot even think about the products”.
The importance of the people marketing mix is reflected in the ranking (Table 1) where five respondents ranked it as the most critical for their start-up. The respondents revealed that the reason for considering people as a critical mix element was: it determined the success or failure of the start-ups; people can talk and make the sales of a product or service; they drive customer satisfaction; and people are decision-makers and all other elements are implemented through people. However, another respondent argued that although people are critical they can be useless unless there is a product to be produced and purchased.
In addition, the other element of the marketing mix which ranked next to people was price. Respondents argued that price is critical in determining the profitability of the start-up business. Besides, many customers are attracted by the price of the product or service before they check on the quality. Thus, if the start-up fails to effectively price their products or services they can hardly make profits and are therefore likely to die.
“This however is a difficult mix to apply in the start-up business, as it involves calculating the cost of production of the functional requirement and adding up a percentage profit margin. Thus, it is sometimes arrived at arbitrarily or by comparing with competitors in the market” (24 years start-up owner).
Product is a mix which brings all other mix elements into play. This was ranked by two respondents as the most critical marketing mix for start-ups. For example, it was argued that if you have no product to sell then you will have no business at all. This concurs with the position of Hanachor and Olumati (2018) and Wahab et al. (2016) that products determine business survival. Indeed, the concept of product determines how best the start-up will survive because a poor quality product with no value will not attract buyers.
One respondent said,
“product is so important and has to be of good quality because quality attracts and retains buyers, after all consumers buy value not price; if the value is not seen in the products then they cannot buy and besides product is linked to other P’s , that is price” (20 years female start-up owner).
Place was ranked as critical by one respondent. Place in marketing hinges on how a product or service will be distributed to prospective buyers. This needs to be clearly articulated because poor distribution of products or services creates inconvenience and precludes purchase due to inaccessibility. Hence, a start-up must have a clear strategy on how to distribute the products and services. Moreover, some products are distributed online which requires meticulous display besides constant availability. Thus, a respondent had this to say:
“Although I want to apply the place mix to distribute my service I am constrained by inadequate internet and also some of my clients have no access to internet; thus this P application to online service is still an uphill task for us start-ups” (22 year owner of a software start-up).
However, promotion, process and physical evidence were not ranked by anyone as critical mixes. Some were of the view that these three mixes were more of complementary than the real thing of the start-ups. In addition, they were easy to adjust if they failed to conform to the desires of the prospective consumers. The general impression was once you have a better product or service, at the right price, with the right people and well distributed then customers will certainly look for it. On this issue a respondent said:
“Good quality products can be promoted through word of mouth by referrals” (26 years start-up owner commented).
This partly explains why there are limited sales among start-ups because all those interviewed were not too concerned about promoting their products. Moreover attracting potential customers to products is done through promotion (Garusing, 2002). The empirical analysis reveals that despite the application of the mix in the start-ups there is a vague view of how the mix should be applied to maximise their usefulness. In addition, the use of marketing mix should be collective to produce positive results. This study found that start-up owners were not conversant with how to apply the marketing mix collectively. It was glaring that start-ups knew about the mix but hardly knew how to apply them in their business transactions with professionalism. This failure in application limits the performance of the start-ups as regards selling. Accordingly, failure to sell precludes profitability and hinders business growth.
In addition, majority of the start-ups were service-oriented businesses dealing in tech applications but did not regard process mix as critical. This is further demonstrated by failure to know how much it takes them to service a customer from when the customer contacts the business until the close of the deal. Service business satisfaction is rated on service dimension such as responsiveness; in other words, the speed with which a service provider responds to service request. This is much related to service process which we found inadequate among start-ups.
The findings reveal that the study has far reaching implications in the management and training of start-ups in incubation centres. It will require marketing mix elements to be combined in appropriate proportion to achieve the marketing goals (Ashraf and Bhalla, 2018). The findings may influence the decisions of incubator managers in stressing the importance of marketing mix elements during incubation processes. Lessons drawn show that start-ups with marketing mix knowledge could apply and perform better. This is due to the skills acquired during incubation (M’Chirgui, 2012). They however required extra emphasis on how to use them efficiently. This therefore supports the views of Baluku et al. (2016) who found a seven percent start-up success in developing countries. Many marketers argue that effective combination and utilization of the marketing mix enable the sales of goods and services.
However, the attack on the marketing mix and perhaps the motivation of this study is the vituperative criticisms of the mix in recent years and its application to complex goods and services (Gordon, 2012). The critiques argue that the mix focuses on the short-run and are devoid of what happens in the long-run. The static nature of the marketing P’s also leaves a lot to be desired because the markets are changing. Thus, for start-ups to survive they need to be responsive to the needs of their target audience. Since early 1960s and up to the current times there is need to adjust or adapt to new marketing mix that matches the contemporary challenges faced by start-ups. Therefore, the emphasis is not to apply the Borden (1960)’s marketing mix but to adjust to rhyme with the needs of the current market challenges faced by start-ups. However, the application of the marketing mix is critical to start-ups because it shapes the thinking about resource utilization and influences consumer behaviour critical to buying the products and services of the start-ups.
The findings show that respondents did not identify a preferred element of the marketing mix. Besides, participants revealed that there was no deliberate effort from incubators directed towards marketing mix training for start-ups. In the ranking, respondents (company owners) gave different elements of marketing mix as critical to their business. It is clear that the majority were of the view that people are the most critical and some said product is the most important mix; while others argued that it is price. Therefore, there is need to carry out another study to validate the elements that are critical for start-ups. Moreover, standardizing and ranking of marketing mix has remained a challenge to both academia and practitioners (Larimo et al., 2018). Given that this study was qualitative in nature and that a limited number of start-up owners were interviewed, the findings are limited to the extent that they cannot be generalized.
The importance of marketing mix in start-up business cannot be over-emphasized but its application is still rudimentary and poorly practiced in incubation centres in Uganda. The findings revealed that the majority of start-ups in university incubation in Uganda were exposed to the marketing mix during incubation but with less emphasis. Consequently, this affected the application and precluded selling and marketing of goods and services of the start-ups.
Moreover, the understanding of the terminology (marketing mix) was new to start-ups raising concerns that the trainers, coaches and mentors in the incubators in Uganda may not necessarily be marketers or did not have enough knowledge on marketing. Although some start-ups had knowledge on the marketing mix there was no deliberate effort in the incubation centres in Uganda destined to making start-up owners to fully understand how the mix can be applied; it has remained a major challenge. Moreover, the application of the marketing mix yields results through increased sales (Ashraf and Bhalla, 2018; Loo and Leung, 2018). The analysis further shows that start-ups did not value promotion and yet it is the only way prospective customers get to know about their products and services (Loo and Leung, 2018). This explains why startup incubation centres in Uganda should emphasize marketing mix application because of its usefulness in developing and growing startups.
In addition, there is a need to have a syllabus for incubation centres to calibrate the training materials. The study therefore provides theoretical grounding upon which one can further the research in the application of marketing mix. This is critical for policy-making purposes as government strives to support business growth. In addition, owners/managers of the incubation centres can use this information to enliven on the services offered. Besides, start-ups require this information to understand the critical nature of marketing mix application.
The author has not declared any conflict of interests.
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