Against the Odds – The Marketing Dilemma of Physical Products in an Increasingly Virtual World.

The overarching battle between the physical place and the virtual space is part of an intensive discussion. Much related literature addresses exemplarily the dilemma of the global Home Entertainment Industry and its struggle to compete with its physical product of optical discs against virtual services of dematerialised downloads. With regard to effects on an increasing number of further industries in the near future an additional question is, how marketing strategies and tactics in a declining physical market place may be sustainable and how effective applied frameworks, which were created for markets of different rules, can fight against increasing emergent online developments.

The underlying long-term study this paper presents in some excerpts researches the Home Entertainment Industry and intends to find explanations, why this industry has failed so far to provide sustainable answers, which may be helpful for other industries, too, to recognise underlying patterns being advantageous to develop a sustainable, future-oriented marketing strategy.

Within the objectives of this paper the marketing mix is exemplarily challenged. Created several decades ago, before ICT-based opportunities changed the environment of market activities, it is still widely used in practice, but academically critically discussed. The marketing mix refers much to transaction, which as the criticism highlights, neglects the shift to relationships being the basis for successful customer lifetime value and long-term organisational advantages. One of the implicit challenges is that the virtual space threatens the P, place, directly. The music industry’s professional body IFPI recommended its members in 2009 to reflect on a strategy of access instead of physical sales: Virtual dissemination vs. physical distribution / unlimited access instead of limited product offer. This example gives reason to question, whether a number of marketing frameworks can still have the same value in such a changed world.