Product, Price, Place and Promotion. These have long been the 4 pillars of marketing, but are they still relevant? Putting the right product in the right place at the right price with the right promotion meant you would have the greatest chance of marketing success, does this still ring true? Focussing your marketing on the traditional 4P’s makes it easy for the customer to ‘cherry-pick’ from a shopping list and makes your sales team focus on price and specific product features. It’s time for a change.
Are The 4P’s of Marketing Still Relevant?
The 4P’s have been in every textbook ever written on marketing, and even been expanded to 7 p’s by some marketers to include People, Process and Physical Evidence. But just as social media has changed promotion, the relevance and application of the other “P’s” are now being questioned. Respected business publications like the Harvard Business Review and McKinsey’s Quarterly are starting to ask whether the way we have traditionally looked at the marketing mix needs to be freshened up.
The 4P’s of marketing have served us well. Businesses that got the mix right were often more successful. Creative marketers knew how to manipulate the mix for different customers to achieve different results. But by simply looking at these finite items we run the risk of making our clients and sales teams product and price centric. Expanding the concept associated with each of the core principles of the 4P’s, businesses can make themselves more relevant and in turn develop an opportunity to better differentiate them in the market.
Solution v Product – In a B2B market, your customers are rarely looking for just a product. They are not looking at your features, but are looking for a solution to a problem. What benefits do you deliver? The company that can best identify, articulate and provide the best solution to the problem will win the deal. Businesses are today more than ever focussing on their core activities so purchases are made to allow them to retain that focus, reduce costs and improve productivity. Solutions deliver, not products.
Focussing on the solution and not the product creates a change of mindset as it forces you look at the sale through your customer’s eyes. What is it they are truly trying to address with their purchase? What issues are they facing post-sale that can be addressed by packaging products and services into an integrated solution? Selling solutions provides an opportunity to differentiate your product from those of the competition and makes it difficult for them to compare, and buy, on price alone.
Awareness v Promotion – Promotion suggests an advancement of your position and leads to an organisation thinking about how to encourage a prospect to make a purchase. There is nothing wrong with this as any marketing activity should lead to a sale and a positive experience for both parties, but how this is done, is changing. Such is the availability of information in today’s online world, some marketing research is suggesting that your customers could be as far as 70% into the buying cycle before they engage with a sales person. Even if this is only partly true, providing relevant information to the market about your solution at each stage of the buying process positions you best to be favourably engaged.
Value v Price – A sale is never made on price. A bold statement; but true; particularly in B2B sales. Value is defined as the relationship between what you are charging (the cost) and the perceived or expected benefit your customer will receive. Even with commodity items people will pay a premium for better service or quicker delivery – they see this as ‘added value’ for which they are willing to accept a higher cost. If, in the customer’s mind, the price you want to charge does not provide more significant benefits than a similar competitive offering, they are unlikely to choose your product or service.
What problem are you solving and what cost did the problem have for the business? What production improvements are you helping deliver and what will be the profit impact of such improvement? The more benefits you can deliver at the same cost, the greater the value. Make your solution relevant to the customer.
Integration v Place – While ‘Place’ traditionally looked at the locations and channels that were most appropriate for a potential customer to make a purchase (ie the final step in the sales process), business must now consider how the solution will fit into the customers business. How will it be packaged? How will it be delivered? How will it be installed or deployed? How will it fit into the value-chain? Considering the integration as opposed to only the interchange of goods and money, makes you part of their business and greatly improves the opportunity of establishing a long-term relationship.
Marketing is being driven by changes in how customers choose to engage in the sales process. Continuing to force the traditional 4P’s into this new world of sales engagement will mean that businesses that fail to adapt, will in turn fail to prosper. Change is inevitable in all business, marketing is no exception.