4 P's of Marketing in 2021
It's almost 2021 already! So why are you using marketing concepts the same way they used 60 years ago?
Ah, the famous 4Ps of Marketing. You remember them from school product, price, place, and promotion. Often referred to as the marketing mix.
The use of this concept, especially in the digital world, is generally a bit short-sighted these days.
For example, many times when describing the impact of marketing mix (where most businesses do their business), companies post: Online Sales.
Is that enough?
And how to define PRODUCT, in such a fast and dynamic digital world, in which startups pivot their business model at all times?
For example, Instagram started out as a Burbn, a mobile check-in app.
The founders rebuilt the product after realizing that sharing photos with filters was the most used feature in the app. PIVOT, now we see Reels coming into play as the quick, fun, video trend continues its momentum.
Furthermore, the classic 4Ps was invented about 30-40 years before the advent of the Internet. Since which time, the boundaries between physical and digital have been vastly altered. Nowadays many companies have digital and technology embedded in what they offer.
Take UBER, for example. The service needs the application to run. Without digital, the business would probably not exist.
Refresher… what are the 4Ps of marketing anyway?
Also known as a marketing mix, 4Ps are a model for building marketing and promotion / outreach strategies.
They refer to a set of marketing tools that companies use to pursue and achieve their goals.
The P's are:
PRODUCT: what you are selling. It can be a product or service;
PRICE: how much you charge for a product. This generally takes into account promotions, discounts, and special offers;
PLACE (Location): where you will sell this product. It includes all distribution channels, online and offline. In the offline environment, this includes details about which stores, under what conditions, and how you can guarantee distribution to those stores;
PROMOTION: how you will promote your product. Traditionally, this referred to sales and advertising events and actions.
First published in 1960, 4Ps were the dominant framework for making marketing decisions for most of the 20th century.
In the 1990s, as the focus shifted to customers, the structure gained a new interpretation and application.
What should a reinterpretation of 4Ps cover?
There are two major changes to be considered here.
First, products are more than just products - a product is now an experience, a story, a set of interactions between customers and companies.
It starts before buying a product or service and continues after purchase.
Second, technology began to play an active role in the success of a business.
Think email lists/marketing.
1. PEOPLE - Persona
A product or service is nothing without the people who buy it. Now, more than ever, people must come first.
Because they are often the ones who indirectly decide whether a company remains in business or goes bankrupt. They decide what to invest their money in.
When we say “people”, we don't just mean demographics.
“People” represent a target audience that needs or wants your product. They can be of different ages, genders, and interests, as long as they share points of view and the need for what you are offering.
However, there is a trick here. Companies need to identify a group large enough to make a business viable. Hence target markets.
If they are serving a very small niche, without any potential for growth, it can be difficult to keep things going.
2. PRODUCT - Value Proposition
It is tempting to continue using “product” here. But people don't necessarily buy a service or product, they buy the value that that specific product or service offers.
(Think brand & brand value like here like Nike or Pepsi)
A key point to understand here is that value is strongly connected to people's needs and wants.
It often derives from solving customer needs and problems. The bigger the problem, the greater the need for a solution.
On the other hand, a product or service can have an incredible value from many perspectives. However, if no one wants or needs it, it is all in vain.
But that does not mean that the value is in the construction of specific resources. It is in the benefits created by these resources.
Take Netflix, for example. In addition to TV shows, documentaries, and movies, Netflix is about entertainment that can be accessed from any device, anytime.
In addition, the value is relative to the people for whom the product is intended. The question is not so much what you are selling, but to whom.
You may have a large segment of people who want to buy a house, but for sure singles will have different expectations and needs than families, for example.
To be relevant, companies need to provide more than just a product or service, they need to provide value.
In addition, the value can change over time and companies must find ways to accommodate and respond to these changes.
3. Place - Proformance
Whether it's a digital sales program set to to acquire and retain customers, or a new all in one deep fryer, air fryer, microwave, thing. Profromance and technology are key to it's success.
A great example is Google. Although it was not the first or the only search engine on the market, Google became the market leader because of preformance. The company returned the most relevant results due to the programing and processing of data.
And it still does that - even though the volume of data tracked has increased considerably since 1998. To keep up with this and other challenges, the algorithm has been rewritten at least 2 times and continues to be improve it's performance.
Success doesn't just depend on the value delivered to a group large enough. It also depends on how fast, accurate, and error-free this solution is.
The best quality product will fail if it's proforamce is slow.
The key here is to keep an eye on performance and how technologies evolve. What works perfectly today may not work as well when the number of users or the amount of data collected increases.
Think about it from people's perspective: Would you stay and wait for a program to load? Would you continue with a program that usually fails in the tasks you should be doing with it? Would you keep an employee on that takes 2x the time to input information as most? If you answered yes to any of these we can assure you, you're in the very thin minority.
To reach the people for whom it was designed and created, a product or service needs to be promoted. This is even more important when markets start to get crowded and it is difficult to say how different competing services are, well different.
This element is still strong, even though it has undergone some major changes:
New channels: The digital world has opened up new ways for companies to reach an audience. Consider social media, email marketing, content marketing, and native advertising.
Advertising overload: Currently, the average person is exposed to about 5,000 advertisements a day. I don't know the exact numbers of the ads from the 1990s, but I doubt that there were so many, considering less channels exicted. Our agency alone currently have ads on almost every platform for clients. Hooneybook, TikTok, Google, Facebook, Instagram, Snapchat, the list goes on.
Personalized messages in all channels: marketers currently have many channels, each with its own specific qualities. In addition, we have much more control over which message is displayed, to whom, and where.
Making sure your audience hears about you and your solution is essential these days. Absoulty essentail.
Promotion should be about communicating the value that companies create for a specific segment, not for all of their customers. It should highlight the benefits it brings to users, not its resources.
Given this reinterpretation, let's see if that answers the original question well.
How accurate are 4Ps, a 60-year-old marketing model, today?
And then it dawned on us that this might not be the right question to ask.
Yes, marketing has changed considerably in the past 60 years. But business too.
Until the early 2000s, most companies generated revenue from selling physical products or services. Google and Yahoo! were among the first companies to generate revenue through digital products and services.
Basically, this opened up a new type of business, with a totally different model. And since then, we have seen a steady increase in the number of these companies.
But that does not mean that traditional companies are dead. As recent history shows, digital business models for the consumer are facing challenges.
Perhaps it is time to apply some of our own techniques and segment companies according to the type and model of business.
One size does not fit all here. Putting everything in the same package does not make sense, because digital companies operate and serve customers differently than traditional ones.
Just Get To It!
To conclude the biggest thing to realize here is that different companies with different business models need different models to be successful.
What worked for Pepsi may not work as well for Google, for example.
In addition, traditional physical companies have hundreds of years of history and examples. The digital ones, on the other hand, are 20 to 30 years old at the most. It may take a while before we have a valid structure, supported by sufficient data for them.
To end on a very philosophical note: to know where you are going, you have to understand where you are coming from.
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