Why Do B-Schools Still Teach The Famed 4P’s Of Marketing, When Three Are Dead? That was the question raised by Jens Martin Skibsted and Rasmus Bech Hansen and it received some good traction. Skibsted and Hansen argue that the only P of the four alive is Product.
Now, I won’t spend time arguing their arguments. I can see how they (and others alike) came to their conclusion. I’m just not so much of a guy that throws good stuff away. I like to try and see if I can fit what I think and see into the current framework. So here’s my perspective on the 4 P’s:
Places your Customers are..
At first I think marketers continue to need to answer the question where they believe their market is and subsequently they need to design the business model to serve that market. This is even the case for pure on-line business models, because local laws and regulations need to be taken into account. We all know of the challenges Facebook, Google and Twitter have when trying to enter the largest country in the world.
More than this, Place is still a very relevant concept to think about in your go-to-market strategies when it comes to understanding where your Customer segment is. In this day and age of information overload it is extremely important not only to be relevant, but also be close to the (potential) Customer when the problem your product or service can help solve, becomes relevant to them.
The Internet has not made the P of Place irrelevant, it has made Place one of the complex problems to solve, imho. And the solution, is not always to be found on-line either.
Price as a Key Performance Indicator
Yes, transparent markets dictate prices for many products. Not because these products are the same, but because they perform (part of) the same or similar jobs for Customers. In other words: it’s not the value of the product that determines it price, it’s the quality of the Customer’s job fulfillment, in its context, that determines how the Customer values your product or service. And the way it’s priced is an important element in the Customer’s evaluation of the service offered AND/OR consumed.
Price is probably something you should start seeing as a key performance indicator of how well you help solve your Customers’ problems and what value that represents to them.
Last but not least: prices may be very transparent, but not an element in the marketing mix to ignore, if only because it is still a very strong, and widely used, lever to pull when one wants to enter a market, or defend it.
Promotion, of who.. and what exactly?
Without promotion your product or service will not make it in the crowded market place. It’s that simple. Yes, paid promotion (or media) may become less effective in some cases, this can be leveraged with earned and owned promotion. Nevertheless, it’s promotion, even if your Customers do it for you.
I think there’s also some other elements to Promotion that are becoming more and more important. I think Promotion should not longer be just about you, yourself and you.. Promotion of others by means of game mechanics is an example how promotion of someone else’s behavior can help your business as well. Or think about how businesses with a multi-sided platform business model empower others to promote themselves. And, last but not least, promoting a purpose based on (community) values, if authentic, is the new ad.
Product was off the table years ago..
Now for the more interesting part. Product is probably the only P that has been off the menu for a while. Not only have we already moved from the Experience Economy to the Era of Engagement (at least, that’s what they say), we know for some time that it’s not about products or services, or a combination of both. It’s not even about the value you(r product) offer(s). Simply because value is not something to be offered, it is to be co-created in use.
The product is mostly just one of the tools a Customer uses to get his job done. (Btw: making it essentially company centric to rename your product to “solution”.) Again, you as a company, nor your products or services, solve any Customer problem by yourself. You, at least, need the Customer to make that happen. Hence, you can only propose value to be co-created, also known as your value proposition.
Of course the four P framework is not the only thing a marketer needs to understand, let alone that stating it is all about the product (or content for that matter) makes any sense really.
In my humble opinion it is better to adapt your understanding of what the framework represents in the context of the world today (and maybe tomorrow) then to announce its death. Because the latter will give you a good nights’ sleep believing “one “P” will be easier to learn than four”, the former will last you a fortnight at least. Guaranteed :)
Thanks for reading! Please consider leaving me some feedback, or your own views. And, if you liked it, please share..
As someone who teaches using the 4P’s framework (at an undergraduate level) but also struggles with its relevance in the operational sphere here is my 0.02 worth. The 4P’s are a pedagogical framework that stands the test of time. While originally designed to be definitive I don’t know any lecturer that uses them for more than a framing tool to draw students attention to the complex nature of the marketing mix decsion process. The semantics of what each P represents can go on forever (and actually demonstrates the value of the framework).
Despite the significant changes in the business environment since the 4P’s framework made its way into our marketing lexicon, its fundamental application remains relevant. Marketing cannot be reduced to a single element and cannot be simply applied in a functional sense… the inclusion of the different elements (beyond promotion) highlights the need for the whole organisation (Accountants / Price; Logistics / Place R&D / Product) to incorporate a market(ing) perspective.
I am my no means a 4P preacher and it is not beyond critique (I myself have done it:as a basis for my Phd and in a soon to be published Marketing Theory article)…However it remains is one of the ‘simplest’ and useful frameworks to help understand marketing and what more could anyone want to help introduce an undoubtedly complex phenomenon…
If however you consider the 4P’s to ‘be’ marketing rather than a helpful diagnostic, then certainly your mental models need adjusting!
An interesting post and discussion. Well – agree with you and the others that the 4Ps are not dead by any means.
I think you are right on the money when you say we just need to adapt the 4Ps to the world we are living in. The world has changed, the technologies and tools we use have changed, our customers have changed (more sophisticated & connected) ……but at the core the fundamental concepts still hold true.
Taking Promotion as an example, in the pre-Google era there was no paid search, display advertising, or concepts like retargeting etc. Also, till “relatively” recently there was no social media or social networks as we know of it today. When kids studied ‘Promotions’ in school even a decade or so ago it was primarily traditional advertising (TV, print, Direct Mail etc.). That has changed now. Promotions are increasingly becoming digital, mobile, and local.
Further, the concept of time has changed in ‘Promotions’. In today’s world, a customer might suddenly fancy a product and would want to see “in real time” if there are any deals for that product or want to do a price comparison.
Same goes for the other Ps. Our mental models needs a shift on what it means but we still need to consider the Ps.
I essentially agree.
The more things change, the more they [fundamentally] stay the same… The marketing mix is still a very useful concept:
The Product [or Service] is live and well. However, the product development process is certainly becoming more inclusive and more collaborative. Customers, particularly lead-users, creative customers, and emergent customers are co-designing and co-creating more and more products and services with companies. The “experience” does not replace the product but complements it.
The Price is also live and well. It is certainly becoming more transparent and more comparable, as you have indicated. Also, relationship pricing and network pricing strategies will become more prevalent.
The Place likewise. The Place however is becoming more diversified and more ubiquitous. For example, companies can now bring the [Place] stores to the customers:
The Promotion likewise. The Promotion too will become more relationship-based and network-based. Also, companies and certain customers will, more often, collaborate on jointly promoting the Product or Service.
As always you make excellent observations I largely agree with. And a great post on bringing the store to the Customer.
Thx for reading & taking the time to contribute :)
I agree that the 4P’s live – but maybe like many elements of “Strategic Marketing” we have forgotten some.
For example, Place covers both channels and customer service. So it can cover:
* distribution over and above physical goods
* all the routes to market including the internet
* customer retention and profit
* where you sell or where you keep inventory
* bundles of economic units
* dis-intermediation and re-intermediation strategies
to name just a few. Some great brands exist in many respects due to changing the Place elements expected – for example both Dell and then Apple have re-defined this to great success.
Thx for the visit and comment. And I like how you emphasize place not only covers where you meet with your Customers to sell your product or service.
Thx again. Hope to see you back soon.
Wim, I agree. It strikes me as absurd to argue that the 4Ps are dead – for Place alone, the example of Tesco Korea’s “subway supermarket” springs to mind.
I’m still holding out for the experience economy, though. As a theatermaker, I believe that engagement is a quality of an experience – not a replacement – and that the best experiences are the ones that engage me wholly…
An excellent example! Here’s a link to a short video explaining the “subway supermarket” http://www.youtube.com/watch?v=fGaVFRzTTP4 for people who haven’t seen it yet.
And I also like how you “frame” engagement as a quality of an experience. Not sure I agree though completely. I too think btw they are concepts that augment, not replace, each other. I’m not sure though that the best experience are the once that engage wholly or totally.. E.g. I think of providing feedback as an act of engagement, which in return is an experience itself and can be a result of a terrible experience one had before.
Or, in short, I follow the definition of engagement by van Doorn et al. (2010):
customer engagement behaviors go beyond transactions, and may be specifically defined as a customer’s behavioral manifestations that have a brand or firm focus, beyond purchase, resulting from motivational drivers.
Thx for reading & taking the time to comment!
Interesting discussion, Wim, which also ties in to a thread I recently had with Harish Kotaida – on place. He argues that one (mandatorily) needs to be physically close in order to establish a successful social CRM initiative. My argumentation is that it is more important to be relevant and with that implicitly the closeliness to the customer comes into the picture. Just that it is not necessarily a physical proximity but one that might be established through the channel(s) used for establishing and maintaining contact, which might be a store or or some or the other online channel, or a combination thereof.
How do you define “close”? You left it somewhat open in your discussion.
Although I share your opinion of value co-creation I think that in realitas we are more talking about value creation. Remember our discussion on the food industry? The product surely helps me getting the job done (get the meal prepared, so that I can feed my family something that tastes well and is not too detrimental to our health, if at all). Are many customers interested in participating here? Likely not. Voting here happens via price (thus promo is helpful again) and some “quality” aspects; with, looking into studies on obesity this to quite an extent being a matter of income.
2 cents from Down Under ;-)
Great questions. First, I agree with you that “close” does not per se means “nearby”. To me it does mean you need to be easy to access, and you need to be in the vicinity of your Customers’ and/or you need to have a lot of interactions with your Customer.
Think Google, who’s on almost everyones fingertips these days, like Amazon. Apple takes it one step beyond and provides a platform so that others can be close too.. And all of them have plenty of interactions with their users and/or Customers on a daily bases.
Is that a clear enough answer to your question what I define as “close”?
With regard to your view on Value Co-creation, I follow the logic of Steve Vargo – a Service Dominant Logic, who states that all value is co-created. Even in your example: the Customer needs to prepare the food and eat it.. which qualify as acts of participation in the value creation process, imo. Don’t you agree?
There is btw no right or wrong way to look at this. Value Co-Creation as I see it, should be considered as a lens to look at how value is created, and what it takes from both (or more) parties to do so.
Thx for your comment & read :)
great answer :-). I fully agree to your definition of closeliness. It means ease of access, availability and interaction.
I am not that astute a student of Steve Vargo, so am looking at it more naively. To me the co-creation comes into picture when I have influence in the creation process of the product I use as well, else there seems to be no real collaboration but this may be pure semantics.
The lens picture is pretty good, maybe mine is cut slightly different ;-)
Thanks for your answer.