Thursday, March 19, 2009

Are the Four P's of Marketing Still Relevant?

David Meerman Scott is a business author I think has some wisdom to share. His book, The New Rules of Marketing and PR, had some great ideas to make organizations more successful in their use of the Internet. I liked his book so much that I subscribe to his blog. One of his most recent blogs raised the question of whether the Four P's of marketing are still relevant and Mr. Scott does not think they are. I would like to offer a different point of view.

As students of marketing know, the four P's are product, price, place (of distribution) and promotion. Let's discuss each of them and draw our own conclusions as to their relevance. And, I think it important to acknowledge that each of the four P's is a strategic discussion in itself. Following that, I would like to introduce a fifth P for your consideration.

The Product (or service) any organization decides to market needs to be thought out significantly before introduction. What buyer needs will it meet to ensure success? How will it differ from competitive products already available? Will it be better or merely different? How will it be formulated or delivered to the market? Will it developed in-house or will the product be manufactured by someone else and then sold under another brand name? What will be the level of quality of this product? Acceptable or of the highest level possible? This is important because the pricing structure will be influenced by decisions about product or service quality. I can go on and on, but I hope I make the point that no one can market any product or service successfully without thinking about issues like this.

A pricing discussion must closely follow the product discussion. Product quality and features will dramatically impact the pricing model. An organization cannot introduce a superior product without it usually impacting their pricing substantially. They must decide what the market can bear from a pricing standpoint and make their product decisions based on that. Or, make the pricing decision based on the product quality level they want to introduce. Either way, they must carefully consider the ramifications of both issues and their inter-relatedness.

The decision about Place (of distribution) is also a critical component of any marketing plan. Will the product only be available in a traditional bricks and mortar retail location or will it also be available via the Internet? Most consumer businesses now have a web component to their marketing and any marketer would have to give me a darn good reason why they did not want to market the product via the Internet before I advised against it. And even with the explosive growth of brands available on the Internet, we marketers still have to be thinking about a variety of distribution channels. But let's just think retail bricks and mortar for a moment. Will the product be available at only one location or several? Where would those locations be? Would network marketing also be utilized? Would the distribution of the product include wholesalers? More complex distribution channels? Somebody better be thinking about this stuff!

In their book, The Discipline Of Market Leaders, Michael Treacy and Fred Wiersema discuss three different value disciplines one of which every organization should adopt if they are to truly be successful. Those are 1) operational excellence, which usually leads to a low price strategy because the organization can produce the item for a lower cost; 2) a product leadership, which will offer a product that is superior to others in the marketplace; and 3) customer intimacy, which will deliver what specific customers want. While not exactly on target, the book closely mirrors the first three P's of the marketing mix.

Now to Promotion, the fourth P. I have never heard it discussed this way but I think it important to understand that Promotion is somewhat independent of the first three mix variables. What I mean by this is that Promotion, the fourth P, must promote the other three P's of marketing. And not just promote them, but every brand strategy should include a decision about which of the first three P's is most important. Thus, every strong brand will emphasize one of the P's more than any other (product superiority vs. price/value vs. availability/convenience) and all the fourth P (promotion) will do is promote that P to the greatest extent possible.
Promotion, the fourth P, must promote the other three P's of marketing.

To those who believe that because the Internet is now upon us, everything has changed with regard to marketing's four P's or even with just Promotion, take another look. Everything has not changed. A lot has changed, particularly in the area of marketing tactics, and we have a lot more opportunities (and challenges) with the Internet and other new media, especially in the area of promotion. But to say that everything has changed in marketing and that what any of us knew 10-15 years ago is of no value, throws the baby out with the bath water.

Before I let you go, one final point. I think there is a fifth P that should never be omitted in a discussion of the four P's of marketing. It is the most important P and I have never seen this P discussed with the other four P's. I maintain that the fifth P is the Prospect for the sale. We must always put that prospect in the center of this discussion. What does the prospect want from us? What is their need that we are trying to fill?

If we can keep the Prospect in mind, in the center of this intellectual debate (and in our marketing planning), we will ensure that our decisions regarding the other four P's have the best chance of being successful.

Thanks for reading. More to come.

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