“Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.”
George Soros
George Soros
The basic function of marketing professionals is to add value to an organization by increasing the sales of its products. The present generation of marketing professionals have been brought up on the concept of the “Marketing Mix”, which addresses the issues of creating a marketing plan. The term itself was created in 1953 by Neil Borden and within it the 4P’s classification was added by E Jerome McCarthy in 1960.
The 4 P’s classification has in it the four elements of Product, Price, Place and Promotion. In its traditional copy book sense, this classification was sufficient to position products, however with the explosive growth in “knowledge” and its use in adding value to products, the classification of the 4P’s is losing its relevance.
Take for instance, a hypothetical situation where executives from a music company are defining their marketing strategies on Price and Place vis a vis their traditional competitors. This would have been fine a couple of years ago, but today they will realize that their competition is not from other music companies but from mobile service providers, who can make caller tunes available. In India the largest music company from revenue is not your traditional HMV or EMI but Airtel, a mobile service provider selling ring tunes.
Similarly the largest camera company is not a Canon or Kodak, but Nokia, whose camera phones outsells all other cameras from traditional camera companies.
The knowledge revolution brought about by large scale computerization, global connectivity through the internet and convergence of various media have all helped to render traditional thinking to the realms of history.
The ability to video conference and tele-presence have made the need for intercontinental business travel so less necessary, so that airlines face competition not from one another, but from a company like Cisco.
The signs of these fundamentals shifts have been there for more than a century. Western Union was the biggest communication company in the 19th century but it missed out on the telephone and its pre-eminence in communication by virtue of its telegraph business was lost. Kodak was late in its entry into the digital medium and the results are there for all to see.
Marketing professionals today need to realize that there is only so much value they can derive from their products and there is a limited shelf life. The focus on data can be dangerous as data is based on the past, it cannot really give a pointer to the future, as the future is constantly changing. In the words of John Sculley
“No great marketing decisions have ever been made on quantitative data”
Today’s marketing professional has to be an out-of the box thinker, and have the courage of his convictions, because his decisions will probably not be based on precedent, he would be creating the precedence.
7 comments:
Very rightly said "No Great Marketing decisions are ever made based on quantitative data"
The marketing mix framework was particularly useful in the early days of the marketing concept when physical products represented a larger portion of the economy. Today, with marketing more integrated into organizations and with a wider variety of products and markets, some Organizations have attempted to extend its usefulness by proposing a fifth P, such as packaging, people, process, etc. Today however, the marketing mix most commonly remains based on the 4 P's. Despite its limitations and perhaps because of its simplicity, the use of this framework remains strong and many marketing textbooks have been organized around it.
Competition is not from inter industry standards but from globally intra prospective.Where majority is able to define a value added service for customer.
MM and 4Ps will always be useful resource for tapping a new clientele and leveraging services to potential clients but not limited to this only innovation will be a key of success in future for a Marketing professionals.
Hmm.. I've thought about this alot..... and I agree with you to some degree.
frokostordning
Sunil -
The 4 P's will ALWAYS be relevant in our ever-more-connected world economy. The internet may bring new products to the fore (Cisco routers), or it may change the nature of promotion. It certainly changes our traditional concept of place, although FedEx may mitigate that parameter as well.
The unique combination of ALL 4 still defines each company and its market offerings.
5 years ago I would never have dreamed that a small business in Ireland would find our products and contact us for a basic (< $500) order. I certainly never would have thought that it would be a routine transaction. Not anymore.
If we factor in customer service and support, "The more things change, the more they stay the same".....
Chaim Jaroslawicz
www.CalendarWarehouse.com
The 4Ps are a very basic definition of marketing principles. At that level, they do remain relevant. However, given how marketing has transformed from a group function to an all pervasive theme cutting across the organization, the basic framework has changed. For the marketing professional of today, it is no longer about looking at 4Ps (or 6 or 8). The recipe of success starts with connecting the dots - dots being the elements that influence consumer behavior - and then developing non-linear thinking to help understand consumer behavior with respect to continuously changing variables.
Hi Sunil! It's been a long time since my last participation in your topics! I'm always glad to be invited to participate!
Well, let's focus on your proposition!
The 4P's (product, price, place, promotion) is always present in every business, with more (or less) relevance.
Let's take your example.
I really don't know about the situation in India, but I can asure you that, in Brazil, people have been travelling more than ever since the Telecom's privatizations and the rising of the Mobile Services.
I believe (and please, feel free to correct me) that we are mixing marketing and strategical concepts.
When talking about the 4P's, we must think about our product, not the whole company. If we proceed a analisys of the concept, I guess we would see that it keeps it's importance as a marketing tool:
Product - All companies still investing in many design concepts, characterisctics that prooves the differential of the product, marks, specifications, warranty policies, package etc...
Price - Funding, payment terms, medium term, provisioning, discounts etc...
Place - Stores, Distribution Channels, Logistics, Storage etc...
Promotion - Propaganda, Advertising, Public Relationship etc...
Here in Brazil we have a very singular case.
O Boticário is a perfumery company focused on middle-aged Women, at A and B classes (mainly B).
Copenhaghen ia a confectionery, focused on middle-aged Women, at A and B classes (mainly B).
Well, I guess you all know the rest of the history.
The main point is: do you believe they forgot about the 4P's? I guess not, but they compete between them and it's happening with a certain frequency in many markets.
The newcomers phenomenom is not related with marketing... I believe they are related with strategical choices.
Dear Sunhil,
My New Four P's meet your concerns since they are totally customer focused.
1. Not Product (even if you include services) but Performance - Everything that your offer does FOR the customer or client.
Think back to Charles Revson's comment many years ago, "in the factories we make cosmetics, in the stores we sell hope."
2. Not price but Penalty - Everything you require your customer to give up. Price implies a number. I call that the explicit price.
Penalty includes time, aggravation, risk, etc. All the things that economist dismiss with "all things being equal." Think of the last time you did not buy something because the web page was too hard to navigate.
3. Not Place but Process. Place is something I can find on my GPS. Process includes all the activities required to get it to the final consumer of value. I bought a gallon of milk at the 7-11. How many steps and processes did it take to get there and for me to buy it with a debit card. E commerce makes physical Place irrelevant, and the virtual process critical. Pay Pal is not part of place, it is part of Process.
4. Not Promotion (which means to move forward) but "Perception." All marketing communications, advertising, personal selling, web page, voice mail etc. has as its prime function to enhance or reinforce the customer's perception of the offer. If the customer does not know something exists, communications must treat a perception of its existence.
I would add "Partnership" as a fifth P to insure that the marketers think in terms of a win/win transaction.
This vocaulary change will change the way you think about what you are doing as a marketer. Expansion can be found at my article in the Journal of Marketing Education, 1991.
Julian Yudelson, Ph.D.
Associate Professor Marketing, Ret.
Rochester Institute of Technology
On their own, the 4P's have always been irrelevant. You must always remember the 4C's as well; consumer, competition, cost, communication.
Just because, as an example, the "place" is changing (from the shelf of a grocery store, to my online shopping cart, etc.). doesn't mean the fundamentals of marketing have changed.
In your example, I would argue that your marketing mix has indeed become broader, but not different. Price analysis, ROI, etc must still happen, but you must now examine a broader range of competitive influences. No longer would your statement be: all airlines targeting business travellers, but rather, all ways for business professionals to do face-to-face business.
Interesting question!
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