Are the 4 Ps of Marketing Dead?
In every high school, college and university marketing course, they teach us about the “4 P’s of marketing”. It’s been a staple since the early 1960s (thank you Jerome McCarthy) that a marketing campaign could be distilled down to Product, Price, Place, and Promotion.
How has the digital revolution changed this? Or not?
By looking at some leading brands and some key websites, we can quickly see how the marketing world has changed over the past decade.
Some major brands have grown without any promotion. Facebook has grown to 800 million users without any promotion of its own. Fashion retailer Zara has hundreds of stores around the world, and not an ad to be found. Even FoundLocally, has never spent a dollar on advertising*.
Even Google has found it to be more cost effective to invest in people and technological infrastructure instead of “blowing it on a marketing campaign we can’t measure”. They found that a penny spent on campaigns is a penny less spent on creating user value.
But products or services need to get the word out in ways that help them to connect with their consumers on an emotional level and in a cost-effective way. Local or community business will used media that target their specific audience (why pay for an audience you don’t have or can’t serve?). Newspapers, radio, television, directory, and online advertising all help businesses reach their audiences in specific and unique ways. As Marshall McLuhan said (back in 1964), “The medium is the message”, and together they create a n effective communication (if done properly!)
Location of physical premises is now less important as commence has moved online. Many retail chains (Forzani’s, Mark’s) use their website to build in-store traffic by offering free shipping for online orders, if picked up at a nearby retail location.
For some products online shopping is not really viable, like shoes (when’s the last time you tried on just one pair, that both looked good & fit perfectly?) where shipping costs for inevitable returns adds significantly to the cost of business (though US-based Zappo's is the notable exception to this). This is also true for clothing articles & brands you many not be familiar with, where you want to feel the fabric, look at the workmanship, and observe the colours in different light.
For other products, physical proximity is key. You may not want to walk more than a block for a coffee (which is why Starbucks and Tim’s seem to have a shop on every block), or why chain retailers have shops in every mall in the city. Location doesn’t guarantee they are where consumers shop, but it ensures they are in the “consider” group where customers will be shopping.
There's a reason why FoundLocally has focused on local search since its inception: to help people find a store or service in their community or neighbourhood.
With online tools like eBay (for retail goods), and price comparison sites like TripAdvisor (for travel), Pricegrabber.com, Bizrate.com, and Google/Shopper its easier for consumers to see what things cost at different retailers. And with the Canadian dollar close to par value, against the US dollar, these US-based comparison engines give a pretty good indication of what prices should be, whether you are looking for the cheapest items, something mid-range (like a typical mall or Main Street shop might sell) or at the luxury end of the spectrum.
It has become more difficult for a manufacturer or retailer to get away with “market imperfections” where they can increase margins by charging more than competitors for a product. Notice the consumer complaints when US-based chain Express opened its first Canadian store in Toronto and tried charging 20-30% more than in their US stores or online catalogue
It seems that the best strategy left is to develop, manufacture, and/or provide the best product. Making it easy to use, and giving it elegant design is what made the iPod and then the iPhone such successful products in the very crowded MP3 player and cell phone / smart phone world. Apple found that reducing moving parts not only dramatically cut down manufacturing costs (and the retail price) but also reduced mechanical failures as products age.
Even in a crowded and information-rich marketplace, having a unique product at a competitive price is the best approach to marketing.
Does this mean the 4 P’s are no longer relevant? While some indications are that they are less so, many consumers have specific needs. And in these economic times, they feel their needs – and all their needs – must be met before they part with their hard-earned consumer dollar.
Because markets can be segmented better and more efficiently using technology, it opens up new opportunities for businesses to vary their use of the “4 Ps” to better meet the needs of each of their customers.