Ginger Conlon over at Think Customers: The 1 to 1 Blog is writing about whether the 4Ps – product, price, place & promotion – are still relevant in today’s networked age.
She asks a variety of pundits – including CRMGuru’s own Paul Greenberg – to voice their opinions. As you can expect, she receives a variety of ansers ranging from ‘everything is different’ to ‘not much really changes’.
When I look away from the hype around customer-centricity and Web2.0, to the reality of most of my consulting clients today, I have to admit I don’t see a great deal of change. Particularly in those buusineses who have a lot of data and who use it extensively to target suctsomers with direct marketing.
So how are the 4Ps changing:
Products are still the basis of most businesses’ go to market strategy. But this has always been the case in countries with free markets; where sellers and buyers come together to trade. Despite all the talk of customer co-creation, most businesses still produce products based upon their own capabilities rather than on customers’ needs, wants & requirements. Is this likely to change? Sure, but don’t expect most industries to change their tried and tested product-orientation any time soon.
Price is as important as ever, particularly for premium products. It is also one of the 4Ps that is under the most pressure. Internet price comparison engines Internet price comparison engines now let customers see where they can buy the products they want at the cheapest price and often provide a direct link to the seller’s website too. And even for those products which are not bought over the Internet, they provide a valuable guide to product quality and price which customers use to bargain for a better deal. Is this likely to change? It already has and the changes haven’t finished. John Hagel’s 1999 book Net Worth provided the blueprint for ‘infomediary-based’ markets which may finally be coming of age.
Place is more difficult. The proliferation of media and sales channels has made controlling place much more difficult. Just ask automobile manufacturers, whose products can now be bought openly on-line despite their continuous attenpts to control distribution. Or ask luxury goods manufactuers who tried to stop UK supermarkets selling grey imports, won in the European courts, only for the supermarkets to ignore the court ruling. Is this likely to change? Whilst most products are sold through bricks and morter outlets, don’t expect much change. But as the proportion of products sold on-line increases, expect manufacturers and their distribuutors to lose more control to intermediaries and then to customers themselves.
Promotion is the 4p that has changed the least and yet the most, all at the same time. How is that possible? The business-driven side of promotion hasn’t changed all that much. Irrespective of which channels or media are used, it is still all about marketing command & control. The zenith of this is the 30-second Superbowl ad which costs millions for the spot plus millions more for through-the-line integrated marketing execution. What is changing is the rise of the customer, in particular the rise of Internet-enabled customer social networks as honest brokers. Websites like Epinions encourage customers to post honest reviews of products on line for all to see. And the exponential gowth of customer blogs is only adding to the fire. Businesses and their captive ad agencies seem reluctant to recognise that we are social animals and that we will talk to others about the products we love, and particularly, about the products we love to hate. Is this likely to change? Again, it already has and the changes haven’t finished.
So are the 4Ps doomed? I don’t think so. Other acronyms may come and go as challengers, but the new and improved 4Ps are not going to go away anytime soon. The new and improved 4Ps are still the undisputed champion in real business.
What do you think?
Add your own comments and let’s get CRMGuru2.0 buzzing.
Graham Hill
Graham as usual I like the thrust of your observations.
the 4P’s are still important, but as you say the ‘place’ aspect has become more difficult, as customers migrate to different preferred channels or networks.
However, as many have been banging on about, the entire customer experience – soup to nuts is also important.
Where things get really interesting is in the area of ‘value’.
A simplistic view of the product – features/availability/price can lead to firms boxing themselves in to commodity markets, whereas a wider-angled view of value based on insights into the customer’s context, or as you have argued before, in collaboration with the customer, is likely to yield greater customer happiness with your product/experience as well as more profitable revenue. So we need a ‘V’.
Jeremy Cox