“Business has only two functions – marketing and innovation.” – Milan Kundera
Marketing concept: From 8Ps to 4Ps
The concept of a marketing manager as a “mixer of ingredients” — a chef who pulls together basic components to cook up a profitable dinner – dates back to 1948, when used it to explain how marketing actually worked.
Indeed, any marketing manager faced with a new product or a new challenge will recognise the concept even if they’ve never heard the term. As a manager with some experience, one knows already which points to pay attention to and optimise, and one does it often by instinct.
As good as experience and instinct are, it can nevertheless be helpful to quantify and study the different elements in order to ensure maximum effectiveness. That’s what E. Jerome McCarthy did in 1960, proposing a “four Ps” classification which we still use today. Using the Four Ps, marketing managers can cut through the noise and confusion and identify which elements they must take responsibility for in order to ensure business success.
As with many things invented more than 50 years ago, the 4Ps have also been updated to reflect the needs of modern businesses. Instead of a total focus on products, the new 8Ps are flexible enough to include the role of customer service and adapt to businesses which sell services instead of products [see www.smallbusinesscan.com].
Let us consider the original 4Ps first, and then we will explore the “new 4Ps.”
The core of any marketing effort, the product must be something customers desire. The best marketing in the world will have difficulty selling a product for which their is no demand. Therefore, the marketing manager must understand how the product helps the customer solve a problem or achieve a goal. The marketer must also understand the product’s relationship in the market — how is it superior to the competition?
One of the most helpful tools available at this stage is product testing. There are different types of product testing, as you can see. Placing a product into the hands of the customer allows you to gain insights unavailable any other way. What does the customer believe the product will do for them? How do they see your product in relation to the competition?
Remember that “the customer is always right” — what they believe is what they will use to choose what to buy — and it’s easy to understand how this information is more valuable than anything said in a meeting or boardroom.
Contrary to popular opinion, price is not the main reason customers buy. An inappropriate price can still cost you a great deal of money, though — whether it’s in lost sales or in “money left on the table.”
Therefore, check that prices of products and services are appropriate both to the reality of the market and the cost of delivering them.
Often, changing terms of sale or combining products together may create a negligible effect on the cost while creating a tremendous effect on the perceived value. These “extra bonuses” may cost next to nothing while making your prices instantly far more attractive.
Promotion is the heart of what most people think of as “marketing.” Promotion encompasses every aspect of packaging, advertising, sales methodology, and salespeople. Promotions may use small items such as these or contests to induce the customer to engage with the brand or the product.
Small changes to promotion may produce dramatic changes in your profits. A tiny tweak to your advertising, for example, can easily double your sales.
As you work, keep in mind that no marketing works forever. Stay prepared to develop new approaches, strategies, and offers on an ongoing basis in order to keep ahead of the market’s changing tastes
Where the customer meets the salesperson is the “place.” Direct sales methods put the place in the customer’s home or office, with a salesperson personally going out to talk with the prospect. (Mail order and catalogue marketers replace the salesperson with printed matter.) Other companies use retail establishments or trade shows as their “place.”
In many instances you’ll find that a combination of these methods produces the best results.
Now, let’s look at the “New Four Ps,” which extend this model to service-based businesses and a customer-service oriented world.
Selecting, recruiting, hiring, and retaining the people who will do the job that needs to be done is among the most important parts of business.
As tempting as it is to think of process in terms of your needs, to marketers process is in fact what your customers experience.
The process issues that are most annoying for a customer are the process elements which put the provider’s convenience ahead of the customer’s. Therefore, design your process to maximise the customer’s enjoyment throughout.
7. Physical evidence
All the visible and tangible traces of your business that a customer encounters prior to buying are the physical evidence. Advertising, signage, your reception area, your corporate brochure, even staff clothing are part of the physical evidence of your business.
As with process, this is less about your internal productivity than your ability to deliver to your customers. Productivity in this regard is always combined with quality – you supply the best quality every time.
The 8 Ps (or sometimes 5 Ps are your “marketing mix.” Each element must be consistent with the other. Make your pricing match your perceived product quality and your packaging, just as you ensure your people deliver service in keeping with your price.