Posted by: katpetrou | 26/01/2013

The New 4 Ps of Marketing

4ps2The four Ps of marketing, also known as the producer-oriented model, have been used by marketers around the world for decades.

Defined by marketer Jerome McCarthy, the 4P’s advocates a focus on Product, Price, Promotion and Place.

Recently, though, the growing influence of the Web has made these classic principles look a bit archaic in light of the new relationship that businesses have with customers.

In a day where customers seem to know everything about your business, the old marketing mix that the 4Ps offers is increasingly at odds with how business is done today.First, we need to look at the fundamental problems with the old way of doing things. Then we need to identify a framework that can cover the same fundamentals, but that is more aligned with how business is conducted today.

What’s Wrong with the 4Ps?

According to research published in the Harvard Business Review (HBR), a five-year study involving more than 500 managers and customers (in multiple countries) found that the 4 Ps model undercuts entrepreneurs and marketers in three important ways.

  1. It leads marketing and sales teams to focus too much effort on product technology and quality. Even though these factors are important, researchers stressed that they are not significant differentiators; they are just the cost of entry.
  2. The four Ps underemphasizes the importance of building a convincing case to explain the superior value of the solution being sold (I.e., not enough time is spent educating customers on why the offering is needed).
  3. It distracts businesses from leveraging their advantage as a trusted source of problem solving (businesses today can use information outside of FAQs/tutorials to aid customers and increase customer retention).

What framework should entrepreneurs and marketers look toward instead?According to Eduaro Conrado, Chief Marketing Officer for Motorola and one of the authors of the HBR study, business owners should look to the S.A.V.E framework as they craft and define their unique offering.

The framework advises focusing on the Solution, Access, Value and Education of a product or service. Below we’ll discuss the important differences it emphasizes over the old four Ps marketing mix.

1. Focus on Solution instead of Product

Customers don’t care about product features or usability if a product fails to solve their problem. It’s not about the features you want your product to have, it’s about the problems that customers need to solve. Solve their problem better than anyone else and you’ll end up with a product your customers can’t live without.” Ruben Gamez

Too often, businesses get too caught up in the features, functions and technological superiority of their product over the competition.

The harsh reality is that none of that matters to customers because all they care about is solving their problems.

If your products’ features help a customer solve their problems then they will care, but if you’re building a product or service based on features and not based on customer needs, you’re working backwards.

2. Focus on Access instead of Place

In an age where many businesses operate around always-on, high speed Internet access, “place” is irrelevant. When you can dip into almost the entirety of the world’s knowledge from the phone in your pocket, you’re always able to research, buy and advocate. It’s not about Place any longer. Now, it’s about Access. What can a brand give me at this precise moment that I want or need? That’s the bar companies now have to clear, and it’s not easy.” Jay Baer

The key here is not to disseminate your “home base” (your store or website), but rather to create a cross-channel presence that considers a customers’ entire purchase journey, not just where they seal the deal.

This idea deals with product promotion, but also goes far beyond it; for example, Help Scout’s presence on Twitter has as much to do with providing great customer service through fast answers as is has to do with promoting our articles and resources.

Customers want your business to be accessible. They want to know that your support will have their backs. To achieve this, they need to see you engaging with other customers to get a sense that you’ll be there should something go wrong.

  1. How available is your team to customers?
  2. How attentive are you to customer feedback?
  3. How good is your company’s support?

3. Focus on Value instead of Price

We occasionally have customers tell us that our product is too expensive, and they’re sure that they can find a similar service on the web for free… but to us, price isn’t just a number, it’s a strong connotation of brand and value. When we hear customers say that our product is too expensive, before wondering if we should lower the price we are more concerned with whether we should increase our product’s value. That orientation is vital in directing the drive toward improving a product without competing against others on bottom-dollar prices.” Walter Chen

Do customers care about your price in relation to your production costs, profit margins and competitor’s prices?

We can answer this for you—they don’t care.

Sure, customers have concerns about price, but that comes after their concerns about value. Are you clearly articulating the benefits of your offering relative to your prices?

If you’re not, you should be. Research from Stanford University shows that comparative pricing is often a horrible way to frame your prices, and numerous additional studies on “context pricing” reveal that perception of value is far more important to customers when accepting higher price tags.

4. Focus on Education instead of Promotion

One of the old truths of marketing is the “law of 7″. Someone needs to see or interact with your brand for 7 times until they eventually sign up or buy what you have to offer. Over the past 2 years since we started to heavily focus on content marketing for Buffer, I genuinely believe that we have brought that number down. Simply because providing someone with free, and useful information, creates a much stronger bond and connection than any banner ad or press mention ever could.” Leo Widrich

The old methods of marketing were strictly limited to interruption marketing, but the entrepreneur of today has the opportunity to be involved with customers’ needs at each point in the evaluation and purchase cycle.

For a relevant example, you need look no further than the article you’re reading right now; in fact, the entirety of our blog is focused on customers’ needs and not our own.

We write about relevant content that our customers want to read, such as building customer loyalty programs that actually stick, how to create “frugal WOWs” for small businesses on a budget, and the specific tactics we used to increase our email response times by 340 percent.

This attraction-based marketing is essential for any business with an online presence. A medium such as the Internet that provides an instant escape route (E.g., clicking the back button) does not kindly lend itself to the traditional interruption techniques.

The S.A.V.E. framework allows businesses to keep this mindset at the forefront of their operations, acting as the centerpiece for this new solution-selling strategy.

The businesses who choose to ignore these warnings do so at their own peril!

 

 

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