The New 4 P’s of Marketing
Here’s how to look at the classic 4 P’s of marketing through the lens of today’s world:
Product = Value
Product was once believed to be something functional. Products or services offered some sort of utility to a customer. And, that is true, but the function of a product alone does not induce someone to buy it over another product that offers the same function.
So, decades ago marketers then began promoting features and benefits. A feature is a characteristic of a product and the benefit is the advantage that feature provides the user. This was a way to differentiate one product offering from a competitor with similar functionality. What a giant leap forward for marketers! This concept took us from offering products customers needed to products customers wanted.
Today, marketers should view their product as something that offers perceived value to their specific target customers. Why? Because the value of a product is not determined by the sum of its features and benefits, but rather the key attribute (or decision factor) that your customer finds most appealing in making that purchase decision.
We all value different things, so the key is determining which attribute your product should “own.” This goes a step beyond providing a list of features and benefits.
There are typically several factors that go into a purchase decision. Here’s an example using the automotive industry. All cars provide the function of transportation (that’s a given), but we choose a car that’s “right” for us based on other decision factors: speed, safety, fuel economy, reliability, work utility and even prestige. There are benefits to all of those attributes, but the characteristic we value most will determine which car we buy. That influential characteristic is our key decision factor.
Not everyone will value the same decision factor. Value is in the eye of the beholder. The important thing to remember is you cannot be all things to all people, so focus on what your target customer values. I’m always amazed at how many businesses cast the widest net possible and waste their precious resources chasing after low value customers.
The question is which decision factor does your target market value the most? Are you the best at any particular attribute?
Price = Worth
How much is that attribute or key decision factor worth to the people who want it most? Price is simply a reflection of perceived value. We are typically willing to pay a premium for anything ending in “est”: biggest, fastest, strongest, smartest, prettiest, etc. That’s why is it important to be the best at the attribute your customer values the most.
What is the safest stroller worth to a new mother? What is the fastest engine worth to a sports car enthusiast? What are freshest ingredients worth to a foodie? On the other hand, the stroller has less value with the chef (unless she happens to be a mother) and the new mother has no use for the fastest car.
Price obviously has a direct relationship with value, so choose your key value attribute carefully.
Warning: Never use price as your key value attribute. That is what Seth Godin calls the race to the bottom and there are no winners.
Place of Distribution = Customer Experience
Where your product or service is sold or distributed is still an important factor in brand management, but let’s shift our focus to the customer. How does your customer experience your brand? Remember, every touch point of your brand influences the perception of your brand—from your website to social media to the “hold music” played on your customer service line... everything communicates. Does your customer experience reflect your brand positioning?
Customer experience is every bit as important as value and price. These three P’s must always align. When your customer experience fails to meet the expectations set by your value and price your brand components are incongruent. That incongruency is the equivalent of a lie. And, everyone hates a liar.
Promotion = Connection
The first three P’s, Product (Value), Price (Worth) and Place (Customer Experience), combine to form your brand positioning. Only after your brand position has been set should you be concerned with the fourth P, Promotion.
Promotion is no longer relegated to advertising and public relations; it is the connection you have with your target customer. Do you speak my language? Do we share the same values? Where do we prefer to connect?
Today’s consumer is informed. She can tell a phony from a mile away. This is why it is important to nail down the first three P’s before spending time and resources connecting. When you understand your customer, what she values and the experience she desires, it becomes easy to deliver on those expectations.
I will take a deeper dive into each of these “new” P’s in future posts. But for now, I’d love to read your thoughts on the four P’s of marketing in 2016.
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