Marketing can be defined as the means to communicate value to customers or, more formally, as “the science of satisfying consumers’ needs profitably,” according to one of my former Harvard University professors, Nick Nugent. The concept of marketing remains the same but the marketing mix, or combination of factors that influence the delivery of value, has evolved considerably.
The traditional marketing mix, built around the 4Ps — product, price, place and promotion — arguably discounts the breadth and complexity of current-day marketing. Therefore, two Ps were added to the mix — process and people — which respond to crucial changes in customer service, e-commerce and social media.
The Traditional 4Ps
Product encompasses the variety, design, packaging, quality, features and positioning of a product or service. The emphasis on this “P” is constantly growing as consumers are becoming more knowledgeable about, and critical of, their purchases. Also, there is added stress on solutions in response to more complex market expectations. For example, return policies and warranties are becoming extremely important at a time when your competitors are a Google search away. People’s access to more immediate communication and increasing expectations are driving companies to more frequent releases of the “next best thing.
Simply put, price refers to how much a customer is willing to pay for a product or service. Pricing strategies are becoming more dynamic to keep up with highly educated consumers. For instance, discounting strategies could be permanently anchored in the minds of consumers, who may refuse to pay retail prices later.
The advancement in technology has allowed manufacturers to cut out retailers and sell directly to consumers. And the integration of AR capabilities into the iPhone is only opening more possibilities for direct manufacturers to sell directly to consumers by allowing them to visualize merchandise in ways that replace the need to tangibly feel the product before you buy it. All of these changes underscore the need to clearly communicate value based on the positioning chosen for the product.
Place refers to product accessibility to potential customers. Choosing retailers like Amazon could enhance coverage when you’re trying to turn your brand into a household name, but limiting coverage could demonstrate scarcity, as in the extreme case of diamonds, where controlled scarcity drives up prices. The key factor is understanding a target audience, which will help a marketing specialist position the product in the channel that is most accessible to potential buyers.
This “P” recently evolved with the introduction of e-commerce. Deciding whether or not to sell a product on a anomaly detection because it automatically flags any data points that are outside of what the expected outcome was.
How do website could significantly affect your relationship with distributors. Placing a product on Amazon is a great way to gain awareness toward a product, and it can also act as a tool to ensure credibility due to trusted reviews.
Promotion is the most visible “P,” as it includes advertising, sales promotions and PR efforts. Though understanding your integrated marketing communications (IMC) and your place in the marketing funnel is more applicable than ever, media has evolved, and it’s important to incorporate the views of those who are most familiar with the new media mix.
Dr. Kevin Kelly, a colleague of mine and professor at BYU, stated: “Intersecting with the consumer where they live, on their devices, and capturing their attention with meaningful and motivating content has changed the way we approach promotions. Students understand this even better than I do because they are digital natives. So, when I ask my students in our student-run advertising lab to look to platforms like Instagram, Facebook and Twitter to solve our clients’ advertising challenges, they instinctively know what to do.”
In addition to these traditional elements, new developments in the marketplace have added two vital layers for marketers to integrate into the marketing mix: process and people.
Automation, systems and processes now play a critical role in the marketing mix. They reduce cost while also playing an integral role in achieving customer satisfaction and measuring results. There is a strong argument, as per this article by Tim Worstall, that Walmart and Amazon’s successes are very much attributed to their processes and logistics.
Worstall claims that the “fierce focus on efficiency and cost has meant that the company can continue to offer lower prices than its rivals.” Focusing on processes means channeling discipline to ensure that marketing concepts are playing an integral role in all marketing practices. This is accomplished by utilizing insights to create win-win relationships with suppliers and partners to increase efficiency and drive down cost and by turning data delivered into recommendations that steer production toward consumer-driven goods and services that meet consumers’ needs.
Companies need to hire and train the right people to provide superior and consistent customer service. Employees need to be trained on customer habits and behaviors that humanize consumers using customer personas. The primary messaging and competitive advantage is also important to communicate in order to ensure that the voice of the company stands united.
On the importance of finding the right people, Phillip Nelsen, assistant professor at SLCC and a colleague of mine, noted: “Steve Jobs perfectly encapsulated the correct hiring mindset when he noted that rather than hiring people and telling them what to do, we should instead hire smart people so they can tell us what to do. A diverse, goal-oriented and motivated workforce is the scarcest and most important advantage a company can have. Companies cannot afford to underestimate the value of company-minded team members.”
Theories of seven or eight Ps also ring true to certain applications. Other marketers argue that the original mix is still as applicable as it ever was. Marketing-mix components can be viewed as elements that make up a car. In the 1960s, when the marketing mix debuted, all cars had wheels, an engine, etc. In today’s market, a fuel injector is considered a necessity.
Purists may favor basic car parts, while racers may strip out the radio to conserve weight. Similarly, this model can be adapted to strategies and offered as a generic platform to be tailored to meet specific products or services.
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