Since the 1960s, business schools across the world have been pushing the principles of the “4 P’s of Marketing”: product, placement, promotion and price. Fifty-six years later, the digital revolution has greatly changed the scope and importance of this age-old methodology. A HBR study found a great disconnect between the hard “truths” of the 4Ps vs what customers really want. Below are tips for savvy marketing professionals in 2016.
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Price is calculated by the culmination of the product manufacturing process, competitor pricing, and the retailer’s pricing. With the transparency of the internet, consumers are empowered with technology of sites like amazon, google shopping, daily deal sites, and chrome extensions to view the raw costs of the product. Price should now be thought of as value. What value does the customer see in the product?
Before e-commerce this was a valuable strategy for marketing. But now? This is less and less of a factor as more goods move online.
What do Zara, Facebook and Google all have in common? All of them have experienced explosive growth without advertising. Granted, now they do run some advertising campaigns, but initially, they placed their money on creating user value through the product. Social customers are becoming resistant to promotion, ie Groupon, and instead are looking into the value of a product. Millennial fashion favorite Everlane rarely discounts, and instead practices “radical transparency” showcasing the exact cost of the factory, labor and profit associated to each garment. It’s working for them; sources claim that the startup raked in roughly $50 million last year, and that it plans to make twice that in revenue this year.
Possibly the only “P” that has withstood the test of time, product remains the only strategic advantage for a marketer. Google didn’t need marketing because their product was excellent, and while it’s rare to have a product that good, it does place an importance on creating customer-focused solutions. The emotional connection of a user to a product, through great design, branding or company mission matter more to the new age consumer. By producing products closely aligned with what consumers want, they will in turn pledge loyalty.
The new golden rule: