In 1960, E. Jerome McCarthy conceived the well-known marketing framework – the 4Ps: Product, Place, Price, Promotion. In the era of consumer packaged goods and print-broadcast media the four Ps framework provided an elegantly simple model for building a marketing strategy. Fifty-five years later, however, the 4Ps framework can no longer do the heavy lifting. In its place is a new framework, better suited to the realities of a networked market.
Why the 4P framework worked
The 4P framework (graphic below) worked for three reasons
- Its mantra is marketing – Make what you can sell; don’t merely sell what you can make.
- It embraced the true notion of the value proposition – not the fifty-words-or-less pithy summary that value proposition workshops focus upon, but the nature of how a buyer perceives value: attributes of an offering; its price and terms; where, when and how it is made available; and the complex – and expensive – methods by which it is made known, its image cemented, and its value conveyed to target buyers.
- Memorable frameworks have no more than 7 components – the maximum that humans deal well with.
It’s a simple model for a marketing strategy: five controllable components – a target market(s), and the mix of the 4Ps to address it – and an operating context of six uncontrollable factors.
Why the 4P framework doesn’t work today
The internet and mobile devices are the new normal:
- Promotion is no longer the purview of big media and salespeople. The task of product communications has shifted from salespeople to online-savvy buyers: specs, competitive alternatives, references and buyer ratings are available for the asking. Seller-buyer interaction is now a given, not an exception. It is real-time and visible to all, having evolved into Interaction, Communication and Engagement.
- Service and brand reputation are uncompromising table stakes. For service, look no further than Yelp and Amazon ratings. The swift response of Amazon, Wal-mart, EBay and others to remove confederate flag merchandise in response to the church shootings in South Carolina attests to the power of brand.
- “Place” is no longer bricks-and-mortar, and mail-order. Desktops and mobile devices are where and how we buy, and how we consume value, e.g. Netflix. The reality is Physical and Online distribution.
A new marketing model
A contemporary view of marketing – not just what the marketing department does, but how the firm aligns with buyers – is built on one theme: value.
Whereas fifty years ago marketing strategy could be constructed on a foundation of four tactical components, the work of crafting suitable strategies today demands seven: the “7 Ts” of marketing strategy:
- Product: the offering itself, be it shoes or user data from a social site.
- Service: the expectation of near-continuous availability of use
- Brand: reputation, and the solemn promise of adherence to its values
- Interaction, Communication and Engagement (ICE): the means by which buyers become aware, learn, evaluate, contribute and shape the nature – and value – of the offering. (Communication for short)
- Physical and Online Distribution (POD): the methods by which the offering reaches buyers and can be consumed. (Distribution for short)
- Price: what is exchanged (usually money) in return for value
- Incentives: tactics that create a new purchase, increase purchase frequency, or lead to a higher price-value purchase
Below are two general examples of combined go-to-market and management frameworks. The “7 Ts” of marketing strategy are shown in green.
This is a go-to-marketing framework developed for a B2B client that relies heavily on the use of personal selling and VARs. Its customers number in the hundreds, with average selling price topping $100K. Note the emphasis on lead generation and physical selling.
This illustration depicts a go-to-market strategy for a B2C firm offering subscription software and devices to tens of thousands of customers, with average selling price under $300. Social media and retail/e-tail merchandising are dominant here.
Limitations of the “4Ps of marketing” have put the classic framework on the back shelf. An expanded view, which extends the 4Ps to a framework of 7 Ts is better suited to planning strategies for an online, interactive and real-time world.