The 4Ps – Product, Place, Price and Promotion – appear in every marketing textbook, and have even been expanded to 7Ps by some marketers to include People, Process and Physical Evidence. However, the relevance and application of the 4Ps are now being questioned. Respected business publications, like the Harvard Business Review and McKinsey’s Quarterly, are questioning whether the traditional marketing mix needs to be refreshed.
The 4Ps of marketing have served us well. Businesses that got the mix right were often more successful. Creative marketers knew how to manipulate the mix for different customers to achieve different results. But by simply looking at these finite items we run the risk of making our clients and sales teams product and price centric.
Businesses can become more relevant, and in turn develop an opportunity to better differentiate themselves in the market, by expanding the concept associated with each of the core principles of the 4Ps. Here’s a suggested alternate take on the 4P’s – I am sure you will find others if you search.
1. Clearly identify, articulate and provide the best ‘Solution’ to the problem. Understand that solutions deliver, not products. In a B2B market, your customers are rarely looking for just a product or its features. They are looking for a solution to a problem.
Consider what benefits you are delivering. Focus on the solution and not the product. This creates a change of mindset forcing you to look at the sale through your customer’s eyes. What are they trying to address with their purchase? What issues are they facing post-sale that can be addressed by packaging products and services into an integrated solution?
Selling solutions provides an opportunity to differentiate your product from those of the competition and makes it difficult for them to compare, and buy on price alone.
2. Consider the benefits of ‘Awareness’ versus ‘Promotion’. Promotion suggests an advancement of your position and leads you to think about how to encourage a prospect to make a purchase. Marketing activity should lead to a sale and a positive experience for both parties, but how this is done is changing. Your customers could be as far as 70% into the buying cycle before they engage with a sales person. Providing relevant information to the market about your solution at each stage of the buying process positions you best to be favourably engaged.
3. Consider the benefits of ‘Value’ versus ‘Price.’ A sale is never made on price, particularly in B2B sales. Value is defined as the relationship between what you are charging (the cost) and the perceived or expected benefit your customer will receive. Even with commodity items people will pay a premium for better service or quicker delivery – they see this as ‘added value’ for which they are willing to accept a higher cost. If, in the customer’s mind, the price you want to charge does not provide more significant benefits than a similar competitive offering, they are unlikely to choose your product or service. Consider what problem are you solving and what cost did the problem have for the business? Consider what production improvements are you helping deliver and what will be the profit impact of this? The more benefits you can deliver at the same cost, the greater the value.
4. Consider ‘Integration’ versus ‘Place’ – While ‘Place’ traditionally looked at the locations and channels that were most appropriate for a potential customer to make a purchase, you must now consider how the solution will fit into the customer’s business. Consider;
- How will it be packaged?
- How will it be delivered?
- How will it be installed or deployed?
- How will it fit into the value-chain?
Considering the integration as opposed to only the interchange of goods and money, makes you part of their business and greatly improves the opportunity of establishing a long-term relationship.
Marketing is being driven by changes in how customers choose to engage in the sales process. Continuing to force the traditional 4Ps into this new world of sales engagement will mean that businesses that fail to adapt, will in turn fail to prosper.