July 23, 2013

The New 4Ps of Marketing

The New 4Ps of Marketing

The 4Ps of marketing, also known as the producer-oriented model, have been used by marketers around the world for decades.

Defined by marketer Jerome McCarthy, the 4P’s advocates a focus on Product, Price, Promotion and Place.

Recently, though, the growing influence of the Web has made these classic principles look a bit archaic in light of the new relationship that businesses have with customers.

In a day where customers seem to know everything about your business, the old marketing mix that the 4Ps offers is increasingly at odds with how business is done today.

First, we need to look at the fundamental problems with the old way of doing things. Then we need to identify a framework that can cover the same fundamentals, but that is more aligned with how business is conducted today.

Below, we’ll take a deeper look at the juxtaposition of these old and new ideas.

What's Wrong with the 4Ps?

According to research published in the Harvard Business Review, a five-year study involving more than 500 managers and customers (in multiple countries) found that the 4 Ps model undercuts entrepreneurs and marketers in three important ways.

  1. It leads marketing and sales teams to focus too much effort on product technology and quality. Even though these factors are important, researchers stressed that they are not significant differentiators; they are just the cost of entry.
  2. The four Ps underemphasizes the importance of building a convincing case to explain the superior value of the solution being sold (I.e., not enough time is spent educating customers on why the offering is needed).
  3. It distracts businesses from leveraging their advantage as a trusted source of problem solving (businesses today can use information outside of FAQs/tutorials to aid customers and increase customer retention).

If the four Ps is no longer agile enough to work for modern businesses, what framework should entrepreneurs and marketers look toward instead?

According to Eduaro Conrado, Chief Marketing Officer for Motorola and one of the authors of the HBR study, business owners should look to the S.A.V.E framework as they craft and define their unique offering.

The framework advises focusing on the Solution, Access, Value and Education of a product or service. Below we'll discuss the important differences it emphasizes over the old four Ps marketing mix.

1. Focus on Solution instead of Product

Customers don't care about product features or usability if a product fails to solve their problem. It's not about the features you want your product to have, it's about the problems that customers need to solve. Solve their problem better than anyone else and you'll end up with a product your customers can't live without.” Ruben Gamez

Too often, businesses get too caught up in the features, functions and technological superiority of their product over the competition.

The harsh reality is that none of that matters to customers because all they care about is solving their problems.

If your products’ features help a customer solve their problems then they will care, but if you're building a product or service based on features and not based on customer needs, you're working backwards.

Don't let your product developers (or even yourself) get caught up with needless features, product additions and "improvements"—if the great new thing is not going to help your customers out in a serious way, it's nothing more than bloat.

2. Focus on Access instead of Place

In an age where many businesses operate around always-on, high speed Internet access, "place" is irrelevant. When you can dip into almost the entirety of the world's knowledge from the phone in your pocket, you're always able to research, buy and advocate. It's not about Place any longer. Now, it's about Access. What can a brand give me at this precise moment that I want or need? That's the bar companies now have to clear, and it's not easy." Jay Baer

The key here is not to disseminate your "home base" (your store or website), but rather to create a cross-channel presence that considers a customers’ entire purchase journey, not just where they seal the deal.

This idea deals with product promotion, but also goes far beyond it; for example, Help Scout’s presence on Twitter has as much to do with providing great customer service through fast answers as is has to do with promoting our articles and resources.

Customers want your business to be accessible. They want to know that your support will have their backs. To achieve this, they need to see you engaging with other customers to get a sense that you'll be there should something go wrong.

How available is your team to customers?

How attentive are you to customer feedback?

How good is your company's support?

3. Focus on Value instead of Price

We occasionally have customers tell us that our product is too expensive, and they're sure that they can find a similar service on the web for free... but to us, price isn't just a number, it's a strong connotation of brand and value. When we hear customers say that our product is too expensive, before wondering if we should lower the price we are more concerned with whether we should increase our product's value. That orientation is vital in directing the drive toward improving a product without competing against others on bottom-dollar prices." Walter Chen

Do customers care about your price in relation to your production costs, profit margins and competitor's prices?

We can answer this for you—they don't care.

Sure, customers have concerns about price, but that comes after their concerns about value. Are you clearly articulating the benefits of your offering relative to your prices?

If you’re not, you should be. Research from Stanford University shows that comparative pricing is often a horrible way to frame your prices, and numerous additional studies on "context pricing" reveal that perception of value is far more important to customers when accepting higher price tags.

The old four Ps model doesn't fundamentally encourage this need to build a robust case for showing customers why your business is offering a superior value versus the competition, and it places too much emphasis on the literal price of the product (or service).

4. Focus on Education instead of Promotion

One of the old truths of marketing is the "law of 7". Someone needs to see or interact with your brand for 7 times until they eventually sign up or buy what you have to offer. Over the past 2 years since we started to heavily focus on content marketing for Buffer, I genuinely believe that we have brought that number down. Simply because providing someone with free, and useful information, creates a much stronger bond and connection than any banner ad or press mention ever could." Leo Widrich

The old methods of marketing were strictly limited to interruption marketing, but the entrepreneur of today has the opportunity to be involved with customers' needs at each point in the evaluation and purchase cycle.

Businesses today can act as "entreproducers," providing current and potential customers with information relevant to their interests to create a sense of familiarity and trust long before a purchase is even made.

For a relevant example, you need look no further than the article you're reading right now; in fact, the entirety of our blog is focused on customers’ needs and not our own.

We write about relevant content that our customers want to read, such as building customer loyalty programs that actually stick, how to create "frugal WOWs" for small businesses on a budget, and the specific tactics we used to increase our email response times by 340 percent.

This attraction-based marketing is essential for any business with an online presence. A medium such as the Internet that provides an instant escape route (E.g., clicking the back button) does not kindly lend itself to the traditional interruption techniques.

The Final Case for S.A.V.E

Businesses that continue to embrace the outdated 4 Ps model are running a serious risk of involving themselves in a repetitive and increasingly unproductive technological arms race.

The customer of today has far more say in the business-customer relationship, and it's high time for businesses to start embracing frameworks that care more about what the customer wants.

The S.A.V.E. framework allows businesses to keep this mindset at the forefront of their operations, acting as the centerpiece for this new solution-selling strategy.

The businesses who choose to ignore these warnings do so at their own peril!

Your Turn

What do you think of the S.A.V.E model? Is it a needed change from the four Ps way of doing things?

Let us know by leaving a comment!

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Written by Gregory Ciotti Greg ciotti

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32 Comments

Nick Nicholls Jan 24

Nicely recognizes that the 'market' in marketing is, in fact, customers. S.A.V.E. correctly adjust thinking to the customer as our central focus. Well done!

Jon Turino Jan 24

I like this model better than the 4 P's. I've advocated for the 3 M's -- markets, messages and media and this one dovetails better with my views and my new Probiotic Marketing(tm) methods. See http://jonturino.com/guts-probiotic-marketing for more info on that.

jay Jan 24

It's not one or the other. Both Ps and SAVE have a role. Just like books and ereaders. There are plenty of oldtimers over 28 that still are driven by price, watch for sales, and shop locally.... It's evolution. Just like the Sales Funnel becoming a Sales Tunnel where exasperated shoppers just go and buy the damn thing rather than wade thru a mountain of unrelevant email.

Gregory Ciotti Jan 24

@Jay — They study I cited (and the points I made in the article) have to do with mindset and creating an experience that the customer of today expects to see.

I'm not sure where I inferred that nobody cares about sales or shopping locally.

Also, you're talking to the messenger here, you should take your case up with the 3 "oldtimers" who published the research on HBR. :)

Chris Hexton Jan 24

Another excellent post Gregory. The 'VALUE' component is so important, particularly in the early stages of a company's journey.

Nice dropping in those key quotes as well.

Pat Reidy Jan 24

I like how you used a little of your own medicine in your own proposition to the reader .......those of us trying to make a difference to a business with software and services now realsie that we have to sit in the client's seat, feel their pain, undertand how to place realistic options before them, help them see the end-result in value terms and then educate them to move along the path....this is it. Thank you.

Julian Yudelson Jan 24

Interesting concept, virtually identical concept to the article I published in the Journal of Marketing Education in 1999 except that I was able to say the same thing and still keep the Four P's of Performance, Penalty, Process, and Perception.

Julian Yudelson, Assoc. Professor Mktg, RIT Retired.

Bogomil Shopov Jan 25

Agree. Actually we are using this methodology from a year now and I fully agree, we have to evolve as marketeers together with our customers.

//Bogo

Jana Skutkova Jan 25

Very interesting and usefull article. I agree with your concept and think, there are many differencies in the way of doing business today. Thank you for the VALUE.
Jana, marketing communications consultant in Slovakia

Thomas Reimers Jan 25

Great Framework! We´ll directly apply this.... instead of the P's. Valif for every branch, especially for IT/Cloud/Hardware-Services dedicated to consumer needs!

Brian Deeney Jan 25

Hi Gregory

Thanks for sharing this SAVE. You've given me an acronym for something that I have increasingly become aware of. Well laid out easily understood article.

khizar Jan 25

Totally agreed with the points mentioned... Its more about solution, access, value and education...

taha wani Jan 27

I have written a piece on the same topic please do review and help me to better it.

www.scribd.com/doc/122319318/Will-the-SAVE-actually-save

Sergey Gorlov Jan 27

Very useful for education and very clear focused on the main issue of MARKETING IN CHANGE..

Paul L'Acosta Jan 27

I have tried endlessly to find some piece on the Internet that debunks the myths presented by the 4Ps, and your article was a godsend. Thank you for explaining this concept so easily (and for the most important marketing resource on my Evernote!).

Gregory Ciotti Jan 27

@Paul — My pleasure Paul! That's what this post was all about.

Robbin Block Mar 20

As a marketing instructor, I find it rather complicates things to try to redefine the model without enough reason to do so. The 4 P's are never taught in my experience without the 2 C's: customers and competition. This provides a simple model for organizing marketing in a business. The model has never denied the inclusion of the items you mention, and it's a good reminder that there's more to marketing than advertising and promotion, especially for those who are new to the subject. As a model, it's flexible, and can accommodate new ideas that come along, like social media which I consider part of the promotional mix under PR. So the only reason to come up with another acronym (and there have been many) is to simply try to differentiate oneself as a marketer. It may be a better idea to differentiate a product or service offering instead.

Taru Jain May 11

Gregory, I like your S.A.V.E a lot.

See if this helps add a bit more to it:

the 'E' ie Educate still runs the risk of a business/brand preaching to consumers; just like the old world "Promotion' used to

What is you changed the 'E' to Enable? So the brand can now get involved with the consumer, participate with them and help Enable them to do the things they want...

Neha joshi May 20

SAVE sounds convincing but i feel its just twist of word moreover the idea is same as of 4P's of marketing.product is itself a solution,place means at access, right price is value,and promotion is for education only

Linda Lu May 29

Interesting comments, which I'll reframe as "enhancements" to the traditional 4 P's of marketing. With the abundance of white papers and content marketing, I find it helpful to anchor back to frameworks that the broadest audience will understand - including professionals that may remember Marketing 101. It's a personal challenge to add on new acronyms to my arsenal :)

paul kinyua Jun 1

great idea lets be customer focused because nowadays customers have got more choices to make its all about change SAVE is the way to go

Erika Jun 28

I love this article. We have been adjusting Tumblr themes based in a large part on the kinds of questions and feedback we get from users. I think we'll see this kind of consumer-driven innovation more and more in the future. Let's not make things we think people might want. Let's make the things they are asking for and then be there to offer it to them when they are ready to buy. In the meantime, we're educating users on how these products work and where other clients have found success.

Help with Marketing Jul 19

The 4Ps offers is increasingly at odds with how business is done today. We should focus on value instead of Price.

Tim Hill Aug 9

I agree with Robbin Block. The original model is flexible enough to stand the test of time. I read this article just thinking of tooth paste or soap or any run of the mill item that you would find in the grocery store. As a tooth paste marketer the original model works well. The SAVE model becomes redundant especially when you are supposed to "educate" the "solution" and "value" through promotion/advertising. I'm wondering if the SAVE is a more industry based model as opposed to a one-fits-all model because I can see how this works better for IT services than tooth paste. @hillcompany

neil jones Aug 20

This is nothing new. Lauterborn advocated the four Cs - Customer needs and wants (Product); Cost (Price); Convenience (Place); Communication (Promotion); and this is a variation on that. Nothing wrong with it - but the four Ps have already been under question for many years. see 'Marketing pocketbook'.

philip kwame ampah Sep 3

i think the SAVE model adds another dimension to the marketing mix. arguments against the mix may sound cogent if it is looked at from just an angel.

stephen caldwell Sep 4

I think this adds a new dimensio to the rapidly evolving marketplace. This helps address channel dilemmas in emerging markets too. Nice job.

Gerasimos Gerolymatos Sep 25

An excellent approach as it translates current business needs. Nice article and marketing evolution discussion. Has anybody thought about adding an adequate marketing methodology on 'Services' as well?

Anthony Onyemauwa Oct 3

In my opinion, the SAVE model is not too different from the 4Ps. The SAVE model however compels to look at the 4Ps in a new light and from a different perspective. Every product is clearly made with the intention of providing a solution to an existing pain. This is usually a product of market research, consumer research as well as needs assessment. The idea of a physical place for purchase is basically to make the product accessible to the consumer. The internet and digitalization, coupled with post-modernism has only adjusted the consumption pattern, hence the need for emphasis on place as not necessarily a physical location, but a point of access. In Economics, we know that even ostentatious goods have their own market - why? Because, the target consumer's perception of value goes beyond dollars and cents..Therefore, price allotment and acceptance, by producer and consumer respectively is an indicator of value mutually accepted by all parties. Promotion, while it may be interruptive in its delivery, is nonetheless education in its content. The new trends only requires that the delivery be more attractive and less-promotion-like than it used to be. In any case, the SAVE model is a wake-up call to marketing professionals to listen more to the consumer, and be more cross-channel in their interaction with the consumers! Good Stuff!

Robert Hennessey Dec 18

I think Anthony makes a valid comparison between the old 4Ps and new S.A.V.E. approach. In the end if your marketing doesn't centrally focus on the customer nothing else matters. In the age of the Internet everyone has to realize that the hunter is now the hunted.

David “Doc” Searls, wrote an article in 2006 in the LINUX™Journal about what he called the “Intention Economy”. Searls said, “The Intention Economy is about buyers finding sellers, not sellers finding (or "capturing") buyers.” He goes on to say, The Intention Economy grows around buyers, not sellers. It leverages the simple fact that buyers are the first source of money, and that they come ready-made. You don't need advertising to make them.”

We couldn’t agree more.

Though advertisers are not effectively targeting buyers on the Web, buyers can and do indirectly and in some respects directly through quality content marketing that provides information and solutions that will satisfy their needs.

We believe there is a fundamentally better, more productive and efficient B2B advertising approach for the Web. It is not another adaptation of what has been proven ineffective in countless iterations of eyeball attraction, attention or target marketing on the Web.

The ability to turn mind dulling content into information rich environments with ease is just part of a revolution in how the Web can and should be used to deliver the union of potential business partners. A marriage of self-directed discovery where two parties find each other based on an intelligent exchange of customer-centric communication not self-serving boasting, meaningless slogans and exaggerated capabilities.

Learn how you can stop the insanity of targeting your potential customers and invite your sales prospects to discover your company’s ability to solve business-to-business problems in a professional solution selling approach that generates high quality sales leads where your sales prospects ask you to contact them.

Federico Dec 30

MMMhhh... I totally disagree with this framework. IMO it is ok to say that 4P model is quite old and needs to be rejuvenate considering one side of marketing which was totally unknown 40 years ago: Community activation.
But especially the first one, Product still today is crucial and very important to cuddle, either if you have a good product or not... YOu always need a story to support your brand and if you can, this story must be linked to product characteristics.
I totally agree about Value instead of Price, but it is the only think I accept ;-)

Winne Wu Jan 30

Focusing on solution/value/access/education instead of product/price/place/promotion will be more competitive during trans-boundary competitions.

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