Geonexus

Remember the four Ps from Marketing 101? They include Product, Pricing, Promotion and Placement (or distribution) and are used to describe the strategic position of a product in the marketplace. It’s an idea that arose in the late 1940s and was formalized at the Harvard Business School in the early 1960s.

This view of marketing, as a kind of recipe where marketers developed the right “mix” of the Four Ps, became part of the dogma of marketing. It is still one of the fundamental ideas in marketing textbooks today.

But the idea of the Marketing Mix has some problems. Most of them are a function of the time when the idea was developed.

In the period after World War II, the demand for goods in the U.S. outstripped the ability of manufacturers to supply them.

One cause of this pent up consumer demand was that during the depression in the thirties people had little disposable income.

Then during the forties people were making money, but had no place to spend it. Resources like rubber and aluminum were rationed. The country’s manufacturing capacity was largely devoted to supplies and armament for the war.

After the war companies shifted to producing consumer goods and for the first time in twenty years people could express their pent up demand. The biggest problem marketers faced was how to make the right products in large batches in the most efficient way.

This way of thinking seems quaint in today’s market where, in the U.S. and many other countries, consumers mostly have what they need.

Yet many of us continue to use the outmoded idea of the four Ps - marketing departments are organized around it, sales and marketing are separated into different silos. And it causes problems in the fundamental way these organizations view their roles.

The three problems with the idea of the Marketing Mix and the Four Ps are that:

• it encourages a push mentality
• it distracts the focus away from the customer
• it doesn’t support an integrated process

Push
The Four Ps are a kind of extension of the company’s production. When a company focuses too much on its production, then it tends to make the stuff it knows how to make and it makes it in the most efficient way possible. This causes it to make too much of the wrong thing which forces it to push it products onto the market. It adjusts the Marketing Mix to accommodate the excess by lowering prices, promoting heavily, and giving incentives to the distribution channel to push the unwanted product.

This push mentality leads us to the next problem, lack of focus on the customer.

Customer
You might have noticed that the Four Ps don’t include the customer. The Four Ps is a marketing story told from the point of view of the producer and marketer, not the customer. When a company has a plentiful supply of hungry consumers, it can afford to optimize its efforts on its ability to produce in mass quantities. But when customers start to become more selective, those companies are in real trouble if they don’t respond by focusing less on production and more on customer needs.

Once companies shift their focus from meeting the needs of internal production to meeting the needs of the customer, then they bump into the next problem with the Four Ps, process.

Process
The Four Ps are usually described in terms that give the impression that they are largely independent of each other. But once you start from the point of view of the customer and what the customer needs, it’s clear that the Four Ps have to be closely linked. And the linkage has to start with an understanding that the primary purpose of marketing and sales is to find, win and keep customers. The way to do this consistently is to adopt a process approach that lets you measure and analyze what you do, that lets you analyze cause and effect, and that enables you to constantly improve.