The omni-chanannel, real-time, everything’s available environment we are currently living in has changed the marketing fundamentals quite radically. The world is no longer the same place for which The marketer E. Jerome McCarthy proposed a four Ps classification in 1960, which has since been used by marketers throughout the world. This age requires us to re-design them. Here’s my attempt. Please comment and let’s make them even better:
- Position – in customer’s mind
- Performance – the user experience
- Proximity – How close the brand is to it’s customers, Customer intimacy
- Price – Price is no longer a fixed figure
- Presence – instead of Place
- Perceived product
In this time and age there is a lot of everything. Customer’s instinctively make their lives easier by using their mental shortcuts, heuristics, in order to make sense of the surrounding wealth of messages and impulses. The position a brand holds in the customer’s mind connects it to certain contexts, values, benefits and purposes. This is why for example brand extensions are not necessary a certain success, as the position the brand has in customer’s mind only consist of certain learned connections. Because of these reasons I would actually think Brand as a part of position in the customer’s mind.
When customer’s do buy a product or service they have certain expectations for what they bought. Depending on how well does the brand meet those expectations influence the customer’s personal experience and view on the brands performance. Value for money is a very important measure for a brand and shared experiences influence the brand’s Net promoter score directly. In my opinion performance has to do with the entire customer relationship life cycle across all events related to the brand.
Proximity is a synonym for distance. In order to create trust and relationship with customers, brands need to get up, close and personal with their customers. There should be as little distance as possible. At best, you can talk about customer intimacy. I would include PEOPLE in this category. Person-to-person communications are still extremely important in many businesses and particularly important in case the customer has support needs or wants a reclamation handled. People are the very core of trust experience and in many businesses customers imprint on persons serving them. In such cases the brand experience and loyalty has it’s foundation on personal relationship: it’s not about B2B or B2C, it’s about Human-to-Human
Price used to be a rather fixed figure. In this age price has become a rather elusive measure. The new approaches to pricing are about yielding models and price variety between customer segments. There is one price for me and another to you, although the product and the seller are the same. There is a price for me right now and tomorrow. Online environment has made it possible to democratize offering and make pricing transparent by using aggregators and comparison services that find prices from different sellers and present them in one single view. This kind of approach has democratized the marketplace, because the aggregators only show certain comparable basic functionalities and push the brand further away from the customer. Actually these players like hotels.com, ebookers.com, groupon and those alike them are creating direct relationship with customers and effectively drive prices lower. Smaller players who have less known brands but can offer services and products at lower cost can find customers due to this logic. Price, however is still a very influential component.
I think that presence has replaced place on this list. In the digital era presence equals availability and direct access to buying. Presence is a more flexible concept than place, that is physical. Social media is a method of expanding presence across customer’s peer groups and generating recommendations, participation and coverage in general. Aggregators also scale presence further. Those companies that are present are the most likely options for a customer and expanding presence directly impact sales. Out of sight – out of mind, is the name of the game.
PRODUCT is too often defined by companies as how they see and envision the product. This is naturally flawed/biased and is where many companies make a mistake in the first steps of selling and marketing their product/service. Especially engineer lead organizations that are very product detail focused. In reality this should be PERCEIVED PRODUCT, making an enormous paradigm shift from companies defining a product, to understanding that the PRODUCT is actually only and exactly what we can get the consumer to perceive it to be. This adds the element of communication responsibility and understandability to the 7P’s equation. Most companies think they have the best product, but still fail, because of an enormous perception gap in the definition of the product in their minds and the potential customers minds.Perceived Products is naturally tightly linked to the second P = PERFORMANCE, which is all about (repeatedly) living up to, and exceeding the product perception and quality expectations of the customer (The definition of Perceived Product cam from Jarno Aho, OMD Finland. Thank you Jarno :)
What makes Jarno’s Perceived product as a concept especially important is the fact that customer experience about a product or service is firmly embedded on expectations. When expectations are really high, it is difficult to meet those expectations. On the other hand low expectations are easy to exceed and translate them to endorsements. However, the fact is that perception has major influence
Here’s the Wikipedia’s definition: “All of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, sales organisation and sales promotion.” Another way to approach promotion can be divided in four major categories: 1) Owned media 2) Earned media 3) Partner media and 4) Paid media. An important measures for promotion are Reach and impact to brand awareness, preference, willingness to pay premium and convert sales. In the internet age of overwhelming availability of data, own media has increased it’s capacity to impact sales tremendously. Search engine’s page rank can be improved, own customer data can be leveraged very cost efficiently and the relationship with customers can drive further reach with earned social media and dialogue with customers. In the current online centric customer relationships in which marketing and servicing merge as one single messaging, it’s increasingly difficult to define where the product or service ends and marketing/promotion starts.You could say that the core customer service and customer relationship processes have become promotional activities in the age of open online dialogue (eg. open innovation platforms like My Starbucks Idea, Dell Ideastorm, or IT&software companie’s developer communities eg. Microsoft Developer Network) . Partnering influence reach and presence very effectively too. These reasons have diminished the role of paid mediums and increased promotional capacity and scalability very cost efficiently. Data driven marketing enable paid media’s role as an extension of targeted customer relationship marketing even if the customer has never left her contacts.
These were my 7P’s. What do you think? Does this list offer better food for planning than the original four? How could these be improved? Did I miss something?
Author: Toni Keskinen, Change Catalyst & Executive as a Service
Join FutureCMO Movement LinkedIn Group here