In the “old days”, back when I did my MBA, one of the key models of marketing was the “The four Ps“; Product, Price, Placement and Promotion. The theory wasn’t new then, it was developed by Professor Neil Borden at Harvard Business School in the early 60s.
I picked up an article via twitter that theorised that these four principles have changed due to the transformation of business by the internet. According to the writer the four Ps have been changed into; traffic, conversion, growth and content.
Can you spot what’s missing?
Internet marketing is different, but you can have the best marketing campaign in the world and if the product is not clear, and the price is not stated you’ve got no sales. So your campaign is a waste of time. Conversion and growth are a result of your campaign – not part of it. I don’t see this model replacing the tradition one any time soon.
Let’s look at how the old model has changed in the online world.
What are you selling? What customer need does it meet? What service or support to you provide?
In the online world customers still need to know what they’re getting for their money. The difference is that they have more access to information. It’s now easier for customers to make comparisons across a product category. It’s also easier for businesses to provide the information, and it may be that customers need a little extra information when they can’t see the product. Check the amount of information provided per book on Amazon.com, not only are all the book details available, you can also find the shipping weight, book reviews, customer ratings. For many books you can read an except.
If you search the internet for product reviews you’ll find websites discussing and reviewing travel destinations and providers, camera equipment and movies. Customer ratings are a key part of ebay’s success.
This doesn’t stop at physical products, in the offline world services are also considered part of the product offering, think of how a negative check-in experience can colour your opinion of a hotel. Online it’s much the same, one of the reasons this is a WordPress blog is because when I used Blogger I could not get support or answers to questions.
What will customers pay for your product or service?
Traditionally considerations about pricing strategy included wholesale pricing, recommended retail pricing, bundling and discounting.
This hasn’t changed. In fact with comparison shopping so easy online, and so many sales made online, your pricing strategy just got more complicated.
If you’re offering a discount through one reseller you’ll need to offer it through all. If you’re offering preferential terms of sale through one channel the information will be online.
In the online world the customer has close to “perfect” information about pricing. Any pricing strategy you have in place needs to be transparent. It also needs to be explicit, at least for me, if you make me register or email you or click multiple times to find the price I’ll shop elsewhere.
Where can people see your product? Where can they buy it? How can they get it?
This is also called placement sometimes, or distribution.
This has changed, where once sales were strictly local and only large companies could offer products globally.
You can now buy online
- Spanish books,
- finest quality Iberian Ham (within EU),
- embroidery supplies,
- search for first edition books,
- bespoke tailored menswear.
So geographic place has become less important, but your ‘place’ on the internet has become incredibly important, as this will affect your traffic, and traffic will be a big driver of conversions, which equals sales (either in terms of someone reading your article or buying your product/service). Most of the items listed above are in the top 10 of a google search. But if you have a little shop, and a small marketing budget it’s going to be difficult to get into that top ten search. You can play with search terms and purchase keywords but for the most obvious keywords you’re likely to be outbid.
Some of this can be countered by more traditional marketing and some is countered by word of mouth – the Spanish books website is reasonably well known among Spanish speakers, and some is countered by platforms where sellers can profile their work. My favourite of these is Etsy, an online platform full of wonderful creations by talented people.
The rules of “Place” have definitely changed with the online world – but its importance hasn’t.
Where will the customer/potential customer hear about you? What will they hear? Who will they hear it from?
This is the area that most people think of when they think of marketing and it includes advertising, sales promotions, publicity and branding.
This might be the area of the biggest change in the online world, particularly as advertising expenditure shifts from offline to online. Promotion also includes activities in social media from blogging to twitter to face book – companies are moving in this direction.
The most effective promotions will be integrated, so the message the consumer gets offline, online and on social media is consistent. It’s easier than it sounds, it requires a strong understanding of your brand personality – a fancy way of saying you need to know what you stand for.
You also need to have a strategy for all aspects of your online marketing from your banner advertising, your SEO, your keyword purchases to any personalities you want to use on social media tools.
If reading this you think that some of these aspects aren’t really marketing, you’re right in that product design, and distribution aren’t usually decided by the marketing department alone. But failure to integrate all aspects of the business leads to that old cartoon with the child’s swing.
So the 4Ps still apply in the online world, they just apply differently.