If you have had minimal contact with marketing, it is likely you have dedicated a portion of time to the Traditional 4 P’s of Marketing — Product, Price, Place, and Promotion.
The Marketing Mix is a set of variables that can be controlled and used to influence consumer responses and represent the four fundamental pillars of any business strategy. However, this set of variables has since evolved, mainly due to technological changes over time. Moreover, it is essential to know that the balance of these elements contributes to a successful brand.
It is increasingly common to receive client inquiries regarding the significance of the Marketing Mix in the digital environment. Those clients who are actively selling a product online are often unfamiliar with the essential tasks of creating a sales and marketing strategy while still in the business plan phase. Similar to this, is it likely these clients have created a business plan without taking into account the new pillars of the marketing mix and how they are applied in digital strategy.
Contrary to what many people think, marketing is a science that goes far beyond the promotion of a product. It is, above all, the result of significant, high-level planning.
Understanding the Origin of the Marketing MIX
The Marketing Mix was created in the late 1940s by Neil H. Borden, a Harvard advertising professor who was inspired by an article by his professional colleague, James Culliton, who describes marketers as “ingredient mixers”.
Despite the idea, ”mixers” became popular among marketing professionals at the time and there was no consensus on the elements that should compose this mix until 1960. Professor and author Edmund Jerome McCarthy proposed the concept of “Marketing Mix 4 Ps” in his book Basic Marketing – A Managerial Approach. What he wanted to explain with the definition of these four great pillars was why some brands are more expensive than others, why some sell more than others, and why some are better promoted than others.
But it was Philip Kotler who later helped spread the concept. The following studies carried out by Kotler disseminated the marketing mix to the whole world, complementing the theory developed by McCarthy and giving a more realistic character. He defined the four pillars as applicable tools in corporate marketing, where he explored the argument in his books. His influence was so important that many people think he was the one who developed the 4 P’s idea.
The Importance of the Marketing Mix for Your Business
To remain competitive, a company must seek a standard of excellence in its products or services, taking into account that customers become increasingly demanding overtime. And for that, companies frequently need to be concerned with meeting ongoing and evolving needs. For Kotler and Armstrong (2010), “the key to achieving the organization’s objectives is to determine the needs and desires of the target consumers and satisfy them more effectively and efficiently than the competitors.”
Why is Starbucks coffee more expensive than competitors and still a worldwide phenomenon? The answer is closely related to the brand identity and ability to make the public aware of its differentials, such as the consumer experience. The real secret of Starbucks is in the interior design, the moody playlist, comfortable furniture, abundance of nearby outlets, free wifi, and the possibility of customizing your drink with a name.
At first, it all sounds quite common and easily copied by other coffee shops. But what really makes this unique in the brand is that it can replicate the same experience with excellence in all its stores around the world. All of this makes the consumer feel part of a tribe that inhabits the coffee shop to work, study, and host meetings. These features, when combined, end up being perceived as a more valuable experience than having coffee at a traditional bakery counter.
The 4 P’s of Marketing are constantly changing and adapting so that both customers and businesses can benefit. When establishing a strategic plan, it is essential to ask to what extent has the company been generating customer satisfaction through the marketing mix? It is important to remember companies adapt to customer needs and interests, and not customers, companies.
The Evolution of the First 4 P’s of Marketing
This pillar serves to understand and define the attributes, differentials, and characteristics of what is offered to satisfy consumer needs or desires. In this case, the product here is not just a tangible asset, but anything that can be provided as a business, having added value and meeting the needs of a specific group of people.
Philip Kloter defined a product as, “something that can be offered to a market for appreciation, acquisition, use or consumption, and that can satisfy a desire or a need” (Kotler & Armstrong, 2010). Meeting consumer needs has become increasingly important in the past decade that many marketers have renamed product P to problem P. After all, a product will be successful when solving customer problems.
If you plan to develop a new product, always keep in mind some questions that you will need to answer for your team or marketing consultant:
- Concept: What is the purpose of this product? How does it meet needs or desires? Does your target audience need what you have to offer?
- Functions: What is required to achieve expectations? How, where, and when will the customer use the product?
- Appearance: What will be its shape, style, size, and color? Are there variations?
- Brand: What is the name? Is it possible to register a domain and profile on social networks without changing the brand name?
- Differentials: How does it differ from other products and services already on the market? What feature, function, or quality does it offer that is unique?
The development of new products, per consumer demand, is an essential part of product P. A strong example of how digital media is changing this development process is the use of crowdsourcing, which is designed to create products in partnership with potential consumers. Further, the data collected through online surveys and statistics is the basis for the development of any new product.
The behaviour of users on the internet is recorded by various software, such as Google Analytics, Facebook Pixel, and MailChimp. The use of digital media facilitates direct research that is often executed via proprietary or third-party platforms such as Google Forms, SurveyMonkey, and Typeform.
An additional vital component in product development is understanding the life cycle before launch. The five different stages assist in characterizing the life cycle of any product or service: Development, Introduction, Growth, Maturity, and Decline. Each one has a specific set of requirements for sales and marketing strategies. Thus, it enables the monitoring of behaviour in the market, interest captured, maintenance of customers, and tactics related to pricing.
When establishing these phases, it is easier to establish necessary actions for effectively promoting a product or service.
Establishing a price point for a product or service is not an easy task, especially when you are launching an innovative product. The pricing can be complicated for those who have never done it, but various mechanisms and strategies can help to facilitate this conclusion.
The correct definition of price, the main factor in generating revenue, can leverage the brand in competitive terms, or position it in the wrong way. It is important to remember that the price is linked not only to the value of the product or service but also in the perception of brand value. Simply put, brands that are more valuable to the customer are more likely to come out on top, even with a higher price point.
When developing a strategic plan, it is essential to ask the client specific questions, which may or may not reflect what the market expects, to land on an idea of where to begin.
- Margin: What is the lowest financial value that the product can have to guarantee a return?
- Perception of Value: What is the highest acceptable value for the market?
- Competition: How is the price of the product compared to competitors? What is the price charged by market leaders?
Identifying the average price charged by competitors is relatively simple. Depending on the market in which you operate, this price survey can be mastered quickly through other channels that sell similar products.
3. Place, Presence
Once the product and its price positioning have been defined clearly, it is necessary to construct a distribution plan – also known as presence, that is, how and where the consumer will be able to purchase. For this stage, it is imperative that consumers have access to the brand to make their purchases, whether in an online or offline environment.
It is beneficial to make a geographical analysis and evaluate the consumption habits of the target audience before defining optimal sales channels. Therefore, offering the product online is often one of the best options for universal access. It is essential to identify where the target audience lives and consumes this type of product, in which establishments they frequent, and what kind of products they explore online.
For the best distribution strategy, there are a few questions that should be answered:
- Consumer Habits: Where is your audience looking for products and services?
- Points of Contact: Which social networks are being used by your ideal buyer? Do these users prefer online shopping?
4. Promotion with Purpose
When entering the promotion stage, it is necessary to develop mechanisms for brand disclosure, both online and offline. The message needs to reach the right people, as it is the best way to make the brand known and for the products to be considered for future use.
In our current climate, it is not enough to emphasize the differentials of a product, and it is necessary to show the consumer the purpose of the brand. Having a purpose aligned with the target audience, which reflects your values and beliefs, health and well-being, environmental sustainability, and family connections, has a significant weight in the purchase decision. However innovative and necessary a particular product may be, there is no more space for those who, for example, offer degrading working conditions for their employees.
To find the purpose of a brand and make it active in daily life, it is important to start by answering those more meaningful questions:
- What is the reason for the brand existence?
- What role does it play in the lives of customers?
- What kind of solutions does it offer?
- How would the world be different without it?
Peter Drucker said:
There will always, one can assume, be a need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available.
The data analysis tools available today enable a more assertive analysis in the identification of the consumer. Before creating a communication plan to promote a product or service, start with the following questions:
- Budget: What investment does the client have available for a communication plan?
- Objective: What is the sales objective? How long does the customer have to achieve this goal?
- Media Plan: What are the best online and offline channels, and what public relations actions can be used to present the product or service?
- Seasonality: Is there a seasonal factor in product sales?
- Competitor Analysis: How do competitors promote their products and services? What insights can we gain from competitor actions?
The magic of Digital Marketing is that it allows you to create, test, measure, and adjust your communication in a matter of hours. This detailed capability is nearly nonexistent when launching a TV campaign or print ad. When a communication plan in the digital environment has taken place, after being tested and validated, a business may then adapt the message to offline media.
In light of COVID-19, the demand for companies offering their services online has had an unprecedented historical explosion.
According to a study conducted in March 2020, 42% of the U.S. population was already shopping online at least once a week (Soper, 2020). This marks a sharp increase of 22% just two years ago. Daily online supermarket sales have also doubled.
It is evident that the current pandemic has created a search for companies that solve the consumer problem online, which will have no return. If companies fail to adapt to this new form of consumption, changing their communication plan to serve this online consumer demand will soon be out of the market.