My father was a Professor of Marketing, and my uncle was an international business consultant.
Every Sunday at my grandmother’s dinner table, I would hear them share client stories, discuss strategy and debate their adaptation of “The 5 P’s of Marketing*” – product, price, promotion, place and people. Every company, according to my father, would develop their strategy by mixing these elements to create a differential advantage (i.e., make them different than their competition) in the eyes of the customers in the marketplace.
My grandfather, having left the table after his meal at the start of these discussions, would watch the Pittsburgh Steelers (or the Pirates – depending on the time of year) on a black-and-white television with no sound. Instead of using the television audio, a single ear bud from his pocket radio tuned to KDKA-AM Sports Talk. In his lap, covered in ash from two packs of Marlboro Lights, was the sports section of the Pittsburgh Post-Gazette. This detail will be important later.
This “marketing mix,” as my father taught, was a term coined by Harvard Business School Advertising Professor Neil Borden in 1948*. It focused on what the company had to offer to the consumer. The product – goods or services – refers to all of the features and benefits the company creates. The price included not only the price tag of the product (retail), but also the cost to manufacture. It included the profit margin between the company and resellers (wholesale), and any (sales) discounts needed to maintain a competitive advantage. Promotion included all of the activities needed to make customers aware of goods and services in the marketplace, like packaging, advertising, sales, public relations, etc. The place is where the product is produced, distributed or made available to the consumer. If you’re a retailer, it’s your store, and as my father taught me, included three key elements: location, location and location.
The last “P” was people. Not the people who buy your product, but the people who make your product, sell it and support it in the marketplace. This was the one “P” I always was confused about; how is this not about the people who buy the product?
4 P’s, 7 P’s, 8 P’s – more?
In 1960, another marketing professor, E.J. McCarthy, discarded “people” altogether in his “Basic Marketing: A Managerial Approach,” reducing the mix to only product, price, promotion and place*. Perhaps McCarthy did not discard it as much as he simply did not include it, but I could never find anything that told me one way or the other. Given the 5 P’s which came first, one may assume discarded.
The 4 P’s were later expanded to 7 P’s by Booms and Bitner in 1981*. As services became more prevalent, they added back the “people” who delivered the services, as well as the “process” representing the mechanisms and procedures for delivery. They even took it a step further and threw in “physical evidence” the service had been delivered (proof to the consumer that they got what they paid for).
Later, seven would grow to 8 P’s in 2007 as Lovelock and Wirtz* argued “productivity” was another critical element in “Services Marketing: People, Technology, Strategy.” Since Lovelock and Wirtz focused on the consumer and competitive environments in services marketing, this could explain the addition of “productivity” – a metric for measuring the return on investment (ROI) of their management plan. What were they all seeing in their theories? Everything except the people they were trying to reach.
A Consumer-Oriented Model
In 1990, the same year I started my agency, Bob Lauterborn introduced the “4 C’s” in an Advertising Age article* titled: Four P’s Passe; C-words Takeover. Lauterborn, a Professor of Advertising and a former Director of Marketing Communications, observed the disconnect advertising and marketing has had to work through. He said, “The trouble with our newly minted MBA’s is that they’re well-prepared for a world which no longer exists.”
Lauterborn replaces “product” with “consumer,” suggesting the company study what the consumer “wants and needs,” not what the company produces. Price is replaced with “cost,” as the price to produce the product is only part of the equation the consumer considers when evaluating their purchasing decision. Place has become less relevant than ever and “convenience” more than ever as new methods of communications, payment and delivery better serve the changing lifestyle and consumption of consumers.
Lastly, promotion was replaced with “communication.” In Lauterborn’s view, Promotion is manipulative, while Advertising “creates a dialog” between the company and the consumer “which may be the formula for success as we leave the second millennium.” Consumer, cost, convenience, communication: Lauterborn’s forward thinking would better fit the movement for many companies from mass marketing to niche marketing, selling only what the consumer wants to buy.
The 4 C’s would be viewed by many, including myself, as a common sense consumer-oriented model*, shifting the focus from the company to the consumer.
Mass Communication Creates Marketing Opportunities
History has shown advancements in technology dramatically impact communications. With social media enabling us to “join the conversation,” our messages could be broadcast, aka “multiplied,” by more people to reach more people to create new prospects. That’s the real appeal in this mass communication.
A business could be a source for what their customers wanted and needed by providing the right type of content. They could deliver when their customers wanted and needed it – well placed right in the middle of where they are talking about it. Responses to a broadcasted message could a create conversation that is the basis for a social network, interaction, and, over time, engagement.
Appealing as it sounds, integrated marketing communications does require the marketer to understand each medium’s requirements and its limitations, including the audience’s ability to engage with the message. As my grandfather had demonstrated decades ago by watching television while listening to the radio and reading the paper, consumers integrate media, by their preference, and for their purpose. We can’t tell them how to consume media but we can prepare the media for their consumption.