They say 3 of the 4Ps of Marketing are Dead
Jens Martin Skibsted and Rasmus Bech Hansen claims, at Fast Co. Design, that 3 of the 4Ps of Marketing (Pricing, Promotion and Place or Distribution) are dead. It’s now a 1P Marketing world where everything should revolve around the Product.
That’s a great observation, if you are just selling one product, or only one product at a time.
For those that are uninitiated, the 4Ps of Marketing (also called the Marketing Mix) is a basic cornerstone of all Marketing activity and used to determine how a product or service can appeal to a customer.
Skibsted claims that the digital revolution made the following 3Ps obsolete, and wonders why Business schools still teaches this approach in their MBA courses. He says:
Promotion: is dead because the internet allows for businesses not to spend in advertising.
Place: is dead because businesses are all moving online.
Price: is dead because internet aggregators allow for market forces to decide on the price they want to pay.
Can you see what is wrong with this Fast Co. Design article?
While I do agree that the digital revolution has changes the way we do things, it has not killed the 3Ps as described above. In my humble opinion, the digital revolution has made marketing even more relevant and complex.
Promotion has not expanded to include, electronic direct mailers, viral marketing, blogs and social media channels such as Facebook or Twitter. Word of mouth has never been stronger. Even though online marketing has a smaller expenditure compared to traditional advertising, it does not and should not mean it is less of an importance.
Going online is a Place, though granted it is a virtual Place. For sure setting up an online presence is much cheaper than a bricks-and-mortar location, but it still requires a serious plan. Now, your competition is not the shop 3 doors down; it’s the rest of the world. Launching a site online and expecting people to come is a mistake many failed businesses make. So how else to you get people to come? By Marketing! This is particularly important if your business is 100% online.
Finally, Pricing is a humongous pain as now you have multiple channels to your customer. This means if you sell it for $2 more in one country and less in another, people will just buy it from that other country. Not only that, what about multiple online shops with different commission structure? Going online allows for shoppers to easily compare prices on aggregators like Amazon, which obviously leads to a Price race to the bottom.
It is not going to get easier. The digital revolution is going to make Marketing harder. Therefore I’m a little surprise that Skibsted, the founder of famed bicycle company Biomega, could come to this conclusion.
While I disagree with most of his article, I do agree that the digital revolution has made the last P of marketing, the Product, the most important of the 4Ps. It is such an important activity that it probably overshadowed the importance of the other 3Ps, causing Skibsted to ignore them.
It is true that at the end of the day everything will boil down to meaningful product quality, as good marketing will not sell a crap Product. But I would not say that the other 3Ps are dead.
I like to close this article by sharing with you a 5th P, which is something my Marketing professor never failed to remind us, and that is People. Puts everything in context no?