Tuesday, January 24, 2012

B-schools and the 4 P's of Marketing

For Josh... who asked.

Why Do B-Schools Still Teach The Famed 4P's Of Marketing, When Three Are Dead? 

The headline brings much promise for the blog post I linked above, but the post shows the writers' lack of marketing and business knowledge. I certainly agree with the concept that the four P's are some what out-dated. Depending on how they are presented, they can be like a disco leisure suite, but I also believe they are still relevant in today's ever changing marketing world.

Promotion-in the mentioned blog post is equated with advertising-which is wrong. The P 'promotion' does incorporate advertising but it is so much more. All forms of communication with the consumer is under promotion- and that includes social media and all things Internet. Do we need to include things in promotion that perhaps we have excluded before? Yes! Do we need to talk about social media as more than a fad? Yes! Do we need to realize that promotion for many brands is now a collaborative process with consumers creating promotional content-even without contests? Yes! Do we need to teach more extensively about branding and having clear branding strategies across platforms? Yes! The promotional world is different from it was even ten years ago, and what B-schools teach has to change to match these shifts.

Place - according to this author is dead because more and more commerce is moving on-line. Let me go tell Kroger to start closing their doors, and I better hurry to see my last 3D iMax movie while drinking my venti mocha, non-fat, no whip add toffee nut frap from Starbucks. Seriously? All kidding aside, yes, online commerce is growing and continues to grow. Does this mean that brick and mortar stores are going away? Not in most cases, but what it does mean is the increase in complexity of place can be staggering. Just do a google search about Toys R Us's first online holiday experience, and you'll find out that logistics (part of place) is even more important in our current marketplace. It's what Amazon excels at! In my entertainment marketing class, I teach about "conduit" - the delivery of the product to the consumer, and with the increase of on-line commerce there is another channel to be measured and our product may have to take a different form. So, B-schools have got to adapt and help graduates understand how to connect their product or service with the consumer when, where and in what format the consumer wants (just think how many headaches the music industry could've saved if they had actually done this!).

What's next...Price! The author would have us believe that raw market forces will now take hold because of consumers having more access to information. Now, he does have something here - if you are positioning yourself in the market based on price, then yes- the Internet will force the market price on you, but what if you are positioning based on benefits? You aren't just focused on the raw market price you are adding value which can add dollars to that raw price. Otherwise, no diamond engagement rings would be bought at Tiffany's because they certainly don't let raw market prices determine their's. See the stuff about branding under promotion to understand why setting price is still important, plus there is that cool break-even formula we should all know.

This leaves us with the last P, Product. The article states, "The only way you can increase the value of your brand is by increasing the value of your offering." I totally agree but it is short-sighted to not realize that value comes in many forms- including those delivered by the other P's. I have a friend who uses an on-line co-op to get fresh vegetables. He pays more than he would at a grocery store, but he gets the added value of having them delivered to his door as well as being locally sourced when possible. That's "place" in action and the website that communicates what the co-op offers is part of promotion - as is the Groupon they issued (good old fashion sales promotion done with an on-line twist). I'll let you know what I think of the co-op - I bought the Groupon.

In the end, the four P's still are a good starting point but B-schools have to expand and adapt them to the current marketplace. I would argue for the inclusion of a fifth P, "participation," but maybe it's just the collaboration I talked about under promotion. What I do know is the time when a year-old text book is still up-to-date is gone.

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