When E. Jerome McCarthy proposed the 4 Ps in 1960, he most likely did not expect them to be one of the most enduring and widespread frameworks in marketing. Nonetheless, his marketing mix has remained a fixture in business schools across the country for over half a century – but change is in the air, and savvy marketers would do well to be on the forefront of what is coming next.
First, a moment of review on what constitutes the 4 Ps.
– Product: The characteristics of what your business offers (whether a product or service) – the features, benefits, quality, and other specifications that make up your company’s offering
– Price: The total cost for consumers to acquire your product
– Place: The distribution channels (indirect or direct) used to reach the market. This could be a store, website, or anywhere else – or in today’s omnichannel environment, all of the above
– Promotion: The marketing communications used to make consumers aware of what you are selling and persuade them to look into your product. This has generally referred to advertising, direct sales, and public relations activities, in other words, “traditional” marketing and sales.
Now, this marketing mix is beginning to show its age, as the customer journey has morphed over the past few decades. In today’s crowded marketplace, successful businesses need to move beyond trying to shout louder than their competitors and focusing on sales alone.
This is where the 4 Es come into play. By modernizing the old marketing mix and focusing on the customer’s needs and wants, companies can create a marketing strategy that drives business exponentially, by making customers experience a connection to them and become brand advocates.
Done right, experiential marketing helps customers feel connected and become loyal brand advocates.
From Product to Experience
Today’s consumers don’t expect just to be sold a product or a service. Luxury retail and aircraft carriers have understood that time ago. This is now expanding to more mainstream areas and has become primary in services. Think of how some car manufacturers welcome customers buying a used car with a VIP pack…
That experience helps them relate to the brand and feel emotional about company or product. An event that offers an exciting or immersive experience with the brand is the perfect opportunity to gain a loyal customer, and a great deal of brand exposure. Even FMCG are driven to that era. Red Bull is famous for doing this well with extreme sports and other events geared around the theme of “Red Bull Gives You Wings.”
From Price to Exchange
Until recently, the price was driven by the production cost of a product or service, by its scarcity, or a prevision on how these two elements could evolve in the future.
Today, boundaries get blurrier every day between the actual cost of a good, the cost of ownership of the same good. Do you see the price of a car advertised anymore?
Yield management has come to an extreme point where users can get services for almost nothing. Free, Freemium, business models based on selling data or ad space.
At the same time, physical products can almost always be found for astronomically low prices, although the quality may be quite questionable.
As customers struggle more and more in this complexity, educating accompanying them becomes critical in the process of driving their purchase decision and show them what they will gain. At the same time, experience and emotional connection are already a critical element of the price shaping.
From Place to Everywhere
As we are entering the era of immediateness, brands need to be able to capture, anticipate and drive customers mood, or will to consume, anywhere at any time. And be able to respond to it on the spot.
Having a physical storefront is no longer enough to be successful. Modern marketing mandates an omnichannel strategy that lets consumers conveniently reach you where they’re at, whether that’s a physical location or online through social media, your website, or other channels.
Besides, brands need to propose a seamless experience to anchor their image and promise into customers mind avoiding dissonance. In particular, customer support and sales are decisive for the delivery of the experience, whatever the channel.
Disney is a reference in that area, with a mobile-responsive website that works hand-in-hand with their mobile app and the park’s Magic Band.
From Promotion to Evangelism
Abundant literature describes the recent changes in customer behavior and how they meet brands. To cut the story short, brands are not the only source of information anymore. Customer networks provide information from multiple sources ranging from blogs, forums, and social networks. The role of promotion is not only to inform and seduce anymore but provide consistent and positive message aligned with brand value and experience.
While traditional advertising still has its place, the way to reach customer has been totally transformed. Brand advocacy and customer evangelists have crucial to provide customers the needed trust and value to engage with the brand. Content marketing has become a must to proactively engage customers to get in contact with brands.
Influence marketing, encouraging happy customers to spread the word about what brands offer, is one of the tools that can help implement this approach. User-generated content (such as the incredible number of GoPro videos recorded, uploaded, and distributed online by GoPro customers) is essentially free advertising, supported by social proof that what the brand offers is worth buying.
Companies shifting from the 4Ps to the 4Es are the ones that will maintain or develop a competitive edge.
At least three challenges are to addressed to implement this transformation successfully.
The technology challenge: Embarking the right technology, IA, Deep Learning, Bots… and organizing the right connections platforms between customers and the organization. This is where powerful CRM tools like Salesforce can help.
The organization challenge: Adapting roles, objectives and communication channels to align all resources towards a seamless experience and customer organization.
The culture challenge: aligning employees with brands values, content, and promise.
How will the 4 Es shape your digital marketing strategy? Contact us to learn more about how we can help with your digital transformation.