In the realm of marketing, there’s a classic concept called the four Ps: product, price, place and promotion. Also known as the “marketing mix,” these key factors make up the necessary components for executing a successful marketing plan.
But in today’s world of rising consumer expectations and hyper-personalization, it’s necessary to add a fifth P if you want to implement a customer-centric business model: people.
A Quick History of the 4 Ps of Marketing
The four Ps were originally developed by professor and author Edmund Jerome McCarthy. Classifying essential marketing activities into four unique categories was revolutionary thinking in the “Mad Men” era. It enabled marketers to gain insight into consumer behaviors and improve best practices by incorporating cutting-edge (at the time, at least) concepts from sociology and psychology into their day-to-day work.
Put simply, in order to be successful and outperform the competition, brands needed to provide desirable products or services, sell them at an appealing price, position them in the right places and promote them using attention-grabbing tactics.
Understanding the 5 Ps of Marketing
Products — either tangible goods or intangible services — must fulfill the needs and/or desires of the buying public. It’s imperative for companies to determine which aspects of their products are important to consumer perception (emotional, physical or mental) and will impact purchase decisions. The unique value proposition of the product and its various benefits — tailored to a targeted customer base, of course — need to be easily understood.
Once the basics of the product offering are established, pricing becomes a priority. Price drives profit alongside supply, demand and overall marketing strategy. It’s important that it’s linked to the perceived value of the product rather than an objective cost. Only by understanding how a customer views a product can brands determine a pricing strategy and clearly differentiate their own products from those of competitors.
The expression “location, location, location” applies to a lot more than real estate. Placement massively influences the success of marketing, especially if consumers aren’t actively staying up to date on your offerings. When people want something, they’re guided by what’s currently available to them — and it’s even better if it’s right in front of them. That makes getting the placement and timing of a marketing campaign right essential.
After you know where and when to promote a product, it’s time to turn ideas into action. Promotion may include digital and traditional advertising — from online ads to radio and television commercials — as well as email & social media marketing, search engine optimization and more. Mapping out the customer journey helps brands zero in on the customer motivations, key events and potential areas of friction inherent in the buyer’s journey. The goal is to optimize each and every touchpoint to maximize return on investment.
Four Ps may have been all well and good in 1960, but, to put it mildly, times have changed. Even back then, it was clear that people — their characteristics, behaviors and preferences — were the through line across the four Ps of marketing. That’s what makes the fifth P the most important. To truly stand out, brands must make customers — and their long-term satisfaction — the heart of everything they do.
Mastering the 5 Ps of Marketing
Digital transformation has made it easier than ever for consumers to pick and choose which brands get their money. It’s also leveled the playing field for upstart businesses that want to take on established companies. The end result is this: It’s a buyer’s market, and shoppers expect brands to go the extra mile in terms of providing relevant, customized customer experiences.
Most marketers agree they now compete mostly on the basis of CX, and 75% of consumers say they’ll spend more money to buy from brands that deliver better customer experiences than the competition. Customer centricity is essential to modern marketing — both for getting shoppers through the door and keeping them coming back for more — and high-quality customer data is what makes it possible.
Luckily for today’s marketers, they have access to a goldmine of customer information that would have been unthinkable when the four Ps of marketing were first introduced.
Whether brands want to boost customer lifetime value, increase speed to market or simply enhance the operational efficiency of their marketing efforts, they need to put people at the center of their strategies. But in order to deliver the customer experiences today’s consumers demand, they need the tools necessary to access, analyze and take action on customer data.