teachthe4ps.com - For instructors of marketing.

Over at his Effective Marketer blog, Daniel Kuperman offers a nice summary overview of “Unleashing the Power of Marketing” (an HBR article from last October).  His post, titled “Reinventing Marketing at GE” (July 7, 2011) provides a nice case study example that could be used at one of a couple different areas in the introductory marketing course — with strategy planning, business marketing, or implementation.  In chapter 3 in both Basic Marketing and Essentials of Marketing we use the GE ecomagination campaign as an extended example of sustainability.  I also posted this at Learn the 4 Ps – as Daniel neatly summarizes key marketing roles, some of which our students need to recognize and master to be successful in the long-run.

Yesterday, David Meerman Scott wrote a post at his blog Web Ink Now titled “Why the 4 Ps of marketing do not work on the web” (July 20, 2011).  David is a great writer and speaker.  His books and blog posts have influenced our books and my teaching.  I disagree with David’s post and spent this morning crafting a long reply — too long to be posted as a comment to his blog post.  So I am posting that reply here.

David, thanks for a thought-provoking post.  I have to disagree and not only because I teach the 4 Ps, write a text book that uses the 4 Ps framework, and blogs titled, “Learn the 4 Ps, www.learnthe4ps.com” and “Teach the 4 Ps, www.teachthe4ps.com.”  I am writing to disagree because I think that your post is potentially harmful to marketing students and  marketing managers.

I would encourage you to read a current marketing text book that defines the 4 Ps (maybe one of mine).  My co-author, Jerry McCarthy, invented the 4 Ps in 1960 as a framework to help organize the types of decisions that marketing managers make.  In the last 50 years, through many changes in technology and customer behavior, the 4 Ps has been an  amazingly robust categorization scheme that helps professors, students, and managers organize the different types of strategy decisions marketers can control.  I believe you have confused how people use the 4 Ps and narrowly interpreted the 4 Ps and consequently set up a false argument.

Marketers should be encouraged to identify a target market – the group of customers to whom they want to appeal.  They can then develop a marketing mix (4 Ps) – which are the controllable variables the marketer puts together to appeal to this target group.  Together – a target market and marketing mix – are a marketing strategy.

The 4 Ps are particularly useful because many beginning marketing students and practicing managers believe that “marketing = advertising and selling.”  Often captured in the phrase – “How are we going to market this product.”  This type of narrow thinking is promotion-focused and fails to consider all of the decisions needed to successfully meet customer needs.

I agree with other replies to your post which suggest you have incorrectly interpreted the 4 Ps.  This interpretation is dangerous as it tends to minimize the 4 Ps.  Without the 4 Ps framework (or some other potentially useful framework) marketing managers are likely to fail to consider important strategy decisions that might help a firm or individual to better meet customer needs (which I think we both agree is an ultimate goal).

I am not sure what you mean by “success on the web.”  For some, “success” means generating profits or income, for others it may simply be the psychic income that comes from having people listening to your ideas.

While the 4 Ps are most easily understood in the context of goods (think Tide detergent), you have suggested the 4 Ps are not relevant on the web.  So let me explain how two different organizations which are primarily web-based might use the 4 Ps to better understand their marketing strategy.  My examples are author David Meerman Scott (DMS) and Flickr.  David, pardon me if I misinterpret your business – hopefully I have it close.

Let’s get some definitions out of the way before offering some examples on the web.

• Product is the need-satisfying offering of the firm.  This can include decisions about branding, ancillary services, warranty, packaging, features, and benefits.

DMS has knowledge he would like to disseminate.  This knowledge can help customers solve their problems.  This knowledge can be packaged in a book, in a speech, in his blog posts, or tailored to particular clients via consulting engagements.  All of these are different product forms.  We can dig deeper, DMS’s books could be packaged as an e-book, audio book (I listened to “The New Rules” on Audible – thanks for using that format, too), or a print title (hard cover or paperback).  DMS has to decide what to include in each of these product forms (what content does he choose to include in each form).  These are just some of the Product decisions (I have not even touched branding, the product life cycle, or new product development here) DMS makes when he writes a book or prepares a speech.

Flickr’s “Product” has evolved over the years.  Flickr started as an online massive multiplayer game (Game Neverending) – that had a small photo sharing feature.  The developers realized that users liked the photo sharing part of the game – so they dropped the rest.  Early on Flickr was really just a chatroom that allowed for real-time photo sharing.  The “Product” continued to evolve in response to customer use, input, and feedback and internal innovation.  Flickr has over the years added tags, groups, favorites, and interestingness as features.  These represents just some of the product decisions that Flickr managers needed to make.

• Place concerns all the decisions the marketer makes to make goods and services available in the right quantities and locations when customers want them.  These questions include whether to use intermediaries – and how many.  How to break down bulk?  Whether to use franchises?  While many place decisions focus on “physical goods” many digital products have to make similar decisions?  Think about movies which can be distributed via theaters, RedBox, Cinemax, Hulu, Netflix (streaming or mail), or viewed on the web.  All of these are important web-based place decisions.

DMS has to make decisions about how to make his knowledge available.  Should his books be published through a publisher and go the traditional book store route – or should he follow Seth Godin and self-publish on the web?  He could choose to make his speeches in person, via the web, or record them on DVDs or in MP3 files downloadable from his website?  Does DMS offer his services through a speaking firm?  All of these are Place decisions.

Flickr has similar decisions to make.  How much bandwidth to offer?  Do they sell their services through stores – possibly allowing people to go to Walgreens and upload/download photos from kiosks?  (Not saying all these ideas are good – but by having the 4 Ps, it opens marketers up to potentially creative new approaches to meeting customer needs.).

• Promotion communicates information between buyer and seller (interactive is a great method whether via personal selling or with a blog where comments allow you to interact) or others in the channel to influence attitudes and behavior.  Different communication methods might include advertising, public relations, personal selling, after-sale customer service – and a wide range of social media.  All of these can be used to build relationships with customers.  Such relationships are incredibly valuable.  You are critical of ad agencies that develop a one-off Facebook game to get people to “Like” you – might be a way to open a door to continued interaction with the customer.  If the company’s Facebook page doesn’t provide value to a customer, the customer quickly “Un-Likes” the firm or hides the feed.  The web and social media – like blogs – fall under Promotion and blogs are fantastic tools for engaging and interacting with customers.  It allows the benefits of interactive communication – like personal selling – without the cost of personal selling.

DMS has to decide how to promote his books and speaking.  I notice that both are prominent here at your website.  In fact the blog itself is a great tool for that purpose as well. I believe that many people get a good feel for who DMS is before buying one of his books or asking him to speak at a conference.  DMS has to use personal selling when potential customers call and talk to him about speaking engagements.  I am sure that DMS doesn’t ignore such Promotion activities – and in fact his customers certainly hope he doesn’t. They want and value these communications which help them make a more informed decision.  My introduction to DMS came by reading the “New Rules” and later I found the blog.  I read Web Ink Now regularly because I learn a great deal.  I am likely to be a future book customer – and would love to have DMS speak in one of my classes (then there is that fourth P – price which is probably out of my state school budget).  Recognizing that the best type of Promotion was an endorsement from someone a customer knows or already trusts, DMS gives customers have the opportunity to Tweet or “Like” your blog posts are Promotion decisions.  This by the way creates value for the Tweeter and Tweetee (not sure those are real words, but you get the idea).

Flickr also has to make decisions about how to tell customers about its product.  Should they do advertising?  Should it develop features that make it easy to share photos – so customers actually tell other customers about Flickr?  Flickr can also embed technology that makes its photos more widely available so that more customers consider using it as a photo sharing site.

• Price is the amount of money charged for the something of value.  Price should include an understanding of costs, various tiers of pricing, discounts and allowances, etc.  The web is an especially interesting place to think about price.  Because the variable cost of selling to an additional customer on the web can be very low it opens the market to creative pricing opportunities – for example the freemium model (where most customers use the product for free and a small percentage of customers pay a fee – like Flickr).  For more on that see Chris Anderson’s great book – Free:  The Future of a Radical Price.

DMS has decisions to make about price.  Should he charge a subscription for access to his blog posts (please don’t David)?  How much does he charge for his books, speaking engagements, etc.?  Do these prices change over time?  Should he discount a speaking engagement because he values the audience or because of the audience’s values (maybe they are all Dead Heads)?  All of these are pretty important decisions to DMS and to his potential customers.

Flickr as noted above also has to make decisions about the level of its pricing and whether to offer some services for free.  Should there be introductory price promotions, group discounts, etc.  All of these are important decisions that Flickr should not neglect.

Finally, your post suggests the 4 Ps don’t work because of a “focus on product” or a focus on “promotion.”  But the 4 Ps are designed to remind marketing managers that there needs to be some balance across the 4 Ps.  It is not just promotion focused – but you need to design a Product that customers need, make sure it is available to them where and when they want to consumer it (Place), make sure they know about the product (Promotion), and offer it at a Price that provides value to the seller and the target customer.  Anyway, none of these are easy.  But focusing on any one of them to the exclusion of the others is a recipe for failure – on the web or in the physical world!  In fact, you must agree that solely focusing on the web would not be good for your business – you want to get out and meet people in person, I know this from reading your blog.

In your final sentence you state:  “While making a sale is always the ultimate goal of Web marketing, true success comes from educating and informing and entertaining so that people are eager to do business with you.”  Depending on what Product you are selling, informing, entertaining, and educating could be your Product (my guess is that these are central elements of your Product David) – but for others those may be objectives of Promotion activities designed let people know about other goods and services that a target set of customers might need.

David, I think you have falsely indicted the 4 Ps model because many people have chosen to mis-use and even abuse the 4 Ps in their marketing.  A hammer is not a bad tool because I missed the nail and hit my thumb.  The 4 Ps model is not a bad tool because some people fail to recognize the new and very open world of the Internet.  You are focusing on manages who have a production orientation – not a marketing or customer orientation.  Successful marketing managers benefit from being reminded of the sets of decision areas important to meeting and exceeding a target market’s needs.  For some it might be 6 Ps, 7 Ps or 5 Cs – but any framework should capture the full domain of potential decisions that can be made to meet customer needs.

The 4 Ps is quite simply a classification scheme that helps marketing students and managers recognize the different strategy decision areas.  This classification scheme can be criticized for failing to include important decision areas – though I would argue that if you look at most modern marketing text books the 4 Ps have advanced to include the new tools you suggest.  But it should not be criticized because some people are mis-using the tools in the toolbox.  The challenge – as with all marketing – is how to best utilize the tools at your disposal.

To anyone who has actually taken the time to read this full reply – thank you.  After previewing my post I see that it is longer than David’s original post.  Sorry for the wordiness – but I am a professor. 

My students love Nike — when I survey them about their favorite brands it consistently ranks #1.  My point – Nike examples play well in class.  Of course any example should be relevant to marketing and this one could work well with a discussion of segmentation, new product development or advertising.

Nike is aggressively going after youth action sports like skateboarding, snowboarding, surfing, trick-bicycling and others – see “Nike Tries to Enter the Niche Sports It Has Missed” (New York Times, June 1, 2011).  Nike’s tactics in these markets are in many ways similar to those it has used in other markets — employing top athletes in each sport to endorse the brand and support it ith dynamite advertising that appeals to its target market.  The video below was released on Facebook (where Nike has specialty pages for various sports) even before it launched on network TV (during the NBA finals).  Nike created the Nike 6.0 sub-brand (see its Facebook page here) just for the action sports market.  Also posted at Learn the 4 Ps.

Volkswagen’s global market share is about 11% — but it sits at only 3% in the world’s largest auto market — the United States.  Volksagen’s managers hope to change that, so they are re-doubling marketing efforts.  This article, “Volkswagen Rediscovers America” (Bloomberg Businessweek, May 19, 2011), offers some insights into its strategy — but mostly gives a few interesting nuggets of information.  For example, I was surprised to read that as compared to its European counterpart, the U.S. Passat has more legroom, larger control buttons, and a better air conditioning system.  And the U.S. customer gets these extras for for a price of about $8000 courtesy of lower U.S. wages and simplified product design.  VW has just opened its first U.S. manufacturing plant since 1988.

The article offers some examples that can be used when you teach international marketing (product adaptation) and the local factory turns a weakness into a strength.

VW’s 2011 Super Bowl commercial (“The Force” see below)  was one of the most popular — though I must confess I was not a fan.  While I found the ad cute, I didn’t think it said anything relevant about the brand.

I like to encourage my students to think creatively.  So I like to help them see the value of creativity, examples of creative thinking, and known creatives from across a variety of fields.

Marketers need to be creative to be successful these days. Start by reading Seth Godin’s blog post “Underextended” (May 23) where he points out that overextending ourselves as we strive to be creative is a good thing.

Your students might enjoy picking up some tips from from Conan O’Brien who was just named one of Fast Company’s “100 Most Creative People in Business.” Fast Company’s interview with Conan results in a short article, “Conan O’Brien’s Guide to Creativity,” (May 20, 2011). While the interview focuses mostly on Conan’s work — comedy — students should be encouraged to think about how some of his ideas could apply to their future careers.  You might suggest they check out a few people from the full list of the “100 Most Creative People in Business” for more inspiration!  Also posted at Learn the 4 Ps.

How does a dominant firm increase its customer base?  One tactic targets a new market with a new but related marketing mix.  Starbucks’ continues to look for growth — and is now looking for it from its Seattle’s Best brand that it acquired eight years ago.  This article “Starbucks Targets Folks Who Shun Starbucks” (Bloomberg BusinessWeek, April 21, 2011) gives some insights about product, price, promotion, and place elements for Seattle’s Best.

Here is a suggestion for using this article in class or as an assignment.  Since most of our students are familiar with Starbucks, it might be fun to draw a 3 column figure — with the left column headed with “Marketing Strategy,” followed by “Product,” “Place,” Promotion,” “Price,” and “Target Market.”  Then head each of the next two columns with “Seattle’s Best” and “Starbucks.”  You could let students break into teams to complete the picture – or simply ask students to fill in the cells on the figure you draw on the board.  I find that my students learn a lot from these types of compare and contrast in strategies.  To give students more insight into the perhaps less familiar Seattle’s Best brand, you could show one or more of the three ads in the video clip below.  Also posted at Learn the 4 Ps.

Here is a great case study.  This article provides the basis for a nice story to tell in class or reading to assign.  What happens when the company that holds 40% of the carrot market brings in a former Coca Cola marketer to run the company?  Well, he conducts research and then brings on big name ad agency Crispin Porter + Bogusky.  Together they go after new ways to increase our consumption of the orange veggie — and not promoting its healthiness.   An interesting marketing tale is told in “How Carrots Became the New Junk Food” (Fast Company, March 22, 2011).  And the story is still being written — we don’t yet know if this strategy will work and sell more carrots.

The article will allow you to talk about consumer behavior, market research, positioning, branding, packaging, promotion, and advertising.  Good stuff — and a fun example, too.  Also posted at Learn the 4 Ps.

Now Guy Kawasaki is a Silicon Valley venture capitalist and a big name author in the tech community — I think this is his tenth book.  He already has an incredible network.  With the publication of his new book – Enchantment:  The Art of Changing Hearts, Minds and Actions, Kawasaki relied on low-cost forms of social media to get the word out and drive great initial sales. Read about it at Mashable “HOW TO:  Launch Any Product Using Social Media,” (March 31, 2011)

The book is already on the bestseller lists at the Wall Street Journal and New York Times.  In other words, it worked.  This is a great case study on how to use social media.  While the case study looks at the launch of a book by an already successful author, I think that with some in-class discussion, you can see how the ideas can be applied to other product launches.  It might make for an interesting exercise to ask students how these ideas could be adapted to launch a new dog food, hip hop band, or snow board.

This example could be used when talking about marketing strategy planning, promotion, publicity, or social media.  Also posted at Learn the 4 Ps.

Let’s get up to speed on Groupon.   I definitely missed this one.  I thought the Groupon thing was just kind of a niche idea; I thought it would never take off and hoped it wouldn’t.  We don’t need to make consumers more price sensitive – do we?  I also thought they were nuts last year for turning down a $6 billion buyout offer from Google.

What is Groupon?  Groupon is the most well-known of a variety of different “Deal-of-the-day” websites.  Groupon is now in more than 250 geographic markets around the world – with most promotions for small local firms.  Customers sign up to receive a daily e-mail with a deal like “Get $20 worth of pizza from Giovanni’s Pizza for only $10.”  If you want to buy the discount – you have to buy that day.  The retailer and Groupon typically split the $10 – about in half though that varies.  So a retailer receives $5 for a coupon that gives a customer $20 worth of pizza.  This raises a variety of interesting questions – good in-class discussions – about when this might make sense.

Well Groupon appears to be here stay—so I have a few different articles to get you up to speed.  From a teaching perspective there are two issues.  First, there are real questions about whether using Groupon makes sense for small businesses (the subject of the first three articles above).  It might make sense for a company trying to attract new customers – and confident it can retain them.  For different perspectives on this issue, see:   “Is Groupon a Good Deal for Small Business?,” (Fox Business, January 27, 2011).  And do we want to attract the deal-prone consumer — will they be loyal and profitable?  For one perspective on this issue see “Beware of Innovations from Daily-Deal Sites,” (Harvard Business Review, March 25, 2011).

On the other hand, it makes little sense to send out a deep discount coupon to your regular customers.  The first two articles above all deal with that issue.  Second, there are concerns with Groupon’s long-term marketing strategy.  With few barriers to entry, new competitors are springing up all over.  This has given small businesses buying power vis a vis Groupon and its competitors (see “Burned by Daily-Deal Craze, Small Businesses Get Savvy,” Wall Street Journal, March 24, 2011 – non-subscribers may have to click here or check out the video below).  It also naturally leads to questions about Groupon’s strategy moving forward.  With few barriers to entry, how can Groupon get a sustainable competitive advantage?  Groupon is trying – check out “Are Four Words Worth $25 Billion for Groupon?” (Bloomberg Businessweek, March 17, 2011) to read about how Groupon is trying to move ahead with a new location based strategy.

As you can imagine, Groupon could be used to discuss consumer behavior, sales promotion, retailing, and marketing strategy planning.

This Wall Street Journal article “Pizza Chain Seeks Slice of Bicultural Pie” (December 29, 2010 non-subscribers may have to click here) describes the 100 store Pizza Patrón restaurant chain’s changing marketing strategy.  The firm has focused on a Spanish-speaking target market, but now looks to reach out to new target markets that includes whites and African-American youth.  The article describes Pizza Patrón’s marketing research and some of its strategy plans.

The article provides an interesting strategic counter-attack when you consider all the companies trying to appeal to the growing Hispanic market.  The example also fits with a discussion of segmentation, marketing strategy planning, and even market research.