In the early days of modern marketing, E. Jerome McCarthy, an author and a professor at Michigan State University, developed the four Ps within the marketing mix. This was detailed in the influential book Basic Marketing: A Managerial Approach, which he co-authored with W Perrault Jr and JP McCann in 1960. The four Ps were pivotal in really allowing brand managers to think strategically about their organisation and distil the ingredients that separated their brand from all the others. It's that nuanced knowledge - a brand's 'secret sauce' - that continues to see one brand thrive while another merely rumbles along or fails.
The long-standing success of the four Ps in the marketing mix
- Product: the element that satisfies a consumer need
- Price: the cost to buy the product or service
- Place: the marketplace where people can buy your product or service
- Promotion: all advertising and promotional activities
Those four Ps have worked exceptionally well for marketing managers in the age of mass media. They have continued to stay relevant despite components within them changing (place may have gone from physical shop to online store, for example).
The evolution of the marketing mix
As more and more businesses have come to market, they have evermore options for communicating their messages, increasingly savvy customers, a lot of 'noise' to cut through and most brands finding that they have at least one competitor in the market. Therefore, the marketing mix has acquired some additional touchpoints. At first, they extended to seven Ps (adding people, process and physical evidence into the repertoire), and now we have an eighth with productivity and quality also entering the stage.
- People: organisations started to recognise that the people who worked for them were the big differentiator between brands. IBM was arguably one of the first and most prominent examples, with their white shirts and blue suits soon becoming the hallmark and status symbol of the quintessential 'IBM man'.
- Processes: this was very much the start of thinking about the customer experience. For example, if you're a software company, the experience is an essential part of your mix because if it's not easy to opt in, people will drop out before they're past the sign-up process.
- Physical evidence: this is the evidence of a delivered product or service. Today the best example of this is probably in reviews on platforms such as Google, Tripadvisor and TrustPilot.
- Productivity and quality: this is less about your company's productivity and more about how your customers get a sense of these factors in the product or service you deliver.
How does the marketing mix apply to business today?
The 'eight Ps' is far less catchy than the four, and that now the rather extended list is an indicator of how competitive the world has become. If you think about how game-changing Marks & Spencers' Food Hall was in its heyday, compared to the variety of food stores and supermarkets today, you get an impression of what most markets are facing. Now, almost every business has a competitor, so the marketing mix helps you define what does or will make you successful. It has become more precise because the competition is that much stronger.
Whether you believe in four Ps or the extended marketing mix of seven or eight Ps, what marketing leaders and business leaders need to understand is that the role of the CMO is to identify a marketing mix optimised for your target market, which allows you to deliver marketing in a structured and strategic manner. Gone is the Mad Men age, when a predictably large audience would see a well-placed TV advert on one of the four available channels and the job was done. Today, even the classic British confection, Kit-Kat, has more than 300 flavours available in Japan to address market demand and compete against more contemporary brands.
It's not about simply adding to your product line, however, and in many cases, it's not about being all things to all people. Invariably it's about cornering a specific area of the market and doing it exceptionally well. It's about understanding a nuance about customers through a process of market segmentation, strategic development, and the ongoing review and assessment of your operations and business model to stay relevant.
Steve Jobs may have been famous for saying, "people don't know what they want until you show it to them," and to some extent, there's truth in that. However, for the most part, Jobs was the exception and not the rule. What successful businesses are finding is that even if consumers don't have the answer to a problem they're facing, listening to them provides invaluable insights into understanding their market and continuing to meet consumer needs with a view to retaining their support. That's where the value of a truly experienced Chief Marketing Officer can be game-changing.
