October 5, 2007
Are the 4 P's still relevant in today's world?
As I was responding to some discussions in the Marketing 2.0 group on Facebook, I started talking about the relevance of the 4 P's in marketing, which of course is one of the cornerstones in marketing education worldwide.
But are they really relevant anymore?
Let's look at them one by one:
- Product - I guess this one stays :) - although are you sure that people are always buying your "product"? Or are they buying an experience associated with your product? Or perhaps a "personal identity" that comes with the use of your product?
- Place - is amazon.com a place? Is a search engine placement a place?
- Promotion - people are not taking your corporate BS anymore...And according to the Strategy and Business article I posted in the Facebook "posted items," 80% of all insurance policies will be bought based on information not provided by the insurance companies! So does promotion in the insurance industry still matter? Maybe - if you think that the company can participate in the creation of the user generated content that people will base their decisions on without hiring corporate "shills."
- Price - many new business models have funny pricing schemes - as in "free"
In the late 80's some academics (I cannot remember who they were) came up with a replacement for the 4P's - the 4C's. While not perfect, the 4 C's may sound a little more modern/appropriate for the times:
- Customer instead of product
- Communication instead of promotion
- Cost instead of price
- Convenience instead of place...
Using the 4P's as a roadmap for success for new products may not be the best roadmap to use anymore... It is a bit like using north, south, east and west as guides to find your way in deep space.
August 16, 2007
The CMO role is broadening...
McKinsey Quarterly has an interesting article on the evolving role of the CMO (requires subscription). In it they argue that while most CMO's have their hands full, their role should be further expanded - to represent "the voice of the customer" throughout the organization.
(Yes! finally some common sense on the role of the CMO from an authoritative voice ...)
In the face of a rapidly changing customer - ignoring "push" marketing and making buying decisions based on their own research rather than sales recommendations - and with bloggers and other consumer-generated content now determining corporate reputations, companies need to change the way they meet customer needs, the way they innovate, and the way they behave in the marketplace. That will require change efforts across the entire corporation, and who is better positioned to lead those charge than the CMO?
You don't buy the fact that "push" marketing is dead? Then consider this: in consumer electronics more than half of the buyers buy products based on their own research rather than advice from sales staff. More than 60% of baby boomers use the Internet to supplement their doctor's advice (so pharma marketers have to rethink the pitch to doctors). And by 2010, it is expected that 80% of all insurance purchases will be based on consumer research rather than information supplied by insurance agents.
You are not worried about consumer generated content? McKinsey Quarterly says" "User-generated media account for almost one-third of all the time individuals spend on the 100 most visited US Web sites, up from roughly 3 percent just two years ago."
The change in consumer buying habits is broader than some may expect. It is not just that the number of customer touch points with a company has increased dramatically, there is also a more rapid growth of the low and high ends of the the market at the expense of the middle.
So a marketer does not just need to understand the changing customer need as it relates to their product or service, they also need to understand the changing buying needs of those same customers and adapt the whole company to deal with those changes.
March 30, 2007
What happens to large enterprise software vendors as the workplace becomes "atomized"?
Reading Jim's post and reflecting on two conversations I had this morning - one with a relatively senior person at a major financial institution who told me that the biggest barrier to adoption for enterprise 2.0 tools in his company may be the fear of a flatter organization, another one with a sales rep from one of the two largest enterprise software companies who was trying to convince me that they now cater to companies like ours, with 2 people, a goldfish, and a virtual network of freelancers - got me thinking about the long term prognosis for large companies in general and the fate of large enterprise software companies in the face of an increasingly "atomized" workplace, or as FAST company said in a recent article - a world of a billion single-person enterprises.
I know...as Larry Keeley says, we always overestimate the amount of change in the short term, but we also underestimate the amount of the change in the long term. I wonder how many large enterprise software companies are thinking about this future...or how many large companies in general for that matter.
WARNING - big changes ahead...
January 11, 2007
"Thin-slicing" marketing plans
There is a new 5 "things" meme going around and I have just been tagged for it by Mary Schmidt. This time the idea is "thin-slice" a particular topic - a term coined by Malcolm Gladwell in his latest book Blink, and described as follows:
"Thin-slicing is a neat cognitive trick that involves taking a narrow slice of data, just what you can capture in the blink of an eye, and letting your intuition do the work for you."
My task was to thin-slice a marketing plan - so here we go:
1) Do you really need a marketing "plan"?
Very often people just need to get out and engage with customers, prospects, influencers and connectors. There is no need for a marketing plan to do that. Often times marketing plans are just produced by marketing luddites as a CYA document. Granted, for some very large projects that involve large teams of people a plan can be useful - but more as a check-list than as a marketing roadmap.
2) Does the marketing plan show the addressable market being in the billions of dollars?
Any VC will scoff at these numbers - yet they won't invest if it is not true. Don't talk about the total addressable market, tell me how you will get your next 10 or 100 customers. Who are they, what do they do, where do they live, how will you reach them? Give me real life scenarios of potential customers and how you will help them solve their problem. Don't give aggregate figures that have zero meaning.
3) Are you pretending or intending on being a leader in a category that nobody ever heard of?
Most companies I have worked with consider themselves the category leader in a category with one player - themselves. A category is recognized by others as a category and has other players in it. You can "create" a category, but you need help to create a new one - including help from competitors. Show me how you will create a new category, and who you will enlist to help with the creation? Show me how you will change the rules of the game in that category, how you will change the players or change their respective value as you enter the category - now that's interesting!
4) Does your competitive review result in your company or product being in the upper right hand corner of some diagram?
Do I need to elaborate? You and everybody else lives there...it must be pretty tough to compete there. Show me where you are on the BS curve compared to others - that would be much more interesting...
5) What part of the plan deals with how you will deal with change?
The biggest danger with plans is that they become "bibles" - and once they are approved nobody can deviate from the chosen path. Yet most successful marketing programs are emergent in nature, they are like a jamming sessions...and so back to point 1) do you really need a marketing plan?
And now my turn to tag:
- Tara - how about engaging communities as part of your marketing plan?
- Pito - what about product plans?
- Jackie - how about word of mouth marketing plans?
- Chris - what about customer service strategies?
- Tom - what about brand strategies?
- [updated] I decided to add a 6th one as I care about PR and Europeans :) - Neville, what do you think?
January 3, 2007
You are your context
Try tapping a song for someone else – chances that the person you are tapping it for gets it right is 2.5%. What makes a lot of sense to you, because you have the song playing in your head – sounds like total gibberish to others. The same is true when you meet someone online for the first time – their chosen handle may symbolize some imagery for you that was totally unintended by that person.
The difference here is that we all interpret signals based on the context we have. And when our context is different, we interpret things differently. A different context is also the main cause for friction and conflict between people.
In the past, there was a higher likelihood that people’s context in a particular geographic region was somewhat similar – there were only a limited amount of TV programs and radio shows, people had a much more limited supply of books and newspapers, music preferences were more uniform, there were fewer options for schooling and there were less churches to choose from. Now on the other hand, much of the popular culture is consumed through 100’s of cable channels or through the internet, you can read books that are self-published and reach audiences in the 100’s of people, you can read any newspaper in the world online or get your news from specialized blogs, you can pick from music bands that self-publish their music on social networking sites and have fan clubs in the tens or hundreds of people, and you can come up with educational programs that are totally unique to you. Add to that the increased mobility of people and the ongoing trend towards more extreme and fractioned faith-based groups – and you have a world when there is almost no shared context anymore. It’s what Wired Editor Chris Anderson calls the long tail…except that perhaps there are more people moving into the long tail now that it can be served.
Marketers, advertisers, communicators and politicians have been struggling with this phenomenon for a few years now – mostly because the old ways of “framing” issues does not work in a world where people’s context or “world-view” is so vastly different from one another.
A world populated with people that have very different contexts should also be a world where innovation explodes – or is Kathy Sierra right when she says that the “wisdom of crowds” mostly results in safe, well-balanced and non-offensive solutions?
What do you think?
September 5, 2006
In Marketing death valley - the changing fundamentals
In order to kick-start the series on the changing face of marketing that was announced a few weeks back, here is list of marketing fundamentals that have profoundly changed or are in the process of going through dramatic transformations. Periodically we will tackle one of them and look at what the changes mean to the new ways of marketing.
If you think that some fundamentals are missing, add them to the comments and every now and then we will refresh this post and link to it from future posts in this series.
List of Marketing Fundamentals that have dramatically changed:
- Role of marketing in the organization
- Marketing strategy
- The marketing mix
- The marketing environment
- Understanding buying behavior
- Marketing research
- Marketing metrics
- Market segmentation
- New product development process
- Branding, advertising & marketing communications
- Services decisions
- Sales and marketing coordination
What else is missing? Some topics, take competitive strategy as an example, are not listed as separate topics as they are part of one or more areas listed above - in this case marketing strategy, just to name one.
August 28, 2006
CMO tenure keeps going down...
According to Spencer Stuart (via Brand Republic), the average CMO tenure keeps going down. A painful side effect is that marketing agencies have to defend their business sooner as well.
The changes are not that dramatic - with the new average tenure for CMO's being 23.2 months in 2006, down from 23.5 months in 2005 and 23.6 months in 2004.
The whole shortening in tenure is likely due to a combination of things: the fundamentals of marketing going through a dramatic shift - leaving many CMO's who are not permanent students of the industry in the dust - and the accountability of the CMO on the executive team being miss-aligned with what their real role should be.
August 7, 2006
Are You in Marketing Death Valley?
Have you been in marketing for awhile? Were you trained in marketing? If so, chances are that you’ve been wondering what happened to the “traditional” marketing rules (if there ever was such a thing) - and what replaced them.
There is no question that tectonic shifts have redefined the fundamentals of marketing as we knew it – leaving many marketers feeling like they are in the midst of crossing the equivalent of “Marketing Death Valley.”
At the very least – take a look at one of the fundamental concepts of marketing - the 4P’s of the marketing mix (Product, Price, Place, and Promotion). In the early 90's Prof Robert F. Lauterborn suggested that the 4 P’s should be replaced with the 4C’s (Consumer needs, consumer Cost, Convenience to buy, and Communications). Either way, do you believe that those are still useful as fundamental concepts for defining the marketing mix? How much can you tweak "price" in your marketing mix if some of your competitors came out with free products? What can you do about "place," now that it has become mostly ubiquitous and almost free? And how much should you spend on "promotion," when the new marketing scarcity is "customer attention" instead of shelf space, and where "findability" is the new name of the game? Sure, in some spaces you can still gain some differentiation by changing some aspects of the "product" mix - but most of those are very short-lived differentiations.
In a series of posts during the next couple of months we will be looking at what happened to the traditional rules of marketing – and try to understand what the new fundamentals are. Feel free to join this conversation and help us to make this series of posts worthwhile.