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Marketing's New 5 Ps: Turning What You Know Inside out

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With apologies to Philip Kotler, whose four Ps—product, price, place, and promotion—have been integral to any successful product or service marketing effort of the past 50 years, today's successful marketing hinges on five new Ps.

Whereas the Ps we studied in college are all from the provider's point of view, these new Ps focus with laser-like clarity on the customer.

But customer-centricity can't be the mantra of just the marketing department. Every group, from the boardroom to product leaders to IT, must place the customer at the core of every decision it makes.

Responsibility for evangelizing within the organization rests squarely on the shoulders of the CMO. After all, if the marketing chief isn't living and breathing customer focus every minute, and encouraging others to do the same, who will believe its importance?

The CMO's office must consistently demonstrate to the rest of the enterprise the value of looking at all products, messaging, and brands through the customer's eyes. The entire organization can then get closer to the hearts and minds of their prospects and customers, with the added benefit of proving the value of every initiative that the company undertakes.


The new Ps are composed of five equally important, tightly interwoven components, designed to more tightly integrate marketing in the future.

1. People

Certainly, the audience must be at the heart of any marketing initiative. That isn't news to anyone in your department. Smart marketers have always had an instinctive sense of what their audiences would respond to. But no longer is it enough to know about your target in aggregate. Perhaps "person" might be a better heading for this P—because now it's important to know your customer intimately, as a human, emotional being.

It's one thing to know how people who generally look and act like your customer might respond. It's another to know exactly how John A. Sample has responded in the past, and what's likely to interest him next time. Why did he make his last return or exchange? What did he look at before placing an order? Has he purchased anything since his last call to customer service? What size does he wear?

Chances are, he's already told you who he is and what he wants—but were you listening?

2. Passion

Marketers are passionate about their profession. But no good marketer can function using only the right side of the brain anymore. Creativity and instinct are still important, but the anal side—the analytics side—is gaining fast.

Marketing is part of the business, and the business exists to perform. As a result, you're being held to greater accountability than ever before. Today, your passion for marketing must be driven by facts—the full view of all the data now available about customers, campaigns, and returns.

You already know that this passion for a 360-degree perspective can have an incredibly powerful effect. Being able to apply sophisticated marketing analytics to every piece of information you collect about your customers is like bringing the customers themselves in-house to tell you not just what's working and what isn't, but why. You can use this passion to your advantage, helping generate ideas, proving their relevance, and justifying the money you spend.

Still, a survey published in March by the Association of National Advertisers found that the top two concerns of senior marketing executives are integrated marketing communications and marketing accountability. Further research by the same group found that 60% of respondents had none of the necessary cross-functional involvement in their companies' development and management of marketing accountability programs to make them truly effective.

If you're like many CMOs, you've already identified the needs but may be uncertain of the solutions. Fortunately, each of these issues can be addressed by enterprisewide marketing analytics.

3. Processes

Marketing processes must become more enlightened. It's time for everyone to sing from one song sheet—instead of having discrete departments creating dissonant communications and hoarding data. Database and digital marketing, marketing operations, and customer relations all need to work in concert—a concept foreign to many companies in which other departments are often viewed as competitors rather than collaborators.

Again, the answer is a passionate, organization-wide approach to customer-centricity. If it doesn't come from the CMO, where will it begin?

Just two years ago, more than 40% of database marketers surveyed by Forrester Research lacked a complete picture of customer contact history, and one-third were missing transactional data from one or more channels.1 That is clearly less than ideal.

In an organization with customer-focused processes, everyone strides toward a common goal. In a sales organization, for example, this can mean that the group which handles generating and tracking leads works closely with the sales team to contact, close, and communicate with prospects. Everyone has a hand in determining how often to communicate, how to allocate budgets, campaign lifecycles and more.

Forrester Research analysts suggest that "socializing" the customer database is a necessary change, so that everyone in the enterprise can contribute to and benefit from this tremendous asset. It's time to throw siloed systems, ideas, and processes out the window. But a sea change like this one has to start at the top.

4. Platform

An industry of ideas, marketing also now relies heavily on technology to guide contact strategies, deliver messaging, integrate information and processes, and measure performance. This takes powerful tools, only a few of which are up to the task of managing the vast data stores available across multiple channels, but they're out there.

Of course, software and technology can't solve the issues—they can only provide the platform for coordinating and accessing information, helping to apply customer-centric thinking to every initiative an organization undertakes.

Peter Kim of Forrester Research suggests that "many brand marketers don't understand IT's value beyond email and Ethernets. Conversely, many IT departments think of marketing as the 'make it pretty' department. In the best interests of the organization, marketing and IT must come together and share resources to build an experience infrastructure layer to support the customer experience. Marketers should add a high-level internal role to champion marketing technology and to manage the construction of a marketing technology backbone."2

Of course, the internal IT department may not be the answer. They have their hands full trying to satisfy new regulatory, privacy, and security demands that crop up every day. Marketing technology, however, is a specific discipline that applies technology to traditional and emerging marketing functions that can help companies deliver consistent customer experiences, integrate marketing processes, measure performance, align themselves to the needs of their businesses, and become more accountable to senior management.

5. Partners

Partners are an integral part of marketing—they always have been and always will be. The expertise they offer adds value over and above what can be achieved in-house. Consequently, CMOs must ensure that they have solid partner relationships that are part of the process and integrated more closely into the marketing department.

As marketing becomes more sophisticated, marketing service providers, agencies, and systems integrators must all be tapped to deliver on their particular areas of expertise. It's impossible to have all the skill sets in-house and do everything well and cost efficiently.

For many companies, this isn't a new idea—they already look to different providers for various types of creative, media buying, production, and more. It just becomes more critical as highly technical capabilities come into play.

Looking to the right partners means outsourcing key responsibilities to those best equipped to deliver on them, and that reduces the risk associated with investing in new infrastructure and specialist teams.

The Five Ps in Practice

When wholly, enthusiastically deployed, the new five Ps all work together—a passion for pleasing the person with whom you're doing business gives rise to new processes, the adoption of smarter platforms and value-adding partnerships that can make the promise of one-to-one marketing real.

But it has to be an enterprisewide way of thinking that comes from the top and infiltrates every member of every team. And it has to start with you.

Sources:

1"Best Practices: Socializing The Customer Database," Forrester Research, Inc., July 23, 2007.

2"Best Practices: Customer-Centric Marketing," Forrester Research, Inc., July 25, 2007.


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Jason McNamara is chief marketing officer of Alterian (www.alterian.com).

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Comments

  • by Chris McCrory Tue Mar 18, 2008 via web

    Nice job with these additional Ps. I have some others to add as well. Look here: http://kennen.wordpress.com/2008/02/20/4ps-are-not-enough/

  • by John Holsen Tue Mar 18, 2008 via web

    Good article! I'm submitting it to bizSugar.com.

    Over the years I've read quite a few articles about changing the Ps. For the most part, I thought the idea was ridiculous because every new addition to the marketing mix can still fit into the original 4 Ps. However, I've recently come to the conclusion that it's not about getting the latest concepts and technologies to fit neatly into categories; it's about creating a mindset that changes the way we think about marketing. If by changing the Ps we can change what we focus on in marketing, then it's time to break from tradition.

  • by plmurphy Tue Mar 18, 2008 via web

    Nope, another avant garde article that offers little substance. Similar to the current claim that marketing and sales are now consumer oriented. Like they have not been in the past? I like the original 4 Ps.

  • by David Mulobole, Business Executive, Uganda Wed Mar 19, 2008 via web

    Jason's 5Ps are a good addition to Philip Kotler's 4Ps. In my opinion, the 5Ps provide a quite useful context within which Philip Kotler's 4Ps can operate better. The 5Ps do not replace the 4Ps , they only complement them. Understanding of the original 4Ps is essential, while appreciation of Jason's 5Ps is beneficial.

  • by Marko Wed Mar 19, 2008 via web

    It's not Ph. Kotler who introduced to us the 4 Ps but E J McCarthy (see the references in Kotler's books)

  • by G.F.J. Bernie Wed Mar 19, 2008 via web

    There is another missing which should be included in Service Marketing contexts; Physical Evidence.
    And Marko is correct - the 4Ps are called McCarthy's 4Ps - my second year undergraduate students know this so it takes away from McNamara's article than he errs on such a fundamental point. Allowing for that, the article is a useful one.

  • by prashant shrivastava Wed Mar 19, 2008 via web

    hi,

    this is really a good article. But I suppose there are total 11 Ps-
    product, prize, promotion, plcae, people, process, phisical evidences, plateform, partners, public openion and ultimately politics.

    As we all know that what coca cola did while emtering into INDIAN market. it has been banned in india in 1970's and again it has tried to penitrate into indian market in late 1990's . It has projected that it would support government in envionmental savings through ethical practices as well as it would open its own manufacturing division. That is a real example of how politics turns a coin.

  • by Vijay Naidu Thu Mar 20, 2008 via web

    Jason has provided the 'spects' to succeed in the today's marketing world.
    The consumer-centric spects every marketeer needs to put on.
    In a changing scenario the adaptability is the key. We have the platform in terms of software and technology but the consumer-centric mind set helps you deliver the right strategy at the right time and the right place.
    Good 5 P's to 'lock in' and keep constructing....

  • by ps Thu Mar 20, 2008 via web

    Again quoting that this is a good article but One can not eliminate or discard porter's Ps . I do agree that customer centric organization always succeed in today scenario. but they have to offer something ( Product / services) to satisfy their need in very minimal amount (prize) through various ways of informing them ( promotion) and through availability of product ( place - distribution).
    It seems to appear that this article is very much influenced by organizational behavior concept.

  • by Anzhelika Tue Mar 25, 2008 via web

    Nothing new about it.If we talk about tourism marketing there are actually 7p's: physical evidence,people,processes.

  • by Simon Hall Tue Apr 15, 2008 via web

    Great article, I've only read a few of the above comments but I agree with the comment on changing mentality. I like the point of processes and I guess you could equally also bring a point on 'perspective' where a broader perspective is required. Working in IT, marketing as a silo on its own rarely exists from my experience and marketing takes on a broader perspective including responsibility for P&L, and sales performance as well as tieing in the traditional aspects which drive marketing strategy and

  • by Carolyn Gardner Tue Apr 22, 2008 via web

    Great job at re-thinking the 5 P's. As Simon notes in the above comment, "Perspective" is another new and important P to consider. And guess what, I've got another one....your list of 5 P's is already up to 7 if you also add "Personalization" into the mix. Personalization on the web is becoming increasingly important because it makes every visitor have a unique and relevant experience that changes dynamically, in real-time, according to their individual behaviors and interests. With visitor expectations being as high as they are, this is the competitive differentiator smart marketers need to factor into the mix.
    Carolyn Gardner - Director of Customer Experience
    http:// www.sitebrand.com

  • by p bagli Wed Apr 23, 2008 via web

    Creative and informative job of bringing the 4 P's into the new millenium. However, the majority of sales done in this country are face to face by professional sales people. There is passive and active web investigation sure, but deals of every size are being closed by people who have the key to People, Passion and can greatly assist in the Process. THis downplaying of Sales is indicative in the 40% figure of those not understanding their customer. Sales is the voice box of the customer and I know so much of seems like disjointed, anecdotal noise. Listne carefully, the answers are there.

  • by Sunil Agrawal Thu Apr 24, 2008 via web

    Excellent work.
    Can extend upon the Strategies for implementation of the same.

  • by Dr.S.Davidson Wed May 14, 2008 via web

    Excellent article to any one who seeks some insight into Ps.I also enjoyed the comments,what a brilliant horizon of knowledge leadership!

  • by Doe Awunyo,Ghana Fri Oct 24, 2008 via web

    Good work though, but the 4ps still remain fundamental to marketing that any attempt add to it needs an extensive research and justification. well the new Ps relevant.

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