In an alarming number of businesses, marketing has been shunted to the kids’ table and has been maligned as glorified advertising or comms. But a return to basic principles could help to shake that misconception and put marketing back where it ought to be: at the heart of business decision-making.
Three missing Ps
In 1960, E. Jerome McCarthy published Basic Marketing: A Managerial Approach in which he structured marketing into Product, Price, Place, and Promotion. These would commonly become known as the “4Ps” and were under the purview of the marketing department.
However, businesses and their internal workings have evolved since the 1960s, and the 4Ps have been disseminated across different departments. Product often has its own department, Price is largely dictated by Finance, and Place generally falls to Operations. As a result, the influence of marketing has been diminished and it now mostly deals with Promotion only.
Ashamedly, “digital marketing” has added rocket fuel to the fire. As optimisation has become possible in real time and changes can be made at the click of a button, there’s been an expectation that more and more happens, faster and faster. The most immediate lever to pull is almost always advertising, so it’s hardly any wonder that marketing departments have fallen into the tactification trap. But the consequence of this shift is that those same teams can’t think longer term. In effect, they can’t think strategically.
Two pillars of value creation
Business isn’t exactly rocket science. Being human, we’ve found a myriad of ways to complicate things, but it’s fundamentally a simple value exchange between you and your market. You provide something meaningful to your customer, be it a product, service or experience, and they reciprocate, generally in the form of cash.
Fans of Peter Drucker will know that there’s two basic ways of creating that value for your customer: marketing and innovation. Both add value by ensuring that your offering is relevant, accessible and desirable, either by connecting your existing proposition to customer needs or by adapting it to better meet them.
One framework for value creation
It’s fair to say that Drucker’s ideas about business are based on the same underlying principles as McCarthy’s approach to marketing: understand your customer’s goals, hopes and fears, and offer them a differentiated, attainable solution to their needs. The 4Ps can therefore be viewed as more than a marketing framework, they form the foundation for your entire value proposition.
Now there’s plenty of critics of the 4Ps and there’s been countless attempts to add new Ps to the mix, but the whole point is to simplify the complex. That’s precisely why it’s important not to get hung up on the distinctions, it’s a framework not a rigid set of rules. Think of the 4Ps like the walls of a house. Whether you label one as ‘Product’ or ‘Promotion’ doesn’t change the fact that they all work together to keep the roof up. If you do that, the 4Ps provide the parameters for a practical approach to structuring your business efforts, clearly setting out a path to value creation.
It’s time to get back to basics
I could go on at length about how we’ve come to this state of affairs, but the fact is that marketing’s position as the core growth driver of a business has been eroded over the years. If we’re going to repair that situation then we need to get back to the basics.
Start with your customer. What are their goals, hopes, and fears? Use this insight to map out all 4Ps, not just Promotion. If that means coordinating across a number of fragmented teams, then so be it. Ultimately you’ll be able to create better products, charge more, and unlock your growth potential through true value exchange.