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The 4Ps of marketing, also known as the producer-oriented model, have been used by marketers
around the world for decades.
Defined by marketer Jerome McCarthy, the 4P’s advocates a focus onProduct, Price,
Promotion and Place.
Recently, though, the growing influence of the Web has made these classic principles look a bit
archaic in light of the new relationship that businesses have with customers.
In a day where customers seem to know everything about your business, the old marketing mix
that the 4Ps offers is increasingly at odds with how business is done today.
First, we need to look at the fundamental problems with the old way of doing things. Then we
need to identify a framework that can cover the same fundamentals, but that is more aligned with
how business is conducted today.
Below, we’ll take a deeper look at the juxtaposition of these old and new ideas.
What's Wrong with the 4Ps?
According to research published in the Harvard Business Review (HBR), a five-year study
involving more than 500 managers and customers (in multiple countries) found that the 4 Ps
model undercuts entrepreneurs and marketers in three important ways.
1. It leads marketing and sales teams to focus too much effort on product technology and
quality. Even though these factors are important, researchers stressed that they are not
significant differentiators; they are just the cost of entry.
2. The four Ps underemphasizes the importance of building a convincing case to explain the
superior value of the solution being sold (I.e., not enough time is spent educating
customers on why the offering is needed).
If the four Ps is no longer agile enough to work for modern businesses, what framework should
entrepreneurs and marketers look toward instead?
According to Eduaro Conrado, Chief Marketing Officer for Motorola and one of the authors of
the HBR study, business owners should look to the S.A.V.E framework as they craft and define
their unique offering.
Too often, businesses get too caught up in the features, functions and technological superiority of
their product over the competition.
The harsh reality is that none of that matters to customers because all they care about is solving
their problems.
If your products’ features help a customer solve their problems then they will care, but if you're
building a product or service based on features and not based on customer needs, you're working
backwards.
Don't let your product developers (or even yourself) get caught up with needless features,
product additions and "improvements"—if the great new thing is not going to help your
customers out in a serious way, it's nothing more than bloat.
The key here is not to disseminate your "home base" (your store or website), but rather to create
a cross-channel presence that considers a customers’ entirepurchase journey, not just where they
seal the deal.
This idea deals with product promotion, but also goes far beyond it; for example, Help Scout’s
presence on Twitter has as much to do with providing great customer service through fast
answers as is has to do with promoting our articles andresources.
Customers want your business to be accessible. They want to know that your support will have
their backs. To achieve this, they need to see you engaging with other customers to get a sense
that you'll be there should something go wrong.
Do customers care about your price in relation to your production costs, profit margins and
competitor's prices?
Sure, customers have concerns about price, but that comes after their concerns about value. Are
you clearly articulating the benefits of your offering relative to your prices?
If you’re not, you should be. Research from Stanford University shows that comparative pricing
is often a horrible way to frame your prices, and numerous additional studies on "context
pricing" reveal that perception of value is far more important to customers when accepting
higher price tags.
The old four Ps model doesn't fundamentally encourage this need to build a robust case for
showing customers why your business is offering a superior value versus the competition, and it
places too much emphasis on the literal price of the product (or service).
Businesses today can act as "entreproducers," providing current and potential customers with
information relevant to their interests to create a sense of familiarity and trust long before a
purchase is even made.
For a relevant example, you need look no further than the article you're readingright now; in fact,
the entirety of our blog is focused on customers’ needs and not our own.
We write about relevant content that our customers want to read, such as building customer
loyalty programs that actually stick, how to create "frugal WOWs" for small businesses on a
budget, and the specific tactics we used to increase our email response times by 340 percent.
The customer of today has far more say in the business-customer relationship, and it's high time
for businesses to start embracing frameworks that care more about what the customer wants.
The S.A.V.E. framework allows businesses to keep this mindset at the forefront of their
operations, acting as the centerpiece for this new solution-selling strategy.
The businesses who choose to ignore these warnings do so at their own peril!