Dumping the marketing mix is tough. It's like replacing well-worn shoes or pair of jeans. When something is comfortable, it makes it even more difficult to toss it aside for something new that could take years to break in to the point of comfort.
However, we are at a point where we need discomfort because comfortable is not working.
We are all familiar with the marketing mix: Product, Place (i.e. Distribution), Price and Promotion. It is drilled into our heads in college and it is reinforced with corporate structure. The problem with the marketing mix is that it does not consider the customer, it only considers the product. Perhaps with the advancement of technology, we should have better predicted that a 58-year old concept might require rethinking.
Thought leaders like Bob Lauterborn, Philip Kotler and Koichi Shimizu have argued for years (since the mid-90s) for a customer-centric model known as the Four C's: Customer, Convenience, Cost and Communications.
The Four C's function like this:
- Customer: How can you satisfy customer needs or wants? It is virtually impossible to sell whatever it is you want to make (even Apple can't do this.) You must sell what people want to buy (this is what Apple does best.)
- Convenience: It doesn't matter how or where you want to distribute your products and services. It only matters where people want to buy them. If it is not convenient to buy, they will go elsewhere.
- Cost: Customers care about the cost to satisfy their needs and wants. They do not care about the cost of your raw goods, manufacturing and margins that leads you to a price that satisfies you or your shareholders.
- Communications: Is your message relevant to the customer? If not, they will ignore you. Are they reciprocating with an action? If they are but you are not, they will move on to someone who will.
Determine the Four C's Before the Four P's
I don't think marketers are ready to shift away from the marketing mix-it's what is taught as marketing theory. Until marketing textbooks make the move from internally focused to externally focused marketing (which I am all for, by the way), it will be what new marketers understand and the cycle will never be broken.
I would like to suggest that the Four C's become the precursor to the marketing mix. Figure out first what it is customers need and/or want and then satisfy it. The beauty of customer-centric marketing is that a company is continually providing products and services that satisfy customers, which leads to loyalty.
People say, "Customers don't know what they need." I disagree and I think it's an excuse. People-especially business buyers-always know what they need or want. The challenge is that they don't always vocalize their needs and wants and if they do, it's often not in an "easy to lasso" manner. That's why listening has become very important in business. It's also why marketing is a science.
There's Been A Power Shift
Mass marketing was designed to sell mass-produced products and the marketing mix developed in the early 50s and 60s made sense: top-down and inside-out. The norm was management-decided products and push communications and, unfortunately, that's how many companies still operate today.
With the advent of the computer, Internet and now social media, it is almost impossible to keep one's marketing head buried in the proverbial sand. Times have changed, customers have gained control and they aren't going to give it back.
The Four C's in Financial Services
Since I am have really simplified the Four C's, let's look at how this works in one of the most regulated industries, financial services.
- Customer: The need for investments that support green and sustainable causes I believe in
- Convenience: The ability to invest and trade anytime, anywhere
- Cost: The chance to invest with low minimums and without hidden fees
- Communication: The opportunity for online two-way communications with financial advisors
- Product/Service: Green (Green Century Funds) and Sustainable Funds (Calvert Investments)
- Place: Online and mobile investing and trading (E*Trade)
- Price: Low minimum accounts without service fees (Charles Schwab)
- Promotion: Two-way communications via social media (Vanguard)