Today’s 4Ps of Marketing

One of the first things that one learns in any B-School is the Kotler 4Ps – Product, Price, Promotion and Place. While broadly, this still stands for a lot of businesses, I do feel one needs to tweak the same given the heightened consumer activism and competition. To me the 4Ps of marketing as it stands today are

1. Profile
2. Profit
3. Personalisation
4. Permission

Profile: Heterogeneity amongst consumers has led to companies developing multiple variants of their products. Product offerings can vary at the simple feature level e.g. Standard accessories available when buying a car or at the complex platform level e.g. Petrol engines versus diesel engines. In the heady days of the product marketing, Henry Ford spoke about people buying cars in their favourite colours as long as it was black. Unfortunately, the same confidence would probably not work today given that consumers have over 50 makes of cars to choose from, not counting the multiple variants with each make. So if you don’t have a product offering for a particular consumer segment, you can wave that segment goodbye forever.

Profiling thus becomes relevant where the entire product strategy gets revolved around consumer profiles – from the macro-level segmentation based on demographics to the micro-level segmentation based on attitudinal and behavioural attributes of consumers.

Profit: Moving beyond just pure price and accounting profit, P for Profit refers to the value added to both the organisation and the consumer. This value in turn is based on such seemingly abstract but mathematically derivable concepts like customer life time value, brand switching costs and attrition propensity.

Personalisation: One message for all, that’s the general principle of mass marketing. However, we know very well that different people read and understand messages differently. They perceive value differently and there fore have to be communicated uniquely. That’s Personalisation. So consumers can be evangelised or scared or urged to buying Life Insurance for savings, protection or tax deductions respectively.

Permission: Finally, today, everybody is busy. They don’t have time. So if you want to do business with them, you need your customers to allow you to talk to them at their convenience. The days when one had to trudge to bank branch between 8:30 p.m. and 2 p.m. to withdraw cash have gone. Now, to maintain your customer base, the bank has to go to the customer through ATMs, Mobile phones or the Internet.

So that’s my take on the 4Ps of marketing. Let’s discuss.

The Impact of Human Irrationality in CRM success

Three different CRM gurus talk about the human side of making CRM a success (looking at different aspects of the business)

Bob Thompson writes about the arrogance of salesforce.com

There’s a fine line between confidence and arrogance, and I think Benioff crossed it when salesforce.com went public. A few million dollars can change anyone, I suppose. Salesforce.com now posts recruiting ads in the newspaper looking for candidates who want to “change the world.” SFA on the Net will create world peace?

Paul Greenberg writes about a personal story in his blog about his visit to the hospital for a biopsy. He describes how the processes put in place by hospital regarding interaction of the staff with the patient’s near and dear ones have evolved keeping in mind the humanness of all transactions. The need to smile, offer comfort, etc. while the family members wait outside the OT is not done robotically but out of human instinct. The staff would have been probably given a one-line instruction on this – manage the patients and their retinue.

Seth Godin writes in his blog about CRM conferences and sales pitchs - facts or emotions

Human beings are irrational. Change agents (like you) can fight that and obsess about presenting more and more facts, or we can embrace it and make change happen.

Seth talks about boring conferences (something we need to keep in mind for our event next year)

Conferences are designed to get average people to change their behavior. By “average”, I mean typical—the masses, the center of the bell curve. That’s a sensible objective. By definition, most people (in any given population) are in the middle of that bell curve. Change them and you’re golden.

If this group would learn, take action and make things happen with just a memo, you wouldn’t need to have a conference. But we end up being flown on average planes to average hotels to sit in average conference rooms and hear average speakers doing presentations filled with bullet points. And it’s all beyond reproach.

People are irrational and they usually make decisions that have nothing to do with facts. And yet we spend most of our time improving our facts and very little concerned with the rest.

Emotions or irrationality in human decisions was experienced in a telecom churn management exercise. After building a churn model and identifying customers with a high churn propensity, campaigns were conducted via variety of channels. It was noticed that while responders as group showed lower churn rates than average, non-responders churned even more, more than those customers who were not part of the campaign at all, including a control group.

On further investigation, it was found that the receipt of a marketing communication in fact triggered the customer to actually cancel his account and move to different subscriber. The motivation to churn was latent in most of these customers and the campaign in fact provoked them to take a decision, usually what they had already planned – to churn.

Understanding human psychology and irrationality – the call to integrate the softer human aspects of behaviour and overlay them on the robotic CRM processes.

All Marketers Are Liars

Seth Godin’s latest book “All Marketers Are Liars” has spawned his new blog. There are some free excerpts of the book available. The blog has instances of what Godin calls “marketing lies”. However, it seems to have been abandoned now. The last post is dated July 28th 2005.

There’s a lot of use of the term “worldview” in his book. Marketing is about telling a story that would appeal to the prevailing “worldview” of the audience.

Looking up “worldview” in the dictionary, I get the following

1. The overall perspective from which one sees and interprets the world.
2. A collection of beliefs about life and the universe held by an individual or a group.

Source: answers.com

So, in effect, what Seth Godin is implying is that marketers make up stories and arguments that fit to the audience’s worldview and therefore gain acceptance. Which means, if the general worldview is that the organic and herbal stuff are good, then soap manufacturers have no hesitation to add some green colour to their products and market it as “New Herbal whatever”.