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Marketing strategy has changed and most likely because the old 4Ps (Product, Price, Place, Promotion) we learned back in school were no longer enough. During the 80s, this concept evolved to the 7Ps (adding People, Process, Physical Evidence) but it never really caught on in the world of trendy planning systems.
It is time to go back to school, refresh our thinking on these important marketing strategy elements and apply them to today's market. Even supplementing your other planning tools as needed. This post explains why the 4Ps fall short, how the 7Ps offer a better approach, and what you can do about it. It’s time to make sure a business strategy includes these important elements.
It's time to get true marketing strategy back into the planning process and not just relgated to tactical campaigns.
What Happened to the 4Ps
I was recently talking with a new client and I was expressing to him that his five year plan was missing some key elements related to his product positioning, his price strategy and it was pretty clear he was not in tune with his customers needs.
He quipped, “Whatever happened to those 4Ps of marketing?”
I really wanted to jump on my soapbox and share how most people have conflated marketing with advertising and true marketing strategy is a missing element of most plans. I decided not to jump on my soapbox, much… and I will hold the topic for another blog.
At any rate, remember the 4Ps? Product, Price, Place, Promotion – the marketing mantra that was an integral part of an overall business strategy. E. Jerome McCarthy introduced them in the 60s, and they were game-changing and were the anchors of any business strategic plan. But the world changed and the 4Ps were no longer sufficient. Enter the 7Ps.
The 4Ps Got Upgraded and You Should Pay Attention
The 4Ps (Product, Price, Place, Promotion) provided a framework for businesses to understand and manage the key elements that influence their ability to satisfy customer needs and achieve organizational goals.
Unfortunately, the traditional 4Ps model did not fully capture the complete picture. Especially since it didn’t even consider the customer and their needs. Bernard H. Booms and Mary J. Bitner recognized this limitation and expanded the marketing mix to include three additional Ps: People, Process, and Physical Evidence. This expanded framework, known as the 7Ps, is particularly relevant for businesses where the interaction between the company and the customer is more significant than just a product or transaction. This is even more important in the omnichannel world we live in today.
One example, you may have experienced is that a trip to Costco is not just about product and price. We all know the experience of the samples and the $1.50 hotdog at their food court. It is no longer just shopping, it is a Costco Outing.
Another example is that Lexus transformed buying and servicing a vehicle. It is no longer just about the transaction. The experience at the dealership and the process for buying a vehicle has forever changed.
What are the 7Ps
Here’s a quick recap of what is included in the 7Ps.
- Product refers to the goods or services offered by a company. It encompasses aspects such as design, features, quality, branding, and packaging.
- Price is the amount customers pay for the product or service. It involves decisions about pricing strategies, discounts, payment terms, and value perception.
- Place (or distribution) concerns how the product or service reaches the customer. It includes channels such as retail stores, online platforms, wholesalers, and logistics.
- Promotion encompasses the communication activities used to inform, persuade, and remind customers about the product or service. It includes advertising, public relations, sales promotions, and personal selling. In today’s world it is heavily weighted by social media to include influencers and user generated content such as reviews and social posts and comments.
- People refer to the employees and other individuals who interact with customers. Their knowledge, skills, attitudes, and behavior significantly impact the customer experience. This is the one definition I think is short sided. See more about this below.
- Process refers to the procedures, systems, and workflows that deliver the product or service. It includes aspects such as service design, standardization, customization, and efficiency. Ordering, delivery, service and returns – everything needs to be smooth. Make it easy for the customer.
- Physical Evidence refers to the tangible elements that support the service. It includes the environment where the service is delivered, the appearance of staff, and any supporting materials.Your website, packaging, store, even employee dress. It's all part of the experience, and it communicates your brand. First impressions matter.
The 7Ps framework provides a more comprehensive approach to marketing, emphasizing the importance of customer service and the overall customer experience. It really gets back to critical components of a company's overall strategy.
Customers buy experiences, not just products. The 7Ps let you manage that experience. Ignoring them is like navigating blindfolded.
What’s with the People?
The one change I would make is that the “P for People” needs to include customers. Who are you focusing the 7Ps on, why would they do business with you vs. others. How do they make buying decisions? Without the customer insights does all the work you do on your 7Ps even matter?
Why This Matters Now
There has been a massive influx of planning tools that many small to mid-sized businesses have been implementing the past decade. The problem is that most planning tools have not integrated some of the most important strategic marketing concepts into their approach.
Can you really put a 5 year plan together when you don’t even think about the customer and their buying decision process?
Actions to Get Started
- Start: Do a 7Ps audit. Look at everything. Talk to customers. Where are you strong? Where are you weak?
- Stop: Stop thinking in silos. Stop neglecting the human element. Stop underestimating smooth processes and good first impressions.
- Continue: Keep innovating. Keep listening to customers. Keep refining your mix. Adapt.
The 7Ps are practical, not just theory. They're key to success today. It's about the whole
