The 5th P in Marketing Options

[bwelford]

It's early in the new year to have a new and important concept come up, but I believe the 5th P in Marketing is exactly that. I guess I missed it the first time round because apparently Gallup had this idea back in 2001*. Well it's never too late to think about something very fundamental.

<added>* It was in an article only available to paid-up subscribers to the Gallup Management Journal.</added>

[Caissa]

Hi Barry,

He got the 4 "Ps" wrong:

Price, promotion, place and PRODUCT not position. So now do we have 5 "Ps"?

In 2004 we found a new planet. In 2005 we find more "Ps".

And they say there is nothing new under the sun :shock:

[Black_Knight]

People are the field, target and Framework for the entire field of marketing, and are thus above and beyond the 4 Ps.

Also, this piece highlighted the other difference, in that in his version the 4 Ps are
Price, Promotion, Place and Position. In the version I learnt and adhere to, the four are Product, Price, Place and Promotion. I adhere to that because 'position' is simply a factor of the other Ps. Your position in quality is determined under Product. Your position in value is determined by Product and Price. Your position in geography is determined by Place. Your position in mind-share is determined by Promotion.

[bwelford]

I agree, Caissa and Ammon, that the 4 P's did not include Position. Product, Price, Place and Promotion - that's the classical 4 P's of Marketing.

I think, Ammon, Gallup was trying to say something different in introducing the 5th P. Of course Marketing is always about customers (or People). However I think there's an evolution of ideas here.

You might say the first step is to move from being Product-Driven to Customer-Focused. The approach here is trying to think what Customers might like or need and tuning your 4 P offering to those Customers.

I suggest the next step is then to move to Customer-centric from Customer-Focused. Customer-centric means putting yourself into the customer's shoes and viewing everything from that customer perspective. What is that typical customer looking for? How will they perceive the totality of what you are presenting to them? How does that compare with the totality of their perceptions for each of your competitors?

I think Gallup is moving the discussion on to something completely different. It's akin to Stephen Covey's 8th Habit: From Effectiveness to Greatness. Covey is pointing out that people are individuals with views and they want to be consulted and involved. An organization can even less than before treat people as cogs in the business machine. This is particularly true for those in the Knowledge or Information business.

Gallup was pointing out that this also applies to the customers. They're all individuals with points of views who do not want to be treated as a 'mass market'. So if the individuals in the organization are in some way dialoguing with the individuals who are customers, then you'll have a stronger marketing process. So it's no longer B2B or B2C but P2P. That's not Peer-to-Peer but People-to-People. It's a mind-blowing concept if you can figure out how to apply it to your business. To an extent it's the reason why small and medium-sized companies will often win out over the mammoth companies.

[thirstymoose_2000]

Hey Ammon, I liked the reply you left on his site.

Really, I don't know anything about this guy but it is just a given that marketing is about people. The very fact that he didn't even know what the 4 P's are doesn't help his credibilty any.

I tried to post the message below but my post was denied for questionable content??? Maybe he has added a filter since Ammon's post so that it will not allow points of desention.

Within the marketing mix there is the promotion mix. This includes Sales, advertising, public relations and Sales promotion.

There is no need to add people. It is a given that marketing is done by people and is directed at people.

The fact that the tactics may have changed and become digital or that blogs are being used instead of traditional newsletters for example is all symantecs.

CRM? Community? Relationships? These are hardly new marketing ideas.

Just more useless marketing buzz.

PS - you got the four P's wrong.

[Black_Knight]

Yup, looks like some error in his blacklist checking script, sadly, so no chance to continue the discussion there at this time. I myself tried to post a follow-up earlier and could not.

I'll put what I would have said here for now, and will try to copy-paste it over later if the error can be resolved.

Thanks for your reply to clarify your points, Dana.  Respectfully, I still find myself unable to agree, although we do have some obvious common ground and agreement beyond our perspectives over the central premise.

I hope we may yet grow closer still in agreement, or at the very least, provide some thoughtful discussion of our respective viewpoints for others to consider, and ponder.


Our employees are very much a matter of marketing strategy.  Hiring staff to answer the telephones, respond to email, sales people, even an office receptionist are all matters where we obviously choose people to represent us well.  Staff training, uniforms, and communication are ongoing aspects of any business endeavor, even beyond marketing. 

Even if a company has not yet gotten to consciously put this down to branding, they are certainly aware that these folks are the CRM of their business.

With branding and brand building, this always has to start from the inside out.  Your employees must believe and represent the brand if your customers are ever to do so.

Your employees usually are your product, at least to some extent.  Why are products with great service usually more expesive?  Because the service levels are part of the product, part of the expense/costs of the product offering, and thus are reflected in the Price strategy.  Some customers will prefer to have less service - for example, shorter waranties, or less after-sales service - and so have a lower price on offer.

Some aspects of the product are dependant on regional staff, thus again bringing another P, Place into the mix once more.  

How far are you prepared to send employees to perform on-site service or repairs?  What about delivery and collections too?  An outsource provider that is not totally under your control in terms of presentation and training?  Or in-house delivery employees that you may train and equip to present your company - and brand - better?

Service itself is Product.  It is an integral part of the overall offering.  The existing four Ps determine the service you provide, and the role of employees in delivering the product.

Naturally, the most obvious connection between employee choice and the four Ps is often thought to be in Promotion, and ensuring that front-line employees at all levels are aware of all promotions, brand message, etc is critical to this.  

However, I personally would still argue that Product is where this connection begins.  Without employing all of the four Ps through your employees, you would be missing the entire point of the four Ps altogether.

The conclusion surely has to be that the whole framework provides for strategy that incorporates, and indeed is often embodied by, your employees.  Every single one of the four Ps relates to the people within and without.

[bwelford]

Well, B_N and TM_2000, I'm with Dana on this one.

I always like short lists that can be used by practical people as an agenda for what they're going to do on strategic issues. I always had a bit of a problem with the traditional 4 P's, Froduct, Price, Promotion, Place, since I believe it came from all those Product-driven folk. It's all about 'Me' and what I need to do to tune my company as it beams out its message to the world.

If you ran a strategic review session using these 4 P's as the agenda, I think you might well miss important aspects of how you should direct your business. Indeed if anything, the time spent on Place might well be misplaced. In the days when this referred to the physical Location, Location, Location, it had some useful content. You had to put your restaurant in the right place. You had to make sure that your retail store was in an area with sufficient traffic. If we accept that we don't need to mention the Internet since this is a given, then I think there isn't too much to say on Place. Provided you're sufficiently visible on the Internet, then the world will come beating a path to your door. So let's knock out that P for Place in a strategic review.

On the other hand, I see many companies who have not got the message about People. You might say that's not new. 25 years ago there was discussion about the importance of customer service and how your front-line troops were the important players in the marketing process. The important new thing is the power given to individuals by the Internet. The world really is different.

So how can you make sure that your organization puts sufficient emphasis on this aspect of business. I believe Gallup got it right in March 2001. They called it "The Power of the Fifth P". Unfortunately since they only pushed out the idea in a paid-subscription journal, the idea never got the attention it deserved.

Indeed I would even suggest that if you don't have the time to consider all 5 P's in your strategic review, then you might want to drop Place rather than People. There are many operational aspects of a business that don't need to be discussed in defining strategy. They do come up in detailed marketing plans once the general allocation of resources has been set in your strategy setting. Given the Internet, Place may well not be one of the strategic P's.

[Black_Knight]

Barry, I simply can't agree that this is a 'throwback' issue to non customer-centric plans, because the entire rise in 'Marketing' as a field corresponds (and is joined to) the understanding of consumer needs and desires.

Non customer-centric businesses used to just have a Sales department, but those that saw the need to be customer focused embraced the 'new' field of Marketing. The field of marketing is all about the customer - the market. It is about switching from selling what you can make, to making what you can sell. In short, customer-centricity.

Marketing (where understood at all) is the switch of business focus to being customer-driven and customer-focused.

If the four Ps of marketing were, as you claim, product-driven, then Product would itself be outside of the Ps, just as People are. If the product drove the rest, then it would not be something you adapted. It is people that drive it.

But let's go back a step. Without People, both those within your company (including whoever would be running the marketing anyway) and those without that you hope to make into customers, how could you have a product at all?

No, I have to reaffirm that the entire field of Marketing is based on customer-centricity, and that any who don't already embrace that have not actually grasped the core principle of marketing at all.

Product - requires that you already know what people desire.

Price - requires that you know how much they desire it, and what they'd be willing to pay to have those desires met.

Place - which is still vital to any business, without any exception to internet ventures, determines how much you'll pay for services, materials, premises, taxes, employees, recruitment, holidays, bonuses, shipping, and far more. Even companies providing purely virtual products, that need no delivery but the internet, will still have to pay taxes, have premises, may need to recruit, or expand, and all of these will be determined by Place. Place may affect whether particular market groups may buy from you at all, as many people prefer companies that they know are bound to the same laws they understand, may prefer to buy with nationalistic pride, and may even prefer local companies that they know they can call upon more easily if anything goes wrong. Place therefore requires that you know how the physical location of your company will affect its costs and attraction to people.

Promotion - requires that you know how to reach people. Where to talk to them, how to talk to them, and how to get them to talk back to you.

People are not one of the four Ps. They are the ground beneath, the sky above, and the vey atmosphere that permeates and surrounds all that the four Ps are based upon and made to do. They are beyond the four Ps.

[bwelford]

As you know, Ammon, we're both singing from the same hymn-sheet. It's just that you're singing from the front side and I'm singing from the back side.

I agree entirely that what you describe is what Marketing should be. However I would suggest that less than half of the Marketing people practice what you are preaching. I joined my first Marketing department in London over 40 years ago. It was in the biggest advertising agency in the world at the time. Marketing meant trying to figure out how to devise advertising campaigns that would successfully gain brand recognition and help increase sales. Marketing at that time was often a parallel department to sales, as it was in the major chemical company I joined some 8 years later here in Canada.

There always used to be this debate. What is marketing? Is it just a parallel company function to sales? In other words, it's the department that handles publicity and all the sales support functions. Or is it instead a business philosophy that determines the total company strategy? I would guess that there are still quite a percentage of companies where it's not the company philosophy but is rather just one of the departments.

In either case, I think very many companies will find they do different strategic 'stuff' if they break out that P for people and do some thinking about it. How are they going to capitalize on the individuality of their own company team? Each one of them wants to be able to have their voice and influence what the company does to be successful? How can they connect with all the individuals in their market place who want to be treated as individuals?

Unfortunately a lot of the guru stuff becomes the content in the CEO's quarterly gung-ho speech to whip up the troops. It's all blah-blah. It sounds as though they will treat the individuals as grassroots leaders or whatever. However the actions and company policies show what it's really like. You're a cog in the machine and robot-like you should follow through the prescribed steps for your particular job.

The original 4 P's were set up to stop the thinking that you could achieve anything by marketing - that usually meant advertising or the P for Publicity. It was an attempt to force people to think through the notion that the Product, the Price and the Place were also important. Interestingly that's a debate that's going on in the Search Engine Watch Forum in a thread called "The Little Engine That Could". It's all about whether Ask Jeeves should use television advertising to help win back some search engine market share.

Interestingly some of the posts have tried to get some discussion going on some of the other traditional P's. For example, several have been on Product. However one of the best entries discussed that 5th P. OK you can say it's all about people. But sometimes you need to have a trigger to force you to put enough attention on what really is the most important P of all.

[DCrx]

Pin dancing aside (the sixth P), it may be time for some examples. The devil may be in the P-tails.

Firms can work the fifth P using astroturfing, or mecenary evangelists-for-hire (astroturf, for fake grass roots support). A recent thread on the Home Cafe

..reviews and posts saying Home Cafe isn't safe; that it is prone to water leakage or electrical fire.
-- Inside Bzzagent

It remains to be seen how or if this will feed back into Product.

The Kryptonite lock debacle. There are multiple Pfailures here, like going the Microsoft route of seeing the event as a chance to sell "upgrades."


Here is Sony Ericsson Mobile:

In one initiative, dubbed Fake Tourist, 60 trained actors and actresses will haunt tourist attractions such as the Empire State Building in New York and the Space Needle in Seattle. Working in teams of two or three and behaving as if they were actual tourists, the actors and actresses will ask unsuspecting passersby to take their pictures.
Presto: instant product demonstrations.
-- WSJ via Oliver Travers

Sounds just like some people have a slightly different take on that fifth P.
-------------------

P.S. Here are some addtions for those (Like Louis) wanting to understand various P factors....

Joel On Software Camels and Rubber Duckies How to form a pricing model. Pricing is one tough P to approach correctly, especially tech and software price points and gap analysis (pricing against competittion).

Marketingprofs adds this...

We often see companies who grossly overestimate or underestimate the value that their product delivers to customers. A recent example is a medical device manufacturer that had developed a new visualization tool that could speed up certain clinical tests up to tenfold. When the product was introduced to the market, it was highly praised by customers and the press, who recognized the power of the innovation. Despite the kudos, sales fell far short of expectations a few months after launch.

....In our view, the problem is fueled by an overreliance on traditional marketing research techniques such as focus groups, surveys and conjoint studies that are unable to answer one critical question: How will my product drive revenue or reduce costs for customers? 

-- How to Avoid New-Product Pricing Traps

MarketingProfs is rather up on focus groups and surveys, and I really am not. why? People lie on surveys and focus groups, often unwittingly.

You may remember how Amazon recently got burned doing price-testing. I occasionally look for innovative ideas in this area, rarely find any. I mean beyond the "we lose a little on each sale, but make it up in volume" dotcom model. The Crux: Hardly anyone has any good idea how to value intangibles -- hence my interest in the techniques of desirability testing.

[kensplace]

p*ss poor preparation produces p*ss poor results

the 6 p's of most things.....

[thirstymoose_2000]

I'm still with Ammon. Adding a fifth P is redundant as the four P's are all about delivering what people want.

I agree that at one time a product was built and then sold. Not so long ago I had a manager who still thought business ran that way, and I'm sure others still exist.

Now (in most cases) a market is researched and a product delivered to that market based on needs/wants. A company's ability to read a market and deliver a desired product is what will make it a success or failure.

You need the right product at the right price available at the right place (includes distribution channels, and other extended definitons). The right Promotion mix must be used to deliver the right message to the right people. The mix as I see it (and was taught) is all about people.

Funny you mentioned brand, because the same discussion could be made about how the understanding of 'brand' has changed over the years and it is now understood in much broader terms. When you once talked about a 'brand' you were speaking about a logo, trademark and colour scheme.

[Black_Knight]

That's an excellent point you bring up about brand, tm2000. As you say, brand was once just about the look of the 'packaging', a logo and recognizable image. It was all about visual image, and only about being recognizable.

These days, brand is much more about intangibles. The mental image more than the visual. Brand is about how we touch people, about the impression we make upon them, both first impressions and lasting impressions.

As such, it is arguably the most customer-centric shift since the introduction of Marketing itself. Branding has shifted from deciding how we want to look, to deciding how we want to be seen. There's a major difference there that can be hidden in the similar-seeming words.

If we were ever really to introduce a fifth P to marketing, it might be best to consider Perception as the best candidate. As such, it would cover means for companies to more accurately perceive their markets, and for them to control how their markets might perceive them.

[Black_Knight]

<off topic>
I dropped Dana a quick note about the problem or bug with posting to his comments, and invited him to join us here if he wishes. Hopefully one way or the other we may yet continue discussing this issue with him.

[DCrx]

Five Ps is so five minutes ago.... The Marketing Mix: 4Ps, 7Ps or what?

...the 7-Ps approach is a valid extension that takes the specific requirements of services marketing into account. What I would consider a valuable extension not only in the context of services marketing but in general is the additional \"P\" of \"processes\": \"How\" a product is produced becomes increasingly crucial to a large number of consumers – just think about cosmetics (animal testing) or cars (recycling).

And yes, 7-Ps does in some strange way make sense. A better base of discussion is who is doing well with the four basic P groups. And who finds them, as the 7-P comments indicate, a mental straitjacket?

On one side we have the expansive interpretation, where whatever happens the original four Ps can be reinterpreted to fit. On the other hand, there are those who might think four Ps are just about right, if we tweak them for the new realities of today. Strangely enough I just saw this with the old "Cheap, Fast Good" triangle diagram on Creative Bits, with the inevitable counterpoint "The Myth of the Holy Triangle."

The diagram, of course, is irrelevant. For our lurking audience, let's go to to an example of another P - Product....

Coke C2 (not to be confused with Coke II) seems to be a failure. Okay, so what? If Coke is hurting for a success, the likelyhood is four Ps is not going to be enough. Had C2, essentially half diet/ half regular, been a hit, probably the existing four Ps ride. If you factor in ....

[list]Dr Pepper, the first spicy soda, is a success, Mr. Pibb from Coke is not.
Mountain Dew, the first high-caffeine citrus soda, is a success, Surge from Coke is not.
Gatorade, the first sports drink, is a success, PowerAde from Coke is not.
Snapple, the first all-natural beverage, is a success, Fruitopia from Coke is not.
Red Bull, the first energy drink, is a success, Coke's KMX -- not.[list]

Well, then, you are probably talking about going metric -- double the number of Ps and add thirty-two. The four Ps are a mental map a rule of tumb, not of physics. When the terrain, by coincidence or not, follows the map, the map is right (four is enough). Where the map is not the terrain you have a couple of options, in this case change the number of Ps. It has little to do with the diagram or rule, strictly speaking.

P.S. To refer back to online marketing, check out C2 Product Launch: How Coke Failed to Integrate Search

[bwelford]

Oh my. What a plenitude of P's. I guess the question is how many of these P's will be Productive.

Perhaps another P can help us. You're all familiar with Pareto I'm sure. He was an Italian economist I believe with, you've guessed it, a Principle. About.com will tell you that:

The Pareto Principle, also known as the 80-20 Rule, states that a small number of causes (20%) is responsible for a large percentage (80%) of the effect.

Well I'm with Pareto on this one. However many P's you have in your list, my guess is that probably three of them will do perhaps even 95% of the work.

IMHO we should go back to basics with the 3 P's of Marketing. My nomination for the three are:
Product
People
Publicity

This is somewhat similar to the NUB of Marketing Strategy that I proposed recently. In fact that would probably be Pareto's choice and dealt with only two of the P's. The N is for Niche (or People). The U is for Unique Selling Proposition (USP which is equivalent to Product). I'm sure that that would deliver the 80% of effect that Pareto talked about.

The B is for Bottom Line, Bucks, Balance Sheet or any other B that relates to cash. In other words you've got to check that you can survive financially while making your marketing strategy grow your company.

If we're down to the 3 P's of Marketing, what would your choices be?

[danavan]

First, my appologies for the 'product vs. position' slipup. Bloggers make mistakes.

The four P's have been around since about 1/2 hour before dirt. No, really, they were formed in the 60's. The original marketing mix had a lot more elements. Neil H. Borden (1965) wrote ”The Concept of the Marketing Mix”, in Schertz, G. , Science in Marketing, Chichester, Wiley, pp. 386-97
Neil H. Borden began using the term in his teaching in the late 1940’s after James Culliton had described the marketing manager as a ”mixer of ingredients”. The ingredients in Borden's marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis.

E. Jerome McCarthy later grouped these ingredients into the four categories that today are known as the 4 P's of marketing

Considering that it's been 40 years since we've reviewed the P's, during which time we've moved from the product driven org. to the knowledge org, and now the learning org - issues which have been pretty universally accepted by now, I'm in favor of a little exploration in the area of the marketing mix.

More to the point, I think that we're seeing a trend here with warrants further inspection. As the old adage goes, once a coincidence....three times a pattern, there are significant events which point to People as a possible P.
- The Cluetrain Manifesto
- The Gallup organization's research on the effects of employees on customer relationships
- Blogging by corporate citizens from Microsoft & others
- Recent research on brand touchpoints & customer service
- The growth of the CRM industry

According to Gallup's original article (want a PDF - send me an email - dana@blogsavant.com)

"Marketing 101 reduces the main determinants of customer loyalty to the familiar Four Ps: Product, Place, Promotion and Price. These are all critical factors, but marketing orthodoxy is myopic, for reasons that are often lodged right in the structure and culture of corporations. The result is that a fifth P is typically left out of the reckoning: People. Specifically, I mean the people who actually deal with the customer during any part of the transaction. The delivery of the brand promise often happens by human agency at the point of sale and proceeds through service, complaint and resale. Yet marketers, who have the bottom-line responsibility for brand health, rarely focus on the Fifth P."

[bragadocchio]

Hi Dana,

It's great to see you join us here. Thanks for adding your voice to this conversation.

I am glad that Barry is putting forth some marketing terms that start with letters other than P. I sort of feel that we're in danger of mixing marketing with Oulipo or the Dogme95 Manifesto.

I found myself trying to come up with other words that begin with the letter P that could describe marketing, and be some helpful guideline for developing a marketing strategy.

Here are some of them:

Promises, perspective, principles, predictability, personality, passion, public.

I'm not feeling the value of the restraint; I guess what makes the four P's work for me is that they are fairly easy to remember, and do provide a good starting point for thinking about how to hold a conversation with People.

I do see the value in exploration of some newer ideas, though. Like the oulipe or dogme95 manifesto I mentioned above, constraints can be limiting, or they can free you creatively. If we limit our marketing strategies to the 4 P's or 5 P's or 7 P's, are we ignoring some possibilities and placing intentional constraints upon ourselves, or are we building a foundation upon which other ideas and approaches can be added? I think that it may depend upon how we approach those guidelines.

[bwelford]

Welcome to the Forums, Dana.

I guess we all have different ways of thinking about things. I tend to be very organized so like short lists and then work hard on each item. Others seem more comfortable with a cloud of ideas out of which some concept or action plan crystallizes. I really like some of the additional P words you added, Bill. Particularly Passion. However if I'm going to get a group thinking about strategy, then I've got to suggest which foot the centipede should move first. That's why I liked Dana's surfacing of the Gallup concept in the first place. I think if you consider the individuality and uniqueness of every person and what you're going to do about that, then you get on to some different thinking tracks.

[DCrx]

If we limit our marketing strategies to the 4 P's or 5 P's or 7 P's, are we ignoring some possibilities and placing intentional constraints upon ourselves, or are we building a foundation upon which other ideas and approaches can be added?

A question might be if the organization didn't understand the people dimension before, will simply adding a fifth P do anything at all. I'd hazzard a guess that, if you didn't get the silent P before, don't bother adding it.
And CRM has been known for standing there, watching as the Cluetrain pulls away from the station. CRM? Try these bookends....

Vendors are ultimately responsible for CRM failures

CRM failures: Don't blame the tools

CRM ranked in the bottom three categories among 25 popular tools evaluated for customer satisfaction.

My fave is Exploding the CRM Myth

This daisy chain of "it ain't my fault" is the central feature of CRM systems, at the same time it is the very essence of bad customer centric strategy. If you thought the productivity paradox was LOL funny, you ain't seen nothing. Let's say we one of the worst features of the tech industry and apply it to CRM, blame the customer. "Companies lacking customer-focused strategies," as ZDNet article puts it. This is wrong on so many levels my mind spins from the humor potential.