The four "Ps." It's hard to get through Marketing 101 without them. If anything was meant to be a foundation of marketing, it's the venerable combination of price, product, placement, and promotion. Now even this theory -- first put forth in 1964 -- is being reshaped. Social media and the customer intelligence available from it have revolutionized even these basic tenets of marketing. In some sense, the four Ps have been completely deconstructed. In all cases, they must be reevaluated.
Even to suggest this will be marketing sacrilege to some. And it has very little to do with the Facebook IPO success or lack thereof. The 4Ps, according to a recent Purdue University white paper for entrepreneurs, represent "a variable you control in creating the marketing mix that will attract customers to your business. Your marketing mix should be something you pay careful attention to because the success of your business depends on it." Heavy words there. But the phrase "variable you control" is now up for grabs. The emphasis is on "variable" rather than "control." And it demands changes to reach the desired outcomes brands need.
Let's take it from the top. Pricing: Social media has had two major effects on how brands price their products or services. The first is testing. Social media is the biggest and best focus group in history. A CPG company testing intent for a beauty care product can learn a lot from customer reactions on social shopping sites. It can also learn from its competitors what those customers currently use.
The second effect is destabilization. Social shopping sites have allowed companies to change pricing based on day-to-day needs or even hour-to-hour competition. Social media shopping sites have set the expectation among consumers that prices will change and they will drop if they wait long enough. Recommendation: Use the customer intelligence available from social networks before setting prices. Discounts will always work, but they are a short-term strategy. Regardless of the vertical, pricing models need stability.
Now, let's talk product. The very basis of product development and product redevelopment have been changed by social media. If you don't believe that, listen to NPD Group analyst Karen Grant, quoted in The New York Times on May 2: "It's literally reshaping how the market is driven. Social media is changing how products are being developed, marketed, and launched." In January, for example, Pantene, a division of Procter & Gamble, brought back three hair-care product lines that had been discontinued -- Anti-Dandruff, Ice Shine, and Silver Expressions -- with a "Back by Popular Demand" marketing campaign that included a 1980s-theme video (made in collaboration with the humor website Funny or Die) and a Facebook giveaway. Recommendation: Proactive use of customer data and predictive measurement of customer affinity for categories and brands reduces the risk involved in rebranding and product development.
Let's go back to that Purdue University study. Placement, it says, means "the right product at the right price available in the right place to be bought by customers." Obviously search engine marketing has had a huge impact on placement. Placement has a lot do to with where your brand shows up on a search page. It all changes when social media is factored in. Sites like Foursquare and Pinterest have completely redefined the concept of placement. In fact, some of the newer social media successes, including Yelp, are only successful and useful to marketers if the product is placed effectively on the map, screen, or page. Recommendation: Know the outcome you want before defining "placement." Some of the new social media networks are stronger at reaching specific customer segment profiles. Pinterest, for example, has a high affluent women quotient. Be clear on your desired outcome, and ask the right questions about the outcome if you don't have the answers. Is your brand after more site traffic from that audience? Or is the desired outcome direct purchasing?
Promotion has actually become one of the least revolutionized areas in social media, but it is a necessary tool for branding. No brand would think about promoting a product without a social media strategy in this current climate. But promotions need to change. They need to be structured in such a way that they will generate the engagement and kinds of social media intelligence that will inform the other three pieces. Intelligence about product should inform pricing. That combination of intelligence will dictate placement. Recommendation: Utilize social media intelligence to guide your promotional plan, customizing your efforts based on your target's actions and behaviors.
The 4Ps are still relevant. I suggest that we make them more relevant by adding a fifth P: people. "People" needs to become the first P, as brands need to understand their audiences first.
Social media is still the ultimate focus group. Let's use another hypothetical to show this. If Pepsi wants to introduce a new flavor or a new package, it has a Facebook community of more than 8 million people. It has more than 634,000 Twitter followers. Like so many other brands, it has a built-in audience that doesn't equal sales, but does equal the potential for customer intelligence. It's people first. It's the P that comes before pricing, product, placement, or promotion. By adding people to the 4Ps, we're not toying with tradition. We're updating an essential equation for marketing success.
Molly Glover Gallatin is the vice president of marketing for Compass Labs.
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"Four Ps in a successful marketing mix" image via Shutterstock.