McCarthy’s Four Ps of Marketing: a Product of the 1960s but More Relevant Than Ever
Business schools still teach the theory of E. Jerome McCarthy’s four Ps of marketing as a foundation for solid strategy and planning. The product, price, place (sometimes called distribution) and promotion model emerged in his seminal Basic Marketing: A Managerial Approach (1960). Given the political, social, economic and technological changes of the past 60 years, are the four Ps still relevant to our work as marketers?
Yes. And I would argue that while I think marketing leaders have lost sight of the four Ps amid distractions and short-term thinking, they are not only relevant but needed more than ever to guide the growth of our organizations in challenging economic times.
Email open rate is not an end in itself
The great evolution and power of the digital marketing specialties have provided marketers and business leaders with lots of data to indicate their success and measure their marketing performance. But data can be both insightful and a distraction.
In my consulting practice, we know email open rates are not a sign of engagement. They are a sign that your emails broke through and got the attention you targeted. That’s not the same thing.
The Canadian Marketing Association’s CEO, John Wiltshire, said something similar in his Strategy article “Is Marketing in Trouble?” Under “It’s about impact, not self-actualization,” Wiltshire encourages marketers to work the top end of the funnel because it’s worth it and will pay off in the long run. I couldn’t agree more.
It’s like the marketing profession has broken itself into parts to be useful. With his theory, McCarthy was in fact responding to the marketing theory of his day, the “functional” theory of marketing. While not the same as our situation today, it certainly shares basic concepts with what we see now.
I answered yes when I read the title of Wiltshire’s article: marketing is a little in trouble. But the solution will come when client-side marketers regain control of the parts and start looking at the whole. And I think this is what McCarthy was getting at with his managerial approach to marketing.
It's not all digital's fault
It is trite to say that digital is to blame. Lots of economic and global business pressures, along with the availability of small pieces of performance data, influence a general pattern of short-term, or reductive, thinking.
For instance, I think a couple of trends, which I overly generalize here, that I’ve seen over my career in Canada have played a role in our losing sight of the strategic value of marketing to a business or business unit.
First, the training ground of holistic brand management – the four Ps – that underpinned our profession eroded with the decline of the packaged goods brand manager’s role through the late 80s and 90s (with responsibility often centralized offshore).
Second, having started my career as a retail and commercial product manager at a large bank, I can see the temptation of the service sectors (which dominate Canada’s economy) to separate the functions of the four Ps. I was a product manager, but the real marketers were in the marketing and communications team, interacting with external agencies. I was responsible for the product and price (sometimes), but not the place (owned by the internet or branch groups) or promotion.
Here’s a telltale sign of a fundamental flaw in marketing that clients, agencies and consultants can all agree on: the old trope that clients don’t deliver a useful brief to their agency. Every agency person is nodding at that statement.
And they’re often right. I ran an integrated marketing and communications agency for seven years and know that clients did not often enough have a command of the fundamentals required to get the best from their marketing agencies.
What's old is new again
These and other factors have contributed to making marketing less of a business or managerial approach and more just a “creative” function. We are too often seen as leading the process to get to great execution.
But I see some organizations pulling the parts back into a whole again. For instance, the trend of chief revenue officers taking hold of – yes – product, price, place and promotion is encouraging. But I think the CMO needs to be the CRO too, with full control of everything that influences a business’s or organization’s products and services in the marketplace.
I also see evidence of the tide turning with the emergence of new types of service providers to support clients ready to re-engage and reclaim the business fundamentals that will drive their long-term success. These fundamentals are the four Ps. It’s boring, but they still work.
We must never forget that marketing is the profession of organizational growth, not simply email open rates or share of voice. We make our clients grow in so many ways: more influence, more revenue, more relationships, more opportunity. This is a powerful business discipline.
What do you think?