Sunday, February 19, 2012

Did Online Marketing and Social Media Change 4 P’s of Marketing?

All MBA students, marketers, advertisers are taught the 4 (important) P’s of marketing. Invented in 1960s, these P’s have formed integral part of marketing education since then. All elaborate marketing plans for brands and businesses are (or were?) based on Price, Promotion,  Place and Product.

But, with the growing influence of social media and online marketing, have these 4, well at least 3, P’s of marketing changed? Let’s look at each of those in this light:

This P of marketing says that you should price your products or services competitively across distribution channels. But do you really think you can do that when there are so many deal sites and comparison sites? 

Today, price is one of the major factors because of which consumers join social media sites – especially in case of travel. Are companies not forced to let the market decide the price?

Additionally, with Internet, mobiles, social media, it has become very easy for consumers to identify inconsistency in pricing if you have introduced any. This can be very dangerous for the brand image because consumers will immediately find that out and even worse, talk about that more openly and to a wider audience. 

So Price can rarely be of marketing advantage.

With rising costs of traditional advertising and lack of ways for measuring effectiveness, many companies are turning away from costly advertising media like TV commercials or billboards. In past as well, many brands have succeeded without costly advertising and marketing.

For example: With its umbrella marketing strategy, Amul spends only around 1% of turnover for marketing. 

When around 3.5% of revenue is being spent on advertising by fashion retailers, the popular Zara brand spends just 0.3%!

Ferrari, the Italian sports car manufacturer does not spend a single penny on advertising space. They rely completely on special exclusive events, word of mouth and of course social media as their marketing weapons.

Google started advertising only recently and Facebook also did not reach the valuation to the tune of $100B with advertising.

But, with Internet and social media, word of mouth and forming a close connection with customers and users seem to be the key to promotion. Conventional promotion mechanisms are no more being banked on when the world has become such a smaller and well connected place with Internet.

Does place really matter in the Internet age? With so many online shopping sites, eCommerce sites, reviews and social shopping sites, aren’t consumers going on web for shopping? Most of the large stores like Shoppers Stop also have special offers for online buyers.

I think, therefore, the ‘place’ parameter has seized to have significant place in the strategic marketing planning.

So we are left with last P –Product. ‘Product’ definitely has not have changed. No matter what you use for promotion, what price you keep and where you sell it – you got to have a great product.

Yes, but one thing has changed. In this age of social communication and connection, you have to not only make products that meet the needs of consumers but also make them newsworthy. Today the verdict about product on social media reaches the consumer before the company’s advertisement. So make sure your product delivers the value beyond the expectations of the consumer.

Users did not want an iPad until it was built but now they wonder how they lived without it for so many years. The key here is building great products, newsworthy products and enjoyable user experiences. 

I think Kotler’s conclusion “The best way to hold customers is to constantly figure out how to give them more for less.” holds very true – even today! : - )  


  1. This blog is very informative. i wish many people going to like it alone Online Brands Promotion

  2. Awesome Article.
    The 60's concept of the 4P's has definitely changed, altered and modify as per the company's or the product's needs. But these four P's will always be of key concern even if each of their meaning and importance increases or decreases.

    Sneha Vijaykar

  3. Very informative blog. With Internet Place and Price (cost of marketing) is really came down now, because of this we are getting many quality product.

    Thanks for the info.

  4. @Sneha: Glad you enjoyed reading the article :) The 4P's will be of key concern but the definition and approach towards those is certainly changing.
    @Nagesh: Thanks. I agree with you about cost of marketing. I hope companies use that budget for getting a good quality product out :)

  5. Interesting take & quite thought provoking - my view is that the Ps have not changed but the meaning we assign to them should evolve with the times. For instance take Place - it could be said that all this has done is move the store front to the internet. The rules of Place would still apply within that context - how easily is your product found by the potential consumer / website visitor, how is it displayed, which web sites do you want your product to be on - a high volume discount site or a lower volume speciality web store & so on. It's hard to escape the feeling that the rules are changing & those that stay ahead of the curve will benefit.

  6. @Sanjeev: Well said. The 'conventional' definitions now have a different meanings and interpretations.

  7. Interesting article! I think more than the marketing what social media has changed is buying behavior. Social media has added an informed perspective to the buyers by pushing the marketers for transparent ecosystem. Yes,Price has certainly made the market more competitive. However, I will still consider Place as a change of delivery media but channels are certainly more efficient by the use of technology.

  8. @Yogesh: Thanks! I liked your point about more informed decisions. In an environment where communication is more open and honest, the ecosystem has indeed become more transparent.

  9. Those 4 P are very important in marketing and any other stuff and i can't be change.

  10. How informative this article. I enjoyed reading this blog articles. thanks for your good job.

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