Beware of the Fifth ‘P’

by Peter Thorpe

You can’t survive in the new millennium using the same marketing strategies you were using last century …

The first thing they teach you in marketing courses is the importance of the four ‘Ps’. They are the:

  • Product (or service, you sell)
  • Price (what you sell it for)
  • Place (where you sell it from)
  • Promotion (how you promote it)

The four Ps have been around for a long time and they are just as important today as ever. However, there have been some dramatic changes to the way they impact on business. Let’s take a look:

The product ‘P’

Most people over emphasise the importance of product quality.

Don’t get me wrong. I’m not saying you don’t have to have good products. I’m simply saying that in today’s competitive environment, good products and good service are merely the entry price into the marketplace. If you don’t have them, you won’t be in business for too long. Simple as that!

And, while it definitely helps to have great products, be warned-the marketing history books are full of companies that had superior products but failed to gain market dominance.

Take the Sony Betamax VCR, for instance (RIP) or in more recent times, there’s the Macintosh computer.

The Macintosh did virtually every-thing that Windows 95 did back in 1987. They had the product eight years ahead of Bill Gates, yet they now have less than five per cent of the world market.

Why?

Because Bill Gates is a better marketer. And good marketing is all about selling the sizzle not the sausage!

The price ‘P’

It used to be that you traded off price against convenience and service. But with people’s ability to buy direct and eliminate the middle man, it is becoming increasingly difficult to compete on price alone.

‘Disintermediation’ is the new buzz word for the year 2000.

What does it mean?

Simply this-if you market goods or services that you don’t create yourself, you are an intermediary between the end user and the supplier. If the supplier can eliminate your services and sell direct (for instance via the internet) they don’t need you anymore.

Welcome to disintermediation!

Sound a bit futuristic?

Well, it’s already happening all around you. In businesses such as travel, computers, insurance and even motor cars. Is your business next?

The place ‘P’

This ‘P’ is changing more dramatically than any of the others. With the introduction of the internet, mobile phones, laptop computers, satellites, etc., the place where you do business is becoming increasingly irrelevant.

The other day I rang what I thought was a local telephone number to get some technical support on a computer program. I got chatting to the person on the other end of the phone and it turned out she was sitting at home in Chicago and her local time was 3AM! The company has found it is cheaper to pay the ISD phone charges than it is to recruit, train and house people in offshore countries. Only a few years ago this would have been totally impractical.

How long since you did a review on your place of business?

The promotion ‘P’

Promotion has always been the hardest ‘P’ of all to get right.

Lord Leverhulme, the head of Lever and Kitchen the soap powder company, best summed it up when he said, “Half of all the money I spend on advertising is wasted but I don’t know which half!”

Today, he would be considered an optimist. Most companies would be delighted if half of their advertising worked or even a quarter of it!

It has been estimated that as much as 95 per cent of all the money spent on advertising is wasted. And, little wonder.

The average person is now subjected to over 2,000 advertising messages a day. It comes in the form of radio ads, TV, newspapers, bill boards, bus sides and even the backs of toilet doors!

Add to this the Internet and other distractions that are pulling people away from the mainstream media in droves and you can see the dilemma marketers face in the new millennium.

How do you get your message across?

The fifth P

This is where the fifth ‘P’ comes in — your:

Point of Difference.
What is it that sets your business apart from the rest? What do you do that is unique or different to your competitors?

It’s becoming increasingly difficult to find one. And, as soon as you do, your competitors will be saying, “Me too!” We are facing a product differentiation crisis. And with globalisation, the Internet and increased competition, we need to find our Unique Point of Difference now, more than ever before.

What’s yours?