Rethinking the 4 P's

Richard Ettenson, Eduardo Conrado, Jonathan Knowles

In the areas of sales and marketing, more and more people are migrating to the SAVE model from the Four P model.

It’s time to retool the 4 P’s of marketing for today’s business-to-business (B2B) reality. As a framework for fine-tuning the marketing mix, the P’s — product, place, price and promotion — have served consumer marketers well for half a century. But in the B2B world, they yield narrow, product-focused strategies that are increasingly at odds with the imperative to deliver solutions.

In a five-year study involving more than 500 managers and customers in multiple countries and, across a wide range of B2B industries, we found that the 4 P’s model undercuts B2B marketers in three important ways:

It leads their marketing and sales teams to stress product technology and quality even though these are no longer differentiators but are simply the cost of entry.

It underemphasises the need to build a robust case for the superior value of their solutions.

And it distracts them from leveraging their advantage as a trusted source of diagnostics, advice and problem-solving.

Shifting to SAVE

It’s not that the 4 P’s are irrelevant, just that they need to be reinterpreted to serve B2B marketers. As the accompanying chart shows, our model shifts the emphasis from products to solutions, place to access, price to value and promotion to education — SAVE, for short.

Motorola Solutions, a pioneer of the new framework, used SAVE to guide the restructuring of its marketing organisation and its go-to-market strategies in the government and enterprise sectors. Along the way the firm identified three requirements for successfully making the shift from 4 P’s thinking to SAVE.

First, management must encourage a solutions mindset throughout the organisation. Many B2B companies, particularly those with engineering or a technology focus, find it difficult to move beyond thinking in terms of “technologically superior” products and services and take a customer-centric perspective instead.

Second, management needs to ensure that the design of the marketing organisation reflects and reinforces the customer-centric focus. At Motorola Solutions, this led to the dramatic re-organisation of the marketing function into complementary specialties, allowing focus on each element of the SAVE framework and alignment with the customer’s purchase journey.

And third, management must create collaboration between the marketing and sales organisations and with the development and delivery teams. Motorola Solutions required that specialist teams concentrate on solutions and coordinate their approaches to specific customer needs. This ensured that functional boundaries did not determine the firm’s solutions.

The B2B marketers who continue to embrace the 4 P’s model and mindset, risk getting locked into a repetitive and increasingly unproductive technological arms race. The SAVE framework is the centerpiece of a new solution-selling strategy — and B2B firms ignore it at their peril.

  

Step by step

Instead of PRODUCT, focus on SOLUTION: 

Define offerings by the needs they meet, not by their features, functions or technological superiority.

Instead of PLACE, focus on ACCESS: 

Develop an integrated cross-channel presence that considers customers’ entire purchase journey instead of emphasising individual purchase locations and channels.

Instead of PRICE, focus on VALUE: 

Articulate the benefits relative to price, rather than stressing how price relates to production costs, profit margins or competitors’ prices.

Instead of PROMOTION, focus on EDUCATION: 

Provide information relevant to customers’ specific needs at each point in the purchase cycle, rather than relying on advertising, public relations and personal selling that covers the waterfront.

(Richard Ettenson is a professor at Thunderbird School of Global Management. Eduardo Conrado is a senior vice president and the chief marketing officer at Motorola Solutions. Jonathan Knowles is the CEO of Type 2 Consulting.

© 2013 Harvard Business School Publishing Corp.)

 via The Hindu, 16:01:2012 

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