Basic Marketing Theory: From 4Ps to 4Cs

Since the first time in 1960s that McCarthy summarized different market factors (marketing mix) into 4Ps (product, price, place and promotion), this ‘4Ps’ has been a core marketing theory that was popular in the next 30 years. However, with the development of human society and technologies, 4Ps Theory has been challenged and there was a tendency of transforming from 4Ps into 4Cs (customers, costs, convenience and communication).

1. From product to customers
After 1990s, marketers tended to pay more attention to the customers desire and needs while not just considering about applications and functions of one product as before. Hence, Customers has gradually become the main factor that influences the marketing strategy. As a recent example, APPLE has launched two types of new cell phones — iphone6 and iphone6p. Why APPLE did not design only one phone model for the customers as before? Indeed, one of the reason is for competing with Samsung’s large screen mobile phones; and the other one is to satisfy the consumers those who are preferred to a large phone.

2. From price to costs
This requires marketers to set a rational price by thinking more about customers purchasing cost but not focusing on the company’s profits. After much popularity about iphone4s in China, smart phone flooded through the whole mobile phone market. However, iphone4s is over 5000 RMB that most of customers can not afford it. In this case, Xiao Mi (smart phone developer and seller locally) find a new market to R&D a new type of smart phone with price of 3000 RMB. After this, because of considering the buying power and the costs of the most of Chinese consumers, Xiao Mi has successfully entered into the market and obtain a lot of profits.

3. From place to convenience
This transforming means that companies need to pay more attention to the convenience that how customers get to and finish the transactions (such as free parking and self-help payment). But actually, from my own perspectives, this can happens at the same time. Everyone must know Tesco Express on the London Road in the city center of Southampton where the transportation is convenient and passenger flow volume is also large. On one hand, the ‘PLACE’ can explain why Tesco wants to have stores on this road, but on the other hand, this Tesco Express can create more convenience for the people living around this area who may not be willing to go to Tesco Supermarket far away from the city center.

4. From promotion to communication
In the 4Ps marketing mix, promotion emphasis that marketers need to pass the information of products to the customers while not caring much about the interaction with customers. Here, interaction can also be regarded as communication with customers. In this case, the traditional on-way going has changed into the bidirectional communication. This can help customers engage in the production activities of companies and even influence the construction of customer loyalty. A typical example is P&G’s ‘800 Customer Service Hot-line’ as a pioneer emerged in the US. This hot-line collected nearly 200,000 customers’ suggestions and even some complains to P&G, which has contribute a lot by assisting P&G to make up for the error and to create more rational conceive.

Nowadays, times are changing, online technology has made a great difference of people’s daily lives. 4Cs seem to be hard to explain situation when market shifts the center of gravity to the online area. How the most empirical and rational new marketing theory will look like, it seems that no one can give an accurate answer.