The Transformation of the Traditional Marketing Mix in the Digital Agora
It is becoming more and more apparent that we are shifting our focus from traditional to digital in order to effectively grapple with the IT and internet world. In the current landscape, how are you going to rise, capture attention and speak to your customer’s heart?
It is essential to continuously keep up with the emerging trends and adapt to the ever-changing paths that shape the 2020 hatch of customers.
Marketing mix: from 4Ps to 4Cs
Depending on when you dove deeper into the exciting world of marketing, you were either introduced to the marketing mix of 4Ps or the extension of that to 7Ps, which was how I was exposed to it.
Keeping our focus on the classic 4Ps, we know it is product, price, place and promotion.
In Marketing 4.0: Moving from Traditional to Digital, Kotler, the father of marketing, along with his co-authors, introduced us to the sexy twist of the 4Cs — if we wish to endure in the next generation of marketing.
The metamorphosis looks as follows:
- Product → co-creation
- Price → currency
- Place → communal activation
- Promotion → conversation
I will elaborate on the first two elements that define what to offer and infuse them with examples from my day-to-day life as a product lead.
From product to co-creation
In typical product development, we would, hopefully, come up with something based on customers’ desires, after conducting tons of market research. This means weeks or months of work in progress and big designs up front, before the customer ever sees it for the first time to give us feedback.
What happens when you show your product after months of development, and the customer says, “WTF is this?”
Co-creation is the new approach of developing products that will keep standing. This is where you basically bring in your customers from day one, already in the early stages of ideation, and you move into the Agile way of product development through iterations.
In essence, what you are trying to achieve is to minimize the risk when you introduce the product to the market, and increase your chances of successful adoption.
Co-creation additionally unlocks the doors to customization and personalization, which is another part you need to get right, if you wish to survive with a strong value proposition.
In the iterative approach, you start off by having an assumption you wish to validate as fast as possible. This is typically triggered by something you see, e.g., high bounce rate on the homepage. You analyze user behavior and conclude that users probably do not understand the company’s unique selling propositions (USPs), and this is why they do not convert.
Before you start thinking how to completely redesign the homepage or engage in discussions of creating landing pages for each USP keeping your resources busy, you can easily do a quick A/B test, where you simply hide the module exposed to the users. If you observe that the bounce rate remains the same, you already have reason to believe this is most likely not the root cause of your problems.
Another thing you can do is to come up with two design alternatives, and conduct qualitative user testing with 10 users in order to validate whether your proposals are more appealing and may result in higher conversion.
This is one example of many to illustrate how differently things are done in the digital ecosystem.
From price to currency
Typically, one would define a selling price for their product after carefully examining costs, respective competition and a customer’s willingness to pay.
When we are talking about developments in pricing, we refer to shifting from standardized to dynamic pricing. Being able to flexibly adjust your pricing based on what customers are asking for and utilizing to your maximum capacity is key.
Think of when you are traveling. In the hospitality and airline industry, when you are booking a hotel or your flight during the Christmas break or high peak in the summer season, the prices are high-fiving the moon.
During the corona crisis, a sanitizer that typically costs 2€ has made its way up to even 7€ now that demand was so ridiculously high. As soon as the curve is flattened, I am pretty sure the price will go back to normal levels.
In the digital era, pricing can vacillate in the same manner as currency does, depending on multiple parameters.
Place and promotion
As soon as you have concluded about what to offer, it is time to channel your focus on determining how to offer, which always lies within place and promotion.
Distribution channels, so your product is conveniently accessible, as well as communicating the relevant messages to the proper audience through different means, such as advertising, PR or sales promotions, are the heart of those two elements.
When it comes to channel, there is no better example than Uber and Airbnb. Stop and think for a moment how those two have shaken up the taxi and hotel industries in the past years through peer-to-peer distribution. Hence, from place, communal activation was born.
Come to think of promotion, focus has massively shifted from companies approaching customers to social media taking over with customers actively engaging and providing reviews on their experiences, which influence others’ decisions through word of mouth (WOM). Hence, from promotion, conversation unraveled.
Purposefully, I will stick to only a brief description on the latter two elements. For a more detailed analysis, supported by real life-examples, I would highly recommend you consult a product marketer.
Every part of the marketing mix is heavily focused on the customer. The prosperity of your company heavily depends on how deeply you ensure the active partnership of the customers in the commercialization of the product.
Success in the digital world is a two-way avenue, not a one-way street anymore, with customers taking over control from the hands of the company when it comes to what products they choose, what they want to hear and where they eventually spend their money.