THE 5 PS IN TRANSFORMATION: PRODUCT

The five Ps of marketing — product, price, promotion, place, and people — are as vital to business success today as they were when first conceived fifty years ago, but after a long period of relative stasis they are now in flux as companies adapt to the digital age. The coronavirus pandemic has accelerated many of the trends. Understanding long term trends in the transformation of the five Ps helps marketers plan for more effective brand growth.

Product is the P that is changing the most. Companies are transforming their products. Three clear changes are well underway for most consumer products:

1. Direct to consumer

Selling products and services through e-commerce sites and platforms such as Amazon is rapidly becoming the norm (to the detriment of physical retail outlets). In the UK, the internet today accounts for almost a third of total retail sales according to the Office for National Statistics, up from 6% ten years ago. This trend has accelerated rapidly (see the chart) during the COVID-19 lockdown as households source more products online. The shift to online sales has multiple causes: the rise of Amazon and growing consumer demand for lower cost, faster delivery, wider choice online; the need for live first party data to inform machine learned algorithms and to test product and service changes; the rise of direct to consumer and the growing desire (and need) for businesses to control their relationship with customers.

2. Digital services that expand and enhance products

Businesses today are transforming their products by adding digital services. In addition to providing e-commerce sales and home delivery, companies are:

  • Using data to personalise customer experiences
  • Building subscription and automated repeat purchase options
  • Enhancing and customising loyalty programmes
  • Providing online customer service options including automated chatbots
  • Creating customer communities
  • Providing ‘how to’ videos and platforms for customers to share product experiences
  • Delivering faster and better response to customer questions and complaints
  • Partnering with third parties to enhance products and services

3. Sustainable, healthy, environmentally friendly products

The coronavirus pandemic has accelerated this trend: consumers are increasingly turning to products that prove and demonstrate: a sustainable manufacturing process, from start to finish; a high quality product that is healthy; a product that does not damage, rather improves, the environment.

According to Euromonitor’s ‘Voice of the Industry: Sustainability’ survey, fielded in June 2020, more than 40% of all the respondents globally are planning investments in various sustainability-related initiatives in their company, with waste and recycling being at the top of the potential future investment lists.
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By Frank Harrison, Croft Analytics

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