The Cinderella of the 4 Ps
Once upon a time, Phil Kotler became the “father of modern marketing.” When Peter Drucker so perspicaciously asserted, “Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation” he marked his own place in the lineage of the discipline as the grandfather of modern marketing. Perhaps you knew that; but did you know that Neil Borden is father of the term “Marketing Mix” which actually was comprised of 12 elements in 1953? Then along came Richard Clewett the rightful father of the 4Ps, which was born in 1964. But wait! Did you know that the 4Ps were almost the 3Ps? Clewett studied under Jerome McCarthy who was calling the four elements of the framework product, price, promotion, and distribution; but it was Clewett who turned “distribution” into “place” and voila, we got the 4Ps! Even in their advanced years one could argue that the 4Ps remain the irrefutable tenets for the marketing mix framework. It served a roaring era of marketing well for almost 20 years without revision; and remains the most commonly referenced framework in all of marketing. There’s certainly other valid and smart work that’s been done to evolve the 4Ps in a services-driven world; one example below.
In this construct, the family of 4Ps has since grown to 7Ps with the addition of “People,” “Process,” and “Physical Evidence” in service marketing frameworks.
Booms and Bitner, 1981 (AMA Conference Proceedings)
But the 4P’s are still the Redwoods of the marketing forest. Among them, there’s one “P” that that most marketers must admit has been the stepchild “P,” “Place,” which is the proxy for distribution. The other Ps have enjoyed the wicked step-marketer’s kindness, love, and attention while distribution has often toiled to clean up after them as an afterthought.
The stroke of midnight has come and gone and the power of distribution is here to stay
The digitization of our culture, including the modern corporation, has created a network-based world of always-on real-time commerce. Digitization is the handsome prince who has cast wicked step-marketers aside to don the glass slipper on what is now the Cinderella of the 4Ps…distribution. Distribution has been the most underappreciated element of the marketing mix, but those who’ve paid attention to the comparative advantage that smart distribution strategies can produce are the winners. They mastered upstream supply chain management and the downstream customer connection at the nexus of what the consumer wants to know, what they want to do, where they want to go, and what they want to buy. These marketers know that you can win with a mastery of channel management, product mix management, logistics, and a friction free e-commerce strategy to produce what is often a more lasting competitive advantage than an effective ad campaign. Yes, supply chain cuts across all 4Ps, but the distribution-related aspects of supply chain include the place at which a company assembles their product, or vends a product; and is often dependent on the distance from the source of supply since decreasing the distance will decrease the cost and allow the price to be more competitive. Moreover, optimizing supply chain in today’s omni-channel world also has to be done in co-operation with the “place” considerations for the customers’ location.
The landline telephone is the metaphorical pumpkin in this story that has been transformed into the customer’s exquisite golden carriage; the mobile phone. 75% of all content gushes through mobile now, but the real floodgates that have been opened are access, immediacy, proximity, and what I believe is more important than personalization… context. Now a consumer can sense, search, find, compare, select, pay, and get their own fairy tale whim delivered in days via a self-driving 18-wheeler, in hours via drone, or in minutes via 3D printing, or instantly on-site at their location… with one touch. Add to that the IoT and “smart everything,” the old linear concept of distribution has been shattered. Connected devices and the latest mobile-enabled technologies present the notion that mobile may be the nexus of all four “Ps!” International Data Corporation (IDC) forecast titled Worldwide Semiannual Internet of Things Spending Guide suggests worldwide spending on IoT will grow 16.7% year-over-year in 2017, reaching more than $800 billion. By 2021, global IoT spending should total nearly $1.4 trillion. Digital tools in this connected world include beacons, AI, “click and connect”, location services such as near-field communications (NFC), mobile apps, radio frequency identification (RFID), 360 video, virtual realities, even virtual showrooms, all of which are distribution-dependent or distribution synergies!
Those who’ve paid attention to the comparative advantage that smart distribution strategies can produce are the winners
Lastly, there’s the intersection of consumer behavior and distribution that underlies the advent of shopper marketing. With all of these innovations inextricably linked to distribution, could one argue that this “P,” that almost never was, is now the most important “P?” If in a mythical gamer’s world of Marketing Mix Camelot, a sword fight broke out between the Ps, I would reach immediately for the “Place” blade. En Garde!
What could be crazier? Well, one “P,” that is, Price, might be vanquished altogether if and/or when the world of lateral commerce, peer-to-peer transactions, and crypto-currencies obliterate our current understanding of money in favor of trust. Fairy tale you say? That’s for another blog.
The stroke of midnight has come and gone and the power of distribution is here to stay. If only marketers had paid closer attention to this “P” they might not have lost managerial control of so many of its functions within today’s enterprise. Soon to be gone are the wicked step-marketers out there who are clinging to their antiquated views about this “P” in favor of a peaceable kingdom where all the 4Ps are treated equally; and may we all live happily ever after. Well, maybe not so much for “Price.”