Report balance of power Where does marketings power lie today, and how wide does it range? Where is it making an impact, and what does this look like at strategic and tactical levels? Indeed, do the traditional Five Ps of marketing still stand strong, or do marketers need to reinterpret them for the modern world? Words: Alex Blyth illustration: peter judson H ow marketers understand and employ the classic levers of product, price, place, people and promotion, the balance between them, and their relevance, has changed radically. At the same time, the underlying power of marketing is as strong as ever stronger, even, as it deepens its worth as a critical function in driving business growth in organisations, large and small. Which of the Five Ps should todays marketers focus on, and what new factors are being added to the mix? Product, plus experience The age-old truth still applies that without products or services, marketing has no reason to generate leads. It can be argued, however, that product has become even more important in recent times. Simultaneously, marketing and consumer understanding of what drives product development has changed. Cost of production is, perhaps, no longer the key factor. Where once companies produced a product for as low a cost as possible, then set about marketing it to prospective customers, the approach of many new-breed start-ups is to find out what people want first, and then design products and experiences that deliver exactly that. Of course, this always happened to some degree, but today its powered by a fresh differentiator experience. There has, undoubtedly, been a shift from product to service to experience as the key differentiator and success factor in all marketing categories, says George Porteous, head of UK and Ireland at multinational IT firm Cognizant Digital Business. You only need to look at the investment in service design and innovation as start-ups proliferate and established companies look to find ways to be more agile in bringing new products to market. He continues: New technologies, cloud computing, increased memory and processing speed are all driving the focus on and opportunities for developing better experiences for customers, rather than just traditional message-based marketing. This means marketing departments are changing their structure and skill sets to embrace design thinking, data, artificial intelligence (AI), technology and customer experience, as well as the still valuable skills of the brand, marketing and customer focus to demonstrate the value of products. Porteous points to Nike as a high-profile example of a company that is able to produce compelling and engaging brand communications around a product. He believes that, by honing its product offering, the firm has driven a whole range of innovation in services and experiences, as a more engaging expression of the brand purpose. For example, the company launched its own running club, the Nike+ Run Club, alongside an innovation pipeline that not only highlighted the benefits of its training shoes, but also demonstrated brand spirit and passion behind the making of these products. It becomes a holistic outlook. Porteous concludes: This trend will only increase as technology develops and matures, and as we have even more ability to provide compelling experiences around a product, enhanced by data and personalisation. Experience, essentially, has become the product that marketers are selling. The speed read There has been a shift in focus from product, to service, to experience When price is not a certainty, promotion must become a priority People is the pillar that underpins the other Ps of marketing Marketers need to attend to two new Ps: performance and purpose Price and promotion Setting a price for a product or service has always been a challenge for marketers, and price has always fluctuated. The rate and degree to which this is the case has increased, however. In food and drink, and some FMCG verticals, for example, discounting has become omnipresent. Meanwhile, fast-changing rates on hotel booking sites, complicated tariffs for mobile phone and internet services, plus utilities, have often angered Case Study: Marmite the consumers and led to bad press. Then there is the divide between low-cost and premium variables. A digital modern marketing icon? download of pop music often costs less than buying a CD did 20 years ago, but fans are also happy to buy luxury-packaged, vinyl LP versions of what is essentially the same product at four times the price. When price no longer offers a certainty in differentiation, promotion comes to the fore. For marketers whose careers were built in the era of traditional media, promotion has been revolutionised and that goes for B2B as well as B2C marketing. Twenty years ago, for many marketers, promotion still meant direct mail, adverts in print publications and free branded pens at exhibitions, says Mollie Powles, marketing manager at agency Browser Media. Now, successful promotion is achieved through sharing knowledge and values, transparency, and thought-leadership content. Promotion has become a much more strategic and multifaceted exercise. Much of this change has been driven by the internet. Google celebrated its 20th birthday in September this year. Two decades ago, Facebook, Instagram and Twitter the three most commonly used social media platforms didnt exist. Search and social are often now the core of promotional activity. This, too, has affected price. As Powles says: In todays society, people value their time as much as their cash. So beating your competitors on price alone is not always enough. Recent Forrester data (which echoes many other studies) reveals that more consumers regularly follow politics and identify as being environmentally conscious than in 2014. Buyers like to recognise their own personal values and ethics in the companies they do business with. Promotion must be built on this knowledge, and price is less likely than ever to be the primary reason for a sale. Expanding place For some marketers, the biggest leap forward when it comes to the Five Ps is with regard to place. This has impacted on traditional retailers, as well as inspiring start-ups, and has led to reconfigured strategies for companies large and small. Lyndan Orvis is the e-commerce manager atHayes Garden World, an independent garden retailer with a 200-year history. In 2018, Hayes website traffic overtook in-store visits for the first time, helping the business to become one of the top 10 garden centres in the UK by turnover. Hayes success reflects the clear shift in where people are doing their shopping. According to the latest figures from the Office for National Statistics, UK e-commerce sales grew 13.7 per cent year on year and, in February 2018, e-commerce sales accounted for 17.2 per cent of all retail, compared with 15.6 per cent in February 2017. At the same time, the high street is struggling. A study by the Local Data Company for PwC reported that, while an average of 11 new stores opened on the high street every day in 2017, another 16 closed amounting to a total of 5,855 closures. Hayes Garden World has always been a traditional bricks-andmortar business, says Orvis. Up until 10 years ago, we relied entirely on local customers and tourists for trade. After launching our website, we realised the potential that the digital world has for attracting and marketing to new customers. Of course, many such businesses have made the leap and built an e-commerce site, but the example of Hayes shows that for marketers its not simply a case of build it, and they will come. Strategy is vital. As a small business, trying to compete with large retailers directly was unlikely to reap rewards for us, Orvis says. Instead, we invested heavily in a multitude of digital offerings to attract customers across the web. The key to our growth is to be in the right place at the right time. For Hayes, this has involved a sophisticated approach to digital marketing: getting the right balance between organic and paid marketing; using video content to engage across Facebook and YouTube; re-marketing to people who have visited the website; driving conversion with various retargeting methods; incentivising return visits; retargeting visitors on their social newsfeeds or favourite gaming apps; and so on. Looking ahead, Orvis sees further evolution of the role of place in marketing. Voice search is forecast to be huge, he says. So businesses need to implement location- and query-based search terms into their SEO strategy. Ultimately, marketers will need to evolve into adopting multichannel strategies that support the continued visibility of their business and products. For any modern brand to succeed, there needs to be a true purpose at its core, that goes beyond product lisa desforges, strategy director, B&B Studio People power Perhaps the greatest shift in marketing power has been towards people, and it has come in three ways. First, it is about the people who buy from you. Josh Mueller, global head of marketing at analytics firm Dun & Bradstreet, which has its headquarters in New Jersey, says: All of the other Ps depend on people. If you dont understand your customers and their relationships, how can you even begin to know how to price, where to promote, and so on? This is a message that has been heard by business. A study by Dun & Bradstreet found that 47 per cent of firms have set improving customer experience as their top business priority in the next year, and more than 60 per cent have implemented or are expanding their plans to improve their complete view of the customer across channels. Mueller says: Even just a decade ago, too many companies were still focusing on their own product features and were not able to properly leveragecustomer data to build better relationships and enable better marketing. Not only have we seen an increased focus on the customer, but weve seen a shift in the entire marketing organisation. We now look to hire people who are not only creative, but who can also intelligently use data and analytics to understand and improve the customer experience. Second, it is about the people who work for you. Roger Hart, CEO, Aesop Agency, says: As the economy dematerialises, the internet hands power to consumers, and with the rise of supposedly emotionally needy millennial employees, CEOs have had to become as much cheerleaders as quarterbacks. Theyre not just setting the strategy and allocating resource, but also acting as a figurehead responsible for identifying its guiding purpose and nurturing its culture. In short, CEOs have had to become more people conscious more present, more emotive, better storytellers. Which is why of all the Ps, people is key to the marketers return to prominence. He continues: CEOs are now fully aware that motivated employees make a difference to the bottom line. Theyve read their Peter Drucker and know that culture eats strategy for breakfast a hackneyed line now supported by evidence. The governments MacLeod report, for example, found that companies with top-quartile engaged employees are twice as profitable, 18 per cent more productive, have 12 per cent more customer advocacy, and have 40 per cent less staff turnover. Its clear that investing in people, training and culture pays dividends. Third, it is about how organisations are enlisting people as contributors to its marketing. The relationship between brands and consumers has shifted from one-way to two-way, says Lisa Desforges, strategy director at B&B Studio. People are no longer passive consumers of a brands product and message; instead, they are active collaborators in an ongoing journey. She points to the co-creation by Lego, which allows consumers to submit design ideas that are voted on by an online community of fans, with the winning ideas then going into production. Another example is Primania, part of Primarks website, where consumers submit photos of themselves wearing Primark clothes and you can shop directly from them. Consumers are becoming designers, models and marketing copywriters for these brands. BrewDog has inspired people to become co-owners, too. Its Equity for Punks programme has generated more than 60m to date. These investors are present at AGMs and involved in community-led decision-making, creating an intensely loyal consumer base. Performance and purpose the new Ps Finally, we are seeing the emergence of two new Ps: performance and purpose. Simon Baptist, head of operations at mobile marketing specialists TUNE, explains: The traditional Five Ps arent as dominant as they once were. These conventional pillars are perhaps more well suited to a bricks-and-mortar age. Instead, in the digital era, a new P has been added to the marketing mix performance. Baptist cites the decision by P&Gs chief brand officer, Marc Pritchard, to halve digital media spend as evidence of the importance of performance. Performance is now the first thing marketers need to consider in a digital world, he says. Were seeing a performance-focused mindset, where marketers only pay for whats actually delivered, taking the lead and beating competition. Then there is purpose. Desforges points out that increased levels of interaction have empowered consumers to become more selective about the brands to which they want to devote time and money. Brands that connect more deeply with consumers on bigger issues beyond product are the ones winning in the current marketplace, she explains. Indeed, a recent study found that 49 per cent of people, and 60 per cent of 18 to 24-year-olds, would pay more for brands that support causes that are important to them, demonstrating that purpose has a direct influence on a brands commercial success. More and more brands are focusing on purpose, and this may point to the direction for the future. As Desforges concludes: For any modern brand to succeed, there needs to be a true purpose at its core that goes beyond functional product benefit. The most powerful brands are those that focus on consumer attitudes and inputs to guide their products forward, engaging directly through a comprehensive brand world that makes their consumers feel listened to and valued. cim.co.uk/exchange CEOs need to be more people conscious more present, more emotive, better storytellers roger hart, CEO, AESOP AGENCY