Price:
Many consumers consider price to be a primary driver when making purchasing decisions. Marketers have tried to manipulate consumer perception of price by introducing a Value for Money aspect. Businesses that sell high quality products, at what consumers perceive to be competitive prices, can command a higher price. As one Belgian beer manufacturer claimed for over 25 years, their product was ‘reassuringly expensive’.

Products with elastic price demand, operating in a highly competitive marketplace, will be much more sensitive to movements in price. In 2009 a survey carried out in the sports clothing sector revealed a remarkable lack of loyalty amongst brands – just look at how Reebok has fallen out of fashion. Products from different suppliers were considered interchangeable. The resulting prices all fell within quite close bands.

A major impact of the digital age upon price is the ease by which a consumer can compare prices. Using comparison web sites, search engines and consumer sites such as eBay and Amazon, one can simply enter the desired item and be presented with prices from vendors around the world. This has levelled the playing field to some extent, and retailers have taken advantage of a highly accessible online marketplace. However, this has increased sensitivity to price in some ways, even with lower priced goods. One might also assume therefore that traditional purchasing decision models are now outdated; we spend considerable amounts of time shopping around for low priced goods, armed with a surfeit of information.

Whereas in the past it was possible to feel the product and therefore determine whether it was value for money, it is now just as easy to return items that don’t meet expectations. The 2000 Distance Selling Regulations further protects the consumers. Purchasing online from a reputable company carries no more – or indeed, less – risk than buying from a brick and mortar store.

Product:
Product is, of course, still fundamental and with regards to ecommerce it is harder to be sure you are purchasing a suitable product. Being unable to physically touch or see it can be problematic, but returning items is a relatively pain free process – but for whom? Well, for manufacturers, they need to be wary, as returned items are expensive to process and these costs need to be factored in. Manufacturers still need to sell quality products, but not just that, they need to ensure these products are advertised clearly and without ambiguity, else customers can easily point the finger at the manufacturer for their own mistakes. With online retail, it’s arguably even more important that expectations are met. As you cannot assess your product by feel or see your product in action, descriptive clarity is paramount.

Easy access to the internet means consumers have many more opportunities to share their experiences with others than ever before, bringing a social element to online retail. A product can be fully researched prior to purchase. Using search engines you will quickly find many user reviews for the product you are considering buying. The Trip Advisor Fact Sheet, states that in Q3 2014, they had 315 million monthly visitors and list more than 200 million reviews . On the other hand, retailers can give many more technical and bespoke details than ever before to help them differentiate their products. A product that does not meet expectations, or is backed up with poor service, will quickly be identified and reported on en masse, damaging the brand and future sales – reputation protection is big business in itself.

A product’s USP must be genuine, and needs to offer something truly different to its competition. Sales performance now depends on not only quality, price and performance, but also people.

Place:
Place refers to where you customers look to buy a product or service. Products are often available from multiple places – in a brick and mortar store, online, or via a range of resellers. Last season’s stock or over capacity can be sold off quickly and efficiently via online discount stores. Some have developed an aura of exclusivity, such as Secret Sales, Groupon or Achica, which not only move surplus stock, but do so without any detriment to the brand in question. It’s worth mentioning though that if a product continually features on these discount sites and Groupon, consumers will begin to question whether the RRP and the “discount” are actually genuine, therefore the true value of the product. No one believes that DFS sofas were ever sold at full price – apart for 2 weeks in January, at one store, in Aberdeen!

Consumers will expect a high level of convenience and service, both on or offline. Offline, sales staff with good face to face communication skills are essential. Sales staff in shops need to work harder to close the sale in the shop. Consumers may get great service and advice in the shop, only to get online when they get home and order from Amazon. Online, convenience comes from an easy to navigate website that simplifies the buying experience – and enhances it.

But the decision where you make your products available still comes down to traditional questions; which “place” will be most complementary to your product in the way you want it positioned. Luxury retailers understand this, and therefore need to make their “mortar” shopping experience as individual and special as possible. If you’re going to buy a £50k Patek Phillipe, you’re hardly likely to do this online – you’ll visit Harrods, with all the associated pampering which will accompany this.

Promotion:
Promotional channels and techniques have multiplied exponentially. For example, digital advertising, social media, location based communication, interactive TV and online offers, coupled with increasingly sophisticated real time analytics mean that businesses have more insight into their customers and can develop more targeted campaigns.

Of course, with these techniques comes concerns over privacy, as well as the ability to manage Big Data. Do we know too much, or have too much information to be able to draw viable commercial conclusions and develop profitable opportunities? Hopefully, as analytics improve, so does the ability to refine and interpret data.

In conclusion, the 4P’s are certainly still relevant in the digital age. However, the marketing mix has expanded in a sense – the CIM have added 3 more P’s to their list – People, Process and Physical Evidence . Robert Lauterborn suggested 4 C’s would be more appropriate Consumer wants, Cost, Communication and Convenience, but arguably these are the same 4P’s, just dressed up under different names.

So in essence, develop the right product, at the right price, sell it in the right place and promote it effectively, and you can do little wrong.

Huw

References:
Independent Journal of Market Research, Vol 51, No. 1 2009
http://www.tripadvisor.co.uk/PressCenter-c4-Fact_Sheet.html
Marketing and the 7p’s – A brief summary of marketing and how it works
Lauterborn, B. (1990). New Marketing Litany: Four Ps Passé: C-Words Take Over. Advertising Age, 61(41), 26.