Promotion is Dead, Long Live the Product

The 4Ps is an idea that most marketeers have come across during their education.  That makes it a good vehicle to discuss change as it is so widely understood.  For those who don't know it refers to Price, Place Product and Promotion, the mixture of areas that traditional marketing has concerned itself with.  Whilst at Reboot 7.0 I considered what the arrival of the digital era means for this simple formula...

For some time now Promotion has been the dominant area of marketing but there are suggestions that might be changing.  Many consumers are experiencing a kind of Promotion exhaustion and filtering commercial messages out of their lives using PVRs, ad blocking software and subscription. 

All of which makes it easy to think that the marketing industry itself is in decline.  But the demise of Promotion doesn't mean that marketing is dead.  Marketing is about markets - which will be around for as long as humans trade. But the digital era is shaking up the marketing industry, just as it is doing to many others, and maybe the era of Promotion is going to be the victim.

So will the digital era advance the importance of a different aspect of marketing ?

Maybe it's time for Product to step forward.  In a conversation I had with Patrick Barwise, Professor of Marketing at LBS, a few months ago he said that he felt marketing was now about 'operational excellence'. While Seth Godin's book Purple Cow is about making a product so remarkable that it naturally draws in sympathetic customers.  Which amounts to saying that Product is now more important than Promotion.

Intuitively it also seems to make sense that in transparent markets flooded with information and populated by powerful customers, good Product is going to succeed.  Which is why services such as VirtualTourist, where we can peer over the Promotional wall and inspect hotel rooms for ourselves, are so successful.

Skype's presentation at Reboot seemed to hit a few of these themes. They spoke about the need to,"release all the time" which indicates a big emphasis on the product.  They see the role of marketing as "defending the product" as oppose to pushing it.  Skype say that the days of "buying customers" through marketing spend are over.  A good product and a stripped down Promotional message described as a "simple, generous promise" is their recipe for success.  45 million Skype users would seem to suggest they are right.

In a Product era the other Ps will continue to have a place.  After all Price, Place and Promotion are pretty fundamental.  But they can be combined in new and interesting ways.

Apple's mega store in London allows people to get their hands on the product and play with them for as long as they want without any pressure to buy.  Apple know that purchases will follow but maybe online at a later date.  The company has put the Product at the centre of the experience and let the other Ps support it.

For modern marketing this could mean a shift of emphasis.  Marketing departments may start to look more like Product design teams rather than advertising factories spearheading entry into a marketplace.  Perhaps marketeers' role will be to contribute ideas to the design process based on market feedback. They may even be managing consumer input as lead users are brought closer and closer into the production cycle.  (Like Scoble perhaps?).

Perhaps Promotion will be more about releasing not 'pushing' Products into online consumer communities, using techniques that create enough buzz to drive word out into the world.

Perhaps Promotion is dead. Long live the Product.

 

Comments

[Kevin Dugan]

James: Great post. Maybe what we're seeing here is less one of the four P's dominating and more of an evolution of the customer's role in, and impact on, the four P's.

Skype *should be* defending the product. They're first to market! They live by different rules. Rules that will change when a real competitor emerges in their space. They should also be engaging their most passionate customers in a dialogue. Is this promotion? Not necessarily. Is it product development? Possibly.

Regardless, I do not think any of the P's are dead...just changing. We'll still have marketing-centric companies (P&G) and product/engineering-centric companies (Skype) they'll just work differently with their customers in an age of participation.

Now for a consumer example of how the marketing spend/promotion CAN make an impact, look at Target vs. Wal-Mart. Wal-Mart is the top retailer...their annual revenue makes up more than half of the top 10 retailer's annual revenue. Then there is Target as the fifth largest.

Target spends about $100 million more than Wal-Mart on marketing. After a few years of Target making designer products affordable, Wal-Mart is changing its approach to compete with Target.

The product is still crucial in this example, but a very creative approach to marketing, backed by a bigger budget, is making an impact for Target. Why else would Wal-Mart advertise in Vogue?
http://www.usatoday.com/money/industries/retail/2005-08-25-wal-mart_x.htm

[April]

Although I hate to admit it, promotional schemes seem to fail 90% of the time. Now that the consumer has the power to decide what he/she wants, he/she will choose what they will be exposed to and what they wo'nt (for the most part...except when the consumer is attacked by guerilla marketing).

I explore this subject even further on my blog too. You can check it out at AprilatIC.blogspot.com.

Let me know your thoughts...

[Lucas Skowronski]

Though so useful this post that I've used it like basis to post in another blog at a business administration class course at the university UFSM - Santa Maria - Rio Grande do Sul - Brasil.
And I agreed that the Product is in the center of the universe and that Propaganda should be informative only.

[Lucas Skowronski]

Though so useful this post that I've used it like basis to post in another blog at a business administration class course at the university UFSM - Santa Maria - Rio Grande do Sul - Brasil.
And I agreed that the Product is in the center of the universe and that Propaganda should be informative only.

[embroidered shirts]

always on the lookout for some good promo items thanks for that info