Sunday, January 28, 2024

Are the 4P's Still Relevant for Today's Marketers?

Source:  Shutterstock
(The concept of the "marketing mix" has been a staple of marketing for over 70 years. It's discussed in virtually all marketing textbooks and taught in virtually all introductory marketing courses. But does the marketing mix idea still have a place in 21st-century marketing? The answer is "yes," and here's why.)

The marketing mix construct has been part of the marketing landscape for more than seven decades. The origin of the concept can be traced to 1948 when James Culliton, a marketing professor at Harvard, wrote an article in which he described the marketing executive as a "mixer of ingredients."

Culliton's article inspired Neil H. Borden, another Harvard marketing professor, who began using the phrase "marketing mix" in his teaching and writing in 1949.

Borden developed a model of the marketing mix that included 12 elements - product planning, pricing, branding, channels of distribution, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact-finding and analysis.

In his 1960 marketing textbook, Basic Marketing:  A Managerial Approach, E. Jerome McCarthy introduced a simpler model of the marketing mix that contained only four elements - product, price, place, and promotion. McCarthy's model quickly became popular and has been so widely adopted by academics and practitioners that the "4P's of marketing" have become synonymous with the concept of the marketing mix.

Despite its popularity and longevity, the 4P's model has been criticized for several reasons. Given how much marketing has changed over the past several decades, it's legitimate to ask whether a sixty-year-old marketing mix model is still relevant. My answer to this question is an emphatic "yes," provided you keep a few things in mind. 

The 4P's Include More Than the Terms Suggest

One criticism of the 4P's is that the ingredients used in the model don't adequately capture the complexity of today's marketing environment.

The response to this criticism is that the terms used in the model should be viewed as flexible category labels that can encompass more than the literal or common meanings of the words would suggest. For example:

  • Product - The "product" element can be used for both products and services, and for complex "solutions" that consist of multiple products and services. In essence, this element can refer to whatever a company sells.
  • Price - This element can encompass any type of price and virtually every aspect of pricing strategy - for example, cost-plus vs. market-based vs. value-based pricing, premium vs. discount pricing, unit pricing, subscription-based pricing, and pay-for-performance pricing.
  • Place - "Place" can encompass any method or channel of distribution a company is (or could be) using. Importantly, place can also encompass distribution via the cloud.
  • Promotion - This element is intended to encompass all of the ways a company can communicate with its customers and potential buyers. This would include all online and offline "marketing" communication channels and tactics, and personal selling, but it would also encompass communications that are "non-promotional," such as customer service and customer success communications.
The 4P's Describe Factors Marketers Can Manipulate and Control, Not What They Must Achieve
Another criticism of the 4P's model is that it focuses on the decisions and actions of the selling company, but doesn't address what is required to be successful with customers. This criticism is factually accurate, but that doesn't mean the model is flawed. It simply means the model was never designed to prescribe what will be effective with customers.
The 4P's model is like a list of available ingredients a chef can use to prepare a variety of dishes in a variety of ways, but it doesn't provide recipes for specific dishes that diners are guaranteed to like. It's up to marketers to decide what specific ingredients will produce a "meal" that will appeal to their target buyers.
To make these decisions wisely, marketers will need to use other methods and tools to identify the needs and preferences of their potential buyers. It's noteworthy that, in his marketing textbook, E. Jerome McCarthy did not discuss the 4P's model until after he had explained the importance of understanding the needs and attributes of the potential customers in the selling company's target market.
The Marketing Mix Concept Is Still Relevant
Even if you think the 4P's model is outdated, it's important to recognize that the basic idea of marketing leaders as "mixers of ingredients" is even more valid today than it was when it was introduced more than 70 years ago.
Regardless of company size, the resources available for marketing are rarely sufficient to enable marketing leaders to do everything they'd like to do. Deciding how and where to invest finite marketing resources has never been easy, but these decisions have become more complex because today's marketing leaders have more options than ever.
The challenge facing marketing leaders is to use their finite resources to implement the combination of marketing activities and programs that will produce maximum results. Therefore, the task of a marketing leader is similar to that of a professional money manager.
The job of an investment manager is to construct a portfolio of investments that will produce the highest risk-adjusted rate of return. In today's environment, as in the past, a primary job of a marketing leader is to construct a portfolio of marketing activities and programs that will maximize the return on marketing resources.
So, James Culliton's 76-year-old description of marketing executives as "mixers of ingredients" is still accurate.

Sunday, January 21, 2024

[Research Round-Up] AI vs. Humans - Round 1

Source:  Shutterstock
(This year, I plan to devote some of my Research Round-Up posts to a discussion of academic research papers about artificial intelligence. Some of these scientific papers will likely focus on comparing the capabilities of AI to those of humans at performing tasks related to marketing. This month's Research Round-Up features an unpublished paper that compares the performance of AI vs. humans at generating ideas for new products.)

"Ideas are Dimes a Dozen:  Large Language Models for Idea Generation in Innovation"

  • Authors - Karan Girotra, Cornell Tech and Johnson College of Business, Cornell University; Lennart Meincke, Christian Terwiesch, and Karl T. Ulrich, The Wharton School, University of Pennsylvania
  • Date Written - July 10, 2023
This paper describes the results of an experiment designed to compare the performance of generative AI and humans at producing ideas for new consumer products.
The task used in the experiment was to generate ideas for a new product for the college student market that would sell at retail for less than $50. The AI application used in the experiment was OpenAI's ChatGPT-4.
The experiment used three "pools" of new product ideas.
  • First pool (200 ideas) - Ideas created without AI assistance by students enrolled in a product design course at an elite university.
  • Second pool (100 ideas) - Ideas generated by ChatGPT based on the same "prompt" as that given to the students.
  • Third pool (100 ideas) - Ideas generated by ChatGPT based on the same prompt and a sample of highly-rated product ideas. 
All 400 product ideas were evaluated by a panel of college-age individuals in the United States. The quality of the product ideas was based on purchase intent. Panel members expressed their purchase intent by selecting one of five options - definitely would not purchase, probably would not purchase, might or might not purchase, probably would purchase, or definitely would purchase.
The Results
The average quality of the product ideas produced by ChatGPT was higher than the average quality of the human-generated ideas. The average purchase probability of a human-produced idea was 40.4%, while the average for a ChatGPT idea (without examples) was 46.8%, and the average with examples was 49.3%.
Of the 40 highest-rated ideas in the experiment, 35 (87.5%) were ideas produced by ChatGPT.
The researchers also asked members of the evaluating panel to rate the novelty of the new product ideas. In this experiment, the mean novelty value of the human-generated ideas was higher than that of the ideas generated by ChatGPT. However, the researchers noted that novelty did not appear to be significantly correlated with purchase intent.
Implications for Marketers
The Girotra et al. paper has important implications for marketers because it adds to our understanding of the capabilities of AI applications like ChatGPT.
The results of the experiment described in the paper are similar to the findings of other recent research, including an experiment conducted by Boston Consulting Group (GCG) and scholars from four elite universities. I described this study in a post I wrote last fall.
In the BCG study, participants were tasked to generate ideas for a new shoe for an underserved market. They were also required to develop a list of the steps needed to launch the product, create marketing slogans, and write a press release for the product. The researchers found that participants who used an AI tool to complete the tasks outperformed those who didn't by 40%.
The results of these studies suggest that AI tools based on large language models may be better than humans at performing "brainstorming-like" tasks where the objective is to generate a large number of diverse ideas relating to a topic.
This result should not be that surprising. Large language models are trained on a voluminous amount of data from incredibly diverse sources. The ability to generate responses based on such a vast repository of training data enables an AI tool like ChatGPT to excel at brainstorming-like tasks.
For marketers, the findings described in the Girotra et al. paper and similar findings in other studies suggest that AI tools powered by large language models can be particularly well suited to perform content ideation tasks such as generating potential topics for blog posts or producing potential social media posts.

Sunday, January 14, 2024

[Book Review] An Authoritative Road Map To High-Impact Content Marketing

Source:  Kogan Page

Last November, I published a review of Robert Rose's new book, Content Marketing Strategy. Rose's book is one of the best I've recently read, and it's an important addition to our library of content marketing literature. If you haven't read Content Marketing Strategy, I recommend that you add it to your reading list for 2024.

Shortly after I finished Rose's book, I discovered and read Purna Virji's new book, High-Impact Content Marketing:  Strategies to Make Your Content Intentional, Engaging and Effective (Kogan Page, 2023). This is also an excellent book, and I enthusiastically recommend it.

Purna Virji is a globally recognized content strategist and marketer whose work has been featured in The Drum, Marketing Land, Adweek, and other publications. She is currently Principal Consultant, Content Solutions at LinkedIn, and before joining LinkedIn, she was Senior Manager of Global Engagement at Microsoft.

What's In the Book

High-Impact Content Marketing contains 12 chapters that are packed with strategies, insights, and frameworks designed to enable marketers to conceive and produce intentional, engaging, and effective content.

Purna Virji uses the first two chapters of the book to explain why many content marketing efforts produce underwhelming results and to describe the essential building blocks of long-term content marketing success. These two chapters are particularly important because they reveal the perspective that Virji brings to the material in the balance of the book.

In Chapter 01, she argues that marketers struggle to achieve success with content marketing because they often get five basic choices wrong.

  1. Focusing on outputs vs. outcomes (a/k/a content quantity vs. business results)
  2. Chasing trends vs. being grounded in strategy
  3. Prioritizing short-term vs. longer-term
  4. Creating for machines vs. humans
  5. Not balancing creation vs. distribution
Virji uses Chapter 02 to discuss what she calls the "four essential element pairs" of long-term content marketing success.
  1. Behavioral science and learning design
  2. Empathy and inclusion
  3. Copywriting and selling skills
  4. Strategy and measurement
The balance of High-Impact Content Marketing covers several topics that Virji argues are critical for the development of a high-impact content marketing program. These include:
  • Needs analysis (internal and customer) - Chapters 03-05
  • Competitor content audit - Chapter 06
  • Content marketing strategy and measurement - Chapter 07
  • Copywriting strategy - Chapter 11
  • Content distribution techniques - Chapter 12
Virji also includes two chapters that explain how to use brainstorming to come up with high-impact content ideas.
My Take
High-Impact Content Marketing is an excellent book that should be considered required reading for anyone involved in content marketing. The book is well organized and well written, and Virji includes numerous real-world examples, which make the book more engaging and relatable.
She also provides several practical tips and frameworks in the book, which will enable readers to more easily apply the principles and techniques she discusses.
One particularly valuable aspect of the book is that Virji includes a discussion of "instructional design" principles and explains how content marketers can leverage those principles to create more effective content.
At the beginning of this review, I mentioned Robert Rose's new book, Content Marketing Strategy, and I noted that it is one of the best content marketing books that I've recently read. Rose's book and High-Impact Content Marketing address different aspects of content marketing, but these books are highly complementary.
Purna Virji's book provides a road map for creating effective content, while the primary focus of Rose's book is the organizational structures and processes that are needed to effectively manage a content marketing function. By applying the principles described in both books, marketers will greatly increase their odds of achieving content marketing success.
So, the bottom line is:  If you're involved in content marketing - and especially if you're responsible for leading your company's content marketing efforts - you need to read both of these valuable books.

Sunday, January 7, 2024

Looking Back, Looking Forward - 2024 Edition

Source:  Shutterstock

The beginning of a new year is what behavioral scientists call a temporal landmark, a date that stands out as more meaningful than others. Temporal landmarks often prompt us to make significant changes in our lives or commit to pursuing new goals.

If you doubt the power of temporal landmarks, just consider how often we make "New Year's resolutions" to lose weight, or begin a regular exercise program, or learn a new skill.

Like many marketers, I used the final few weeks of 2023 to reflect on what happened during the year and plan for 2024. Because of the disruptive events of the past few years, I spent a good bit of time thinking about how this blog needs to change and what the focus of my content here should be in 2024.

What Won't Change In 2024

Last year, I began publishing two new types of posts each month - book reviews and "research round-ups." In 2023, I published eleven book review posts.

Today, marketers have easy access to a huge variety of content resources. They can read blogs, white papers, and ebooks, watch videos, listen to podcasts, and attend webinars.

All of these content formats can be useful and valuable, but some topics can't be adequately addressed by anything other than a full-length book. Therefore, books will always be an important knowledge resource for marketers.

My book review posts were very popular in 2023. In fact, three of my ten most popular posts last year were book reviews. So, book reviews will continue to be a regular monthly feature in 2024.

Last year, I published eleven monthly research round-up posts, and they were also popular with readers. Two of my ten most popular posts in 2023 were research round-up posts.

Most research round-up posts include brief descriptions of two to four recent research studies, although I have occasionally used a post to discuss one particularly important study in more detail. Given their popularity, research round-up posts will also continue to be a regular monthly feature this year.

What Will Change in 2024

My primary objective for this blog has always been to provide information and viewpoints that are timely, thought-provoking, and useful. To accomplish this goal, the content of this blog needs to evolve to reflect the ever-changing landscape of B2B marketing.

Without question, 2023 was the year of generative artificial intelligence in business and marketing. OpenAI's release of ChatGPT on November 30, 2022 ignited an arm's race among technology companies to develop and roll out new or enhanced applications featuring generative AI capabilities. Product announcements from both tech industry heavyweights and start-ups came at a rapid pace throughout 2023. 

The capabilities of generative AI language models also evolved at a breakneck pace last year, and it's now clear that generative AI will have a profound impact on all aspects of business, including marketing. I suspect that the pace of AI development will continue in 2024 and that generative AI will again be one of the hottest topics in marketing.

So, I'll be writing about generative AI this year, but my approach will be a little different than most. I've always believed that it's important to use this blog to make readers aware of concepts and research that they may not encounter in the popular B2B marketing literature.

Last year, generative AI became an important topic of scholarly research, and that will likely continue this year. Academic research papers can be an authoritative source of information about generative AI, but they can also be more challenging for marketers to access. Therefore, I'll be focused on finding and discussing these kinds of materials in 2024.

I'll also be actively looking for academic research papers on other topics that are relevant to B2B marketing, and I'll write about those when I find them.

2024 is poised to be another exciting year in B2B marketing. I look forward to expanding my knowledge and sharing what I learn with you.