What Has (and Hasn't) Changed in B2B Marketing

"What has been will be again, what has been done will be done again, there is nothing new under the sun."

Ecclesiastes 1:9 (New International Version)

"Don't throw the past away
You might need it some rainy day
Dreams can come true again
When everything old is new again."

"Everything Old Is New Again," Peter Allen and Carole Sager, 1974

In my last post, I argued that many of the criticisms of the 4Ps model of the marketing mix are unfounded because they are based on a flawed understanding of the model. To support my argument, I used several quotations from E. Jerome McCarthy's 1960 textbook, Basic Marketing:  A Managerial Approach (Richard D. Irwin, Inc., 1960). 

McCarthy was the developer of the 4Ps model, and he introduced it in his 1960 textbook.

As I read McCarthy's book, I was struck by how relevant the core principles discussed in the book are today. Certainly, some portions of the textbook - particularly some of the case studies and examples -are outdated. But the central elements of McCarthy's model and his broader view of marketing's role in a business are as relevant today as they were in 1960.

Perceptions of Change

If we surveyed a representative sample of B2B marketers, an overwhelming majority of our survey respondents would probably say that the last two decades have been a period of unprecedented change in B2B marketing. In some ways, this view is completely accurate.

Over the past twenty years, we have witnessed the proliferation of marketing channels, the explosive growth of marketing technologies, and the appearance of several new marketing techniques, including content marketing, social media marketing, and account-based marketing.

During the same period, several major consulting firms introduced an array of concepts and models describing the B2B buying process and exploring the role that marketing can, should, or does play in revenue growth at B2B companies.

Most of these developments have felt new, and many have been presented as new. But in fact, many of these "new" models of B2B marketing and buying aren't new at all. They have antecedents that go back several decades.

Wisdom From the Past

This phenomenon is evident in Frederick E. Webster, Jr. and Yoram Wind's 1972 book, Organizational Buying Behavior (Prentice-Hall, Inc., 1972). Here's how Webster and Wind described the six distinctive attributes of "organizational" (a/k/a B2B) buying:

    1.    "First, and perhaps most important, organizational buying decisions are made more complex by the fact that more people usually are involved in them and different people are likely to play different buying roles."

    2.    "Second, organizational buying decisions often involve major technical complexities relating to the product or service being purchased."

    3.    "Third, organizational buying decisions typically take longer to make than consumer (individual) decisions."

    4.    "Fourth, the greater time required for organizational buying decisions means that there are significant lags between the application of marketing effort and obtaining a buying response."

    5.    "Fifth, each buying organization is likely to be significantly different from every other buying organization in the potential market in ways that may require viewing each organization as a separate market segment."

    6.    "Finally, the organizational members participating in the buying function are neither purely 'economic men' nor are their motives purely emotional and irrational. Rather they are human beings whose decisions and behavior are being influenced by both task- and nontask-related variables."

If I change a few words here and there, it would be easy to believe these six attributes were written this year instead of more than 50 years ago. For example, the first attribute captures the essence of what we now call a B2B buying group, and the fifth attribute is remarkably similar to the original concept of account-based marketing.

Organizational Buying Behavior also presents a thoroughly modern view of marketing's ultimate purpose and mission:

    "In a nutshell, the marketing concept as it exists today is a business philosophy that sees the fundamental purpose of the business as the creation of satisfied customers . . . The responsibility of marketing management, according to this philosophy, is to interpret conditions in the marketplace and to coordinate and influence the direction of company operations so as to ensure that the company's offerings of products and services have the highest probability of satisfying customer needs."

Again, with just a few word changes, this statement could have been written this year.

All this may seem like the ramblings of someone who has too much time to read old books, but this is just one example of a larger and more important truth.

The pace of change in some aspects of B2B marketing has been so rapid over the past twenty years that it's far too easy to lose sight of the fact that many of the core principles of marketing and buyer behavior have changed very little. The tools and techniques we use are certainly different, but the thoughts and emotions we need to evoke in customers and prospects are essentially the same today as they were decades ago.  

Long Live the 4Ps!

Source:  Shutterstock

The latest salvo of criticism aimed at the venerable 4Ps of marketing was fired by Joanne Seddon, the CEO of the Marketing Accountability Standards Board, in an article published last month at WARC. 

Ms. Seddon pulled no punches in her criticism. She wrote that the 4Ps are "hopelessly out of date," don't "truly reflect the basic principles of marketing," and are "wrong. Or, at the very least, dangerously incomplete." Therefore, she argued, the attempt by some to revive the use of the 4Ps, while "well meant," is "misguided."

Beyond these broad condemnations, Ms. Seddon offered five specific criticisms of the 4Ps in her article. In my view, these criticisms are largely unfounded because they are based on an inaccurate understanding of the 4Ps model.

The 4Ps model of the marketing mix was developed by E. Jerome McCarthy, a marketing professor at Notre Dame. McCarthy introduced the model in his 1960 marketing textbook, Basic Marketing:  A Managerial Approach (Richard D. Irwin, Inc., 1960) ("Basic Marketing").

As the developer of the 4Ps model, McCarthy is the authoritative source of information about what the 4Ps encompass and how they should be applied, and his textbook provides a detailed description of the model as he originally designed it. So, in the balance of this post, I'll address Ms. Seddon's specific criticisms of the 4Ps using material drawn from Basic Marketing.

"The 4Ps Are Tactical, Not Strategic"

In reality, the 4Ps model is more strategic than tactical. McCarthy's extensive discussion of product, place, promotion, and price (Sections C - F in Basic Marketing) highlights the many strategic business issues that marketing managers must address when developing a marketing mix.

The following passage illustrates McCarthy's view of marketing's role in strategic decision-making:

"Are the activities of product development, product design, packaging, credits and collections, transportation, warehousing, and price setting included in 'marketing?' There is little doubt that personal selling and advertising are marketing activities, but many business executives would have marketing stop there. . . We must reject this view of marketing.

". . . Marketing should start with the customer, not with the plant. Thus, marketing should determine what products are to be produced . . . what prices to charge . . . and where they are to be available . . . - as well as selling and advertising." (Basic Marketing, p. 34)

The 4Ps Are "Purely Product-Focused" and "Miss Out" the Customer

McCarthy clearly states that marketing starts with the customer numerous times in Basic Marketing. It's noteworthy that he devoted 171 pages in his textbook to explaining the importance of choosing a target market and understanding the needs, preferences, and buying behaviors of potential customers before he began his detailed discussion of the 4Ps.

McCarthy's view of the centrality of the customer is evidenced by the following diagram, which appears on page 45 of Basic Marketing.

The "C" in the center of the above diagram stands for "consumer," and the diagram illustrates that all decisions regarding the 4Ps are centered on the customer.

The 4Ps Assume a "Static, Unchanging Marketplace"

This criticism is also unfounded. Near the end of Basic Marketing, McCarthy directly addressed the issue of changing conditions. He wrote:

"A 'best' solution can hardly remain 'best' for long . . . We are dealing, too, with a great range of ever-changing variables, and the movement of any one may change the final result. That makes our 'best' solution obsolete immediately. The marketing manager, then, must . . . make appropriate changes in his marketing mix. And this is a continuing process. He is continually analyzing, measuring, evaluating, and changing. (Basic Marketing, p. 671)

The 4Ps Don't "Touch on the Purpose of Marketing, Which Is to Drive Revenue, Profit, and Financial Value"

This criticism is accurate in the sense that McCarthy doesn't specifically address the measurement of marketing performance as a distinct topic. This shouldn't be surprising given how he sees the role of marketing in a business.

McCarthy defines marketing as follows:

"Marketing is the performance of business activities that direct the flow of goods and services from producer to consumer or user in order to satisfy consumers and accomplish the firm's objectives." (Basic Marketing, p. 33)

In McCarthy's view, marketing plays a leading role in most aspects of a company's business operations. Therefore, the effectiveness of the marketing strategy will be reflected in the overall company performance.

"The 4Ps Miss Out Brand!"

Ms. Seddon's final criticism is that the 4Ps model omits brand. In fact, McCarthy discusses branding in both the "Product" and the "Promotion" sections of his textbook.

It is fair to say that McCarthy's treatment of brand focuses on fundamentals, what we might expect to see in an introductory brand management textbook.

It's also fair to say that McCarthy, unlike today's brand marketing advocates, doesn't discuss the shortcomings of performance marketing, the pitfalls of "short-termism" in marketing, or how a strong brand affects the psychological aspects of buyer decision-making.

But, it's simply wrong to say the 4Ps omit brand.

Are the 4Ps Outdated?

Like any textbook, Basic Marketing reflects the state of knowledge about its topic that existed when it was written. So, there are aspects of Basic Marketing that are now outdated. To address this issue, popular textbooks are typically updated regularly, and Basic Marketing is no exception. The book is now in its 19th edition.

The 4Ps model itself is not outdated if it is properly understood and used, and most criticisms of the model are simply way overdone.