I found myself at a big box retailer earlier today marveling at what is described in “business school” as the “Four P’s of Marketing”.
The Four P’s of Marketing began with Professor Neil Borden of Harvard Business School identified the four distinct areas that can be controlled by a company which influence the consumer’s decision to purchase goods or services. According to Net MBA Professor E. Jerome McCarthy, also at the Harvard Business School grouped these 4 elements into easily identified categories: product, price, place and promotion.
What got me thinking about the four P’s of marketing was how I was walking out of the big box retailer with items in my cart that I had NOT intended to purchase upon entry to the store. While I had “CD cases” on my list, I certainly did not have “external hard drive” on my shopping list. Yet, as I completed my transaction – there in my cart was a 1 TB external hard drive to replace the 500GB external hard drive which gave up the ghost a few weeks ago.
As I was exiting the store, I was thinking how important the fourth P of the Four P’s of Marketing was to this particular purchase: Placement. See, I’ve needed the new external hard drive for a couple of weeks now and I probably would have gone on postponing the purchase for even longer if it hadn’t been for the product’s placement right next to an item that was on my list – CD Cases.
Because Western Digital had their product in the right place, they made a sale. It was as simple as that – which is weird because I was replacing yet ANOTHER Western Digital external hard drive that had burned up after only 8 months of use. Hmmm… I’d have chosen the Maxtor drive if I’d been consciously thinking about this purchase thanks to the first P in the Four P’s of Marketing which is PRODUCT. However, the green box was familiar to me and gave comfort now – obviously where none was due.
In my post purchase analysis – I can honestly say that another P of the Four P’s of Marketing was hard at work along side the PLACEMENT factor and that is PRICE. See, just an hour earlier, I had been in the local computer repair shop dropping off my oldest son’s computer for repairs. They were the ones who set me up with the original back up system which included the 500 GB external hard drive. Their clerk reminded me of my need by trying to sell me on setting up a similar system for his computer. His impression collection of mp3 files and borderline obscene photos do NOT qualify for the investment in such a system in my opinion – but it reminded me that my own system was not currently functioning. I took a glance at the WD external hard drives on display and took note of the price they were asking. Later, when shopping at Big Box Retailer – I saw the identical drive for about 1/2 the cost.
Before you slam me – I know – I know. I know that the Big Box Retailer gets an unfair pricing advantage over my local computer supply shop – and that I’m destroying a local business by my purchase. In my defense – I bought the ORIGINAL external hard drive from them at a similar horribly INFLATED price and 8 months later, I’m back shopping for a replacement. When I asked at local computer shop about a warranty – they told me they’d get back with me. At least at Big Box Retailer, I was able to purchase an extended warranty for a minuscule sum.
So two of the Four P’s of Marketing came into play with my recent purchase decision. I ignored previous poor product performance and relied heavily upon Price and Placement in my purchase. Promotion had already been accomplished previously, when the local computer repair shop offered to set up an automatic data back up solution for my business. (There’s nothing like the Blue Screen of Death to remind one of how DEPENDENT one is upon the information stored within one’s computer!)
As I left the Big Box Retailer, I was also mulling about the concept that product placement’s place in the marketing mix often gets diluted when one focuses upon selling exclusively via the web. I mean, if I had gone to a website to purchase the CD ROM covers that I needed at that moment – well, I doubt I would have been shown a 1 TB external hard drive as a possibly complimentary purchase. The best predictive algorithm in the world couldn’t have called that one. However, because I needed the CD Rom covers NOW, I went to a brick and mortar store. There, placement and price came together to compel me to complement my $4.44 CD Rom cover purchase with a $175 “add on” purchase. That’s one heck of an up sell!
The Four P’s of Marketing seem to apply more to Minor Sale items and tends to fall apart when one begins to try to apply the Four P’s of Marketing to products and services that qualify as Major Sales. However, if you’re marketing a Minor Sale product or service- these are important factors to keep in mind as you ponder the REAL reasons people are buying your product or service.
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