Marketing has gone through evolutionary changes in the last 36 months. It is probably the most profound period of change in the history of marketing. No one will disagree. The first generation of marketing took a pure functional view and was entirely tactical in nature, dominated by the 4P’s: Product, Pricing, Promotion and Placement, focusing on pushing mass market product messages and driving store promotions. The next generation of marketing takes a “customer” view: uncovering unmet needs, facilitating conversations, realizing, and delivering real customer value through "customer engagement".
As a marketing practitioner and advisor for senior marketing executives for many years, I am fascinated to see the evolution of strategic marketing theory, concepts and practices. In this “experience economy”, strategic marketing now plays a different role. It is now “conversation-driven”, “social network-powered”’, “technology-enabled” and “information-intensive”.
When I wrote “High Intensity Marketing” in 2001, the idea was to help marketers to adapt a new perspective on these elements that is encompassing and strategic, not narrow and tactical. I came up with the “New 4Ps” model to supplement the traditional marketing 4Ps. They are Personalization, Participation, Peer-to-Peer and Predictive Modeling. Don't forget it was pre Web 2.0 days. I was even planning to assemble/acquire a network of firms offering these capabilities. It was a little ahead of its time and it was in the midst of the dot.com bust.
Today, all of this is very much alive and these are the directions that cutting edge marketing is advancing. The first “P” is the simple idea of “Personalization” which now takes on a whole new meaning (I wrote in my book that in the near future we can segment a customer by his or her genetic type, I’m not sure if I like that idea myself). I was focusing on customization of products and services through the Internet.
The second “P” is the concept of “Participation”, it is to allow customer to participate in what the brand should stand for; what should be the product directions and even which ads to run. This concept is laying the foundation for disruptive change that we have yet to see the full impact. Looking back I was grossly underestimating the degree of democratization brought about by this idea. By enabling each of us to create and publish our own stories, the power of deciding what we read; listen and watch has spread from a handful of media companies to anyone with a camera, a connection and a computer.
The third “P” is “Peer-to-Peer”"interruptive" which refers to customer networks and communities where advocacy happens. The historical problem with marketing is that it is in nature, trying to impose their brand on the customer. This is most apparent in TV ad, which pushes out its own idea of what brand is without engaging the customers. These "passive customer base" will ultimately be replaced by the "active customer communities". Brand engagement happens within those conversations.
The last “P” is “Predictive Modeling” which refers to neural networks algorithms that are being successfully applied in marketing problems (both a regression as well as a classification problem).
Early in 1991, John Seely Brown, then Director of Xerox Palo Alto Research Center, referred to customers as the “ultimate partner”, he was absolutely right. Customers can now participate in every part of the value chain. I will trying to set up a network of agencies to deliver on this, unfortunately I was a little ahead of its time. The new 4Ps concept which I presented in many conferences including the Internet World (NYC) in 2001 is real today. I'll share it with you here at a later date.