By: D. Sriram via Linkedin
Originally, there were 4 P's in marketing - Product, Price, Place and Promotion.The implication was that Marketing was a strategic function that influenced what a company made, how it was priced and distributed and then took charge of making sure the right consumers got to find out all about it. “The science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit" is how Philip Kotler defines it - and that's a much broader definition I see for the marketing function than most companies have in mind today.
Marketing seems to have become more of a lead or transaction generating function now. I've seen CMO recruitment ads that go on for several lines about how the candidate must be well versed in performance marketing (both search and display), have e-commerce experience and also show a history of driving up sales in a previous role. Nothing about product management, distribution or pricing.
What that sounds like is, "This is what we make. Your job is to make sure lots of consumers buy it. You can't change what we make or how we sell it, just get our advertising to work harder so more consumers are attracted to our brand"
In times past, finding out what consumers wanted was not very easy. You needed to do a lot of clever research to try and get past what consumers said, to identify what they really want. Also you couldn't test something completely new and unfamiliar that didn't have any connection with what consumers were already used to. In that context, you would assume that marketing really needed to focus on the 4th P since a lot of the others could only change in incremental ways.
Think about what's happened in the new, digital world. Consumer research has become irrelevant - you can move directly to observing consumer behavior, real time and on the cheap. Many of the new, disruptive business models - ride sharing, room sharing, video streaming, e-commerce and so on, are a direct application of a new set of 4P's that would not have emerged from traditional players with their incrementalist approaches.
Some time ago I was speaking to a company that sells electronic hearing aids and is very dependent on the middlemen (dispensers) who interact with consumers, diagnose hearing problems and help them set up their hearing device. These dispensers are not medical professionals, they are technicians using machines to calibrate hearing problems. In a similar way, opticians (not optometrists or ophthalmologists) working at vision care shops control the relationship with lens or spectacle wearers. These are categories ripe for disruption with a completely new digital model. The starting point in these categories should be a proper prescription from the most trained class of specialists, followed by a very thorough self-service online tool to help people choose and set up the product that best serves their needs. Costs would plummet for companies providing the service, giving them the opportunity to disrupt standard retail and create a new business model better designed for the digital world. (I know there are some companies claiming to do this, and they do sell product online but that's not the entirety of what I'm suggesting here).
Now that would be an exciting CMO role at a vision care / hearing care / other health care company. Redefine the 4P's and re-imagine the business model for the digital world. Imagine if Avis or Hertz had decided to re-imagine the car-rental business for the digital world, perhaps they'd have launched a ride-share service a lot earlier.
The reason we're seeing so much 'disruption' is because companies are not looking at marketing as a strategic function or digital as a new ecosystem in which to operate. They see marketing as essentially an advertising related function, and digital as no more than an advertising medium with some potential for online sales.
That mental block seems to afflict most large corporations nowadays, and the key reason is not putting marketing back as a central strategic function whose core task really is to keep asking "What unmet consumer need can we fill, profitably and viably?" That was important before, and it's even more important now as consumer behavior and expectations change so rapidly with advances in technology.
While some aspects of that job may require understanding and familiarity with advertising specific functions, its much more about being strategic, reading consumer data (not just research reports) and having the ability to reinvent and re-imagine a business for a new, technology enabled world.