The fifth "P"

Everyone who has studied marketing in the last 50 years has been introduced to the Four Ps of Marketing. It was E. Jerome McCarthy who originally developed the mnemonic which acts as a functional and memorable classification system of the various elements of marketing. Originally, McCarthy defined the marketing mix as a combination of controllable factors at a marketer's command to satisfy a target market. Under the previous marketing model, we sold what we made or produced. Under the new model, we must sell what the customer wants. The old marketing mix looked at the 4Ps of marketing—product, price, place, and promotion. Whether you are thinking of setting up, starting, or expanding your business or selling any product or service, these four elements still need to be at the top of your mind all the time.

The first P is Product. This is what you are selling, whether it is an automobile, software program, diaper, or a service. But it is not just the product or service itself that is included in the product. It also includes the varieties of your product, the quality of your product, how it is designed, packaged, and branded. Anything that adds value to your product and any reason the customer may wish to buy your good or service is part of the product. This consideration must not be underestimated.

The next one is Price, exactly how much you are going to charge for your goods or service. You may believe this is merely the amount you charge customers to purchase it. While this is a key component, the price also includes the MSRP, wholesale price, volume discounts, special offers, incentives, payment plans, and credit terms. In short, it is anything remotely related to the money involved in this transaction.

The third one is Promotion. This is what most people think of when they think of marketing. Promotion includes advertising, the website and landing pages, direct mail and catalogs, e-mails and newsletters, selling, sales promotion, public relations, sponsorships, sales calls, brochures, inside sales, and many other aspects. All are parts of the promotion bucket.

The final P is Place. Place is also known as distribution. How do your clients find your product and where do you sell your product? Is it delivered to their door, is it in a retail store, or do they download it from your website? Place also includes the logistics for each of these things. If your product is sold in a retail store, how did it get there? How many of them are there? How soon do they need more inventory? Everything you need to consider in getting your product to your customer or to a place where your customer can find it is part of place.

It is not enough to define your product, place, price, and promotion unless you also understand whom you are selling to. Customer segmentation and defining your target market will be discussed in more detail in Chapter 3, Laying the Groundwork, but for now, it is enough to understand that the target customer is a critical part of any marketing mix. If my company were selling baby diapers, it would not matter how good my diapers were, how they were priced, where I sold them, or how much money I spent on promotion if my market was single people with no children.

And this is why the fifth P is so important. While many have suggested a fifth P in the past as a part of the marketing mix for such elements as People and Process, I believe a different P is required as so many products seem to ignore a key attribute for product success. I believe the fifth P of marketing should be Problem, and it refers to how well your goods or service can actually solve a target customer's problem or meet the need they have. How many times have you seen a new product hit the market and wondered just who would buy this and why? Without an understanding of your customers, their problems, and how your product can address those problems, you will be rolling the dice with your company's money with each new product release.

And when I speak of customers' problems, I am not just referring to the problems they tell you about or the shortcomings they find with your products or your competitors' products. I am referring to the entire scope of potential problems the customer has and how your offering (which includes your goods or service, as well as distribution channel, website, method of promotion, sales process, customer support, and others) can help solve those spoken, as well as unspoken needs. The following are some obvious ways you can solve your customers' problems with your offering:

• Making their life easier
• Making them more efficient at their job
• Overcoming the issues they have in finding the products they need
• Resolving the difficulties they have in purchasing the products they need
• Reducing their total costs
• Giving them more free time
• Eliminating waste
• Providing them joy

It is through VoC that you will begin to understand the fifth P, the problems a customer faces and how you can create a meaningful solution to their needs. In a simple way, a well-executed VoC initiative will allow you to provide a solution to the customer's needs (even if he doesn't know it yet) and allow him to buy it in the way he wishes. And how well you can solve the customer's problems will be directly related to the value they will perceive as a result of buying your product or service.