The other day I caught a reference on an episode of Mad Men to the Four P’s. The episode was set in the early 1970’s, which means Phil Kotler’s game-changing concept of the Four P’s (product, price, placement, and promotion) had just recently been published in his book, Marketing Management: Analysis, Planning, and Control.
This got me thinking: are the four P’s still relevant today as they were in previous decades? If so, how do they apply today for B2B marketing?
For the B2C marketer, I think the four P’s still make sense. But for the B2B marketer, I think there’s a P missing: problem. Why are business problems essential for the B2B marketer? Because consumer buyers and B2B buyers have very different buying habits.
Consumers don’t necessarily make purchasing decisions based on their needs in the same way that businesses do. Consider the pet rock. This product was a simple rock, marketed as a pet. It cost around four dollars and came packaged in a box and a nest of straw along with a 37-page instruction manual. In the year it launched (1975), the pet rock was selling at a rate of 6,000 per day. Ultimately sales climbed to more than a million.
What problem did the pet rock product solve? What practical need did it fulfill? None that I can see. Yet people bought them.
B2B buyers typically don’t make purchases unless there is a good business reason. They purchase products that can help them solve a business problem and/or help them make more money.
What do business problems look like? Here are six examples commonly faced by B2B buyers.
Their labor costs are too high.
Their cost of goods sold is too high.
Their cost to comply with industry regulations is too high.
Their shipping costs are too high.
Their average selling price is too low.
They’re not growing sales revenue as fast as they want to.
Unless you add “problem” as the fifth P to your marketing mix, you’re never going to have a winning, sustainable strategy. One of my colleagues wrote a great post about finding your sweet spot, which is the intersection of what your customers should want and what you are uniquely qualified to provide.
Ideally, you shouldn’t even begin to develop a product or solution until you identify and understand your prospective buyer’s business problems. After that, you can take the next essential step in the ROI selling process, which is to figure out how to get customers to care about solving their own problems.