The Fifth ''P'' of Marketing
To say that a lot has happened recently to the world of marketing and managing customer relationships would be an understatement. Since the days when marketing managers were schooled in the marketing mix of the four "Ps"--Product, Price, Place, and Promotion--practitioners have applied these fundamentals in time and battle-tested ways, ever honing their craft.
Then came the Internet. Marketing as we have known it is undergoing a radical transformation as the Internet plays an ever-increasing role in consumers' lives. Just one year ago, who could have predicted that the market capitalization of Google would exceed Ford and General Motors combined ($60 billion versus a combined $32 billion at the time of this writing)? For consumers, the Internet has become the primary research tool used to determine the best car to purchase. And for auto manufacturers, the Internet is now the path to reach and learn from these consumers--providing automotive professionals with a vastly better way to quantify and qualify the most important aspects of consumer attitudes, shopping behaviors, vehicle demand and the conversion of demand, to sales.
The Internet has enabled customer acquisition techniques and efficiencies that were never before possible. It has also enhanced the quality of intelligence and accelerated its availability. Given this new era, we can no longer rely on the traditional "Ps," lest we fall victim to what marketing guru Ted Levitt referred to as "marketing myopia." The fundamentals are no longer adequate to effectively win and keep consumers and, as such, a powerful new entrant--a fifth "P"--has emerged in the marketing model.
The fifth "P," which stands for Process, calls for grounding tactical and strategic marketing decisions in the insights that can be drawn from online consumer data and leveraged across the predecessor Ps. With Process, online data regarding consumer preferences and shopping behavior is used to precisely pinpoint, measure, and analyze consumer activity and build more effective marketing programs that cost-effectively increase sales and profit per vehicle. With more than two-thirds of new vehicle buyers going online to research purchases before buying a new vehicle, insights derived from these data can be used to develop highly customized marketing programs geared toward consumers' specific purchasing behavior. Imagine, for instance, if marketing executives had the following information at their fingertips:
Quickly validating that marketing is reaching the target audience Knowing how many shoppers are needed to reach a vehicle's monthly retail sales goals Being able to optimize across creating more demand (advertising) and increasing the conversion of demand (incentives) Identifying ways to capitalize on maneuvers by rivals
In short, Process, powered by online data, enables companies to quickly optimize the return on their marketing investments and drive overall marketing efficiency. It is no longer enough to place a product and price and promote it; instead, marketers must connect the dots and use data to its fullest advantage to transform the way they identify and reach potential buyers.
There are seven stages to successfully incorporate Process into marketing and CRM program development:
1. Identify key market drivers
2. Harness the power of online consumer data
3. Understand key technology enablers
4. Determine optimum marketing processes
5. Highlight major consumer optimization
6. Establish success metrics
7. Evaluate, enhance, and repeat all the above stages on an ongoing basis
The most successful players in this new age will be the cutting-edge companies that inculcate Process and its seven stages into their marketing plans. In the automotive industry specifically, where leveraging the full power of the Internet is still a developing trend, embracing online data to attract and retain customers will be a key strategy.
Automakers need to proactively use the Internet and its wealth of consumer information to act, change, optimize, and enhance their marketing strategies. Decisions based on ad-hoc data are outdated and financially irresponsible. They need to be replaced with those fueled by actual behavioral data. By analyzing their own performance relative to their rivals, automakers will have the ability to quickly adapt to successes and trends within the industry.
While you read this article an estimated 320 new vehicles were purchased in the U.S. alone, with an estimated $8 million in sales generated. Now imagine the possibilities of incorporating the fifth "P" with the full potential of the Internet to generate even more impressive and successful results. The data is out there, but it is only as valuable as the process behind it.
Bonita Coleman Stewart is director, Chrysler Group Interactive Communications. She brings more than 20 years of marketing experience to DaimlerChrysler, including her recent responsibility for Chrysler Brand Communications. Bonita currently leads all interactive communications. Ms. Stewart has a BA in journalism with honors from Howard University, and an MBA from Harvard Business School. She can be reached at email@example.com.
Lincoln Merrihew is managing director of the automotive practice at Boston-based consultants Compete Inc. He directs Compete's automotive practice, leveraging his experience (including forecasting, analysis, consumer perceptions and behavior, vehicle contenting, residual values, dealer operations, owner loyalty, and remarketing) to meet ongoing demand by automotive manufacturers for strategic services. Lincoln has an MA from Boston University in energy and environmental science, and a BA from Dickinson College. He can be reached at firstname.lastname@example.org.