Tuesday, June 17, 2014
IHA’s Global Forum kicked off with Jonathan Knowles’ engaging presentation that updated the traditional 4 P’s of marketing—product, price, place and promotion—for a fresh approach to marketing in today’s global business-to-business environment. Those earlier strategies lead marketing and sales teams to stress product attributes that are no longer differentiators but now are simply the cost of market entry.
Working with partner Thunderbird professor Rich Ettenson, Knowles used insights from the results of a five-year study of more than 500 managers and customers in multiple countries and across a wide range of B2B industries to reframe the 4 Ps as SAVE: Solutions, Access, Value and Education.
By shifting from B2C instead of B2B, the new approach considers not what product the customer might want, but how the marketer can contribute to the business success of the customer. Knowles began by quoting noted management theorist Peter Drucker who said, “What the customer buys and considers value is never just a product. It is always a utility, that is, what a product or service does for him.” Knowles explained definitions of customer and shareholder values and how to create, communicate and deliver value to customers to enable a business to earn a strong margin. He addressed the common organizational conflicts between finance and marketing and how product launches must result from a well-integrated strategy of both in order to satisfy customers and deliver financial success.
Redirecting the 4 P’s to SAVE
Knowles contrasted the standard 4 P’s with the SAVE framework:
- Instead of product, focus on solutions—define offerings by the needs they meet
- Instead of place, focus on access—develop an integrated cross-channel presence that considers customers’ entire purchase journey
- Instead of price, focus on value—articulate the benefits relative to price, rather than stressing how price relates to production costs, profits or competitors’ prices
- Instead of promotion, focus on education—provide information relevant to customers’ specific needs at each point in the purchase cycle.
Knowles referenced the classic psychological tool of Maslow’s hierarchy of incrementally more complex human needs. He advised us consider how our offerings address the basic requirements of physiological survival at the base with layers for safety, love/belonging, esteem and self-actualization at the tip of the pyramid. Understanding rational B2B or B2C customers, we can identify how to satisfy expectations for performance, risks to avoid, community, status and meaning while differentiating ourselves from our competitors.
After explaining SAVE, Mr. Knowles led the participants in two workshop-based exercises to apply the concepts to their company’s challenges. In the morning, he asked that people mingle and work for 40 minutes in groups of three to discuss seven questions about each of the following areas:
- Summarize your current business environment
- Assess your current solutions readiness
- Rank priority areas for improvement
To read more, click here.
Mr. Knowles, CEO of New York-based Type 2 Consulting, is the author of the book, Vulcans, Earthlings and Marketing ROI, and many articles that have appeared in the Wall Street Journal, Harvard Business Review, MIT Sloan Management Review, Intellectual Asset Management, Professional Investor and in the AMA’s Marketing Management magazine.