Comments on: Retail in China: Traditional Marketing 4Ps Still Relevant

By: Paul Barsch

Paul Barsch — Fri, 10 Apr 2009 14:55:50 +0000

Dusan, you have made some very powerful points that bear repeating.
First, a fair percentage of marketers are most comfortable with communications and marcom functions. This is definitely a subset of marketing, but not one in the same. Second, we should not rush out to create new C’s or P’s when we haven’t taken full advantage of the 4Ps as summarized since the 1950’s/60s. Third, much of the focus – all the rage these days is social media (which is important) but is geared towards the online channel. There are many more channels in which to interact with customers. Fourth and last point, all customer interactions whether they are online or offline, should be captured into an analytical infrastructure for data collection, analysis and then action or execution on learnings gleaned from analysis. This is the next big paradigm shift in marketing.
Thank you for adding your experience and wisdom to the conversation.

By: Dusan Vrban

Dusan Vrban — Fri, 10 Apr 2009 05:52:44 +0000

Paul, I’m certain that 4Ps paradigm is very bad understood. Actually, 90% of its power is unused. At least in our environment.
Reasons?
1. Marketers don’t understand it completly.
2. Marketers prefer to work on communications.
3. Other company departments see marketing only as a communication/sales function.
4. Everyone wants to be Kotler, so everyone wants to come up with “new emerging incredible marketing social future tools”. That includes new P’s and C’s discovered.
Marketing actually doesn’t need a paradigm shift. If you look closely at 4P’s, you’ll find everything there (yes, even social media is there). If you don’t want to look at it, you won’t find anything.
Finally, to me 4P’s paradigm shift is the same unexploited as CRM models. We can go to 1on1 social media models – but if we don’t understand databases, it’s useless.

By: Paul Barsch

Paul Barsch — Thu, 09 Apr 2009 14:16:56 +0000

Dusan, thank you for commenting! Is it your premise that not only are the 4Ps misused by most marketers, but also that they are not well understood? Or is it that some marketers just don’t care about customer needs and are going to push product anyway- regardless of fulfilling customer desires?
I believe there is a lot of potential in spending more time and going back to basics before we progress to potentially other Ps. Still too many products and services in search of a market…

By: Dusan Vrban

Dusan Vrban — Thu, 09 Apr 2009 12:10:53 +0000

While I can agree with Camille that a shift towards user needs is needed, I’m affraid that even the concept of 4P’s has been widely misused and misunderstood.
In my masters work, I’ve actually propsed switch in customer satisfaction measurment.
Instead of measuring
how much a customer is satisfied with part X of our product,
We should be measuring
how much our product satisfies need X (need of food, socialising,…) of the customer.
Now – even tough my work was focusing on customer satisfaction measuerment shift, I came to conclusion that there are other dangers to marketing in this path. Mainly – interpration and cooperation to/with other departments in the company.
Even now marketers have tough time explaining 4P’s (and saying we should develop the products). Going into customer needs – well, noone in the company that makes computer monitors will ever understand that they should be perhaps satisfying customer need to socialize.
As for china communications with customers… it’s complex. I think that it depends on who the customers are? (Denmark customers are way different then Italian)

By: Paul Barsch

Paul Barsch — Wed, 08 Apr 2009 16:31:52 +0000

Claire, there’s a great HBR article where Gallup surveyed Chinese consumers and discovered that there are indeed differences in sentiments for Chinese brands among young vs older consumers in China. It is probably the same article you read, although I cannot be sure.
Dissecting the differences in brand sentiments of various demographics in China would make for a terrific post all by itself! Something to consider anyway, right? Thank you for commenting and adding your insights!

By: Paul Barsch

Paul Barsch — Wed, 08 Apr 2009 16:21:51 +0000

Ted, it’s sometimes difficult to not get too frustrated with blanket commentary such as “the 4Ps are dead” or “here are the new 4Ps…”, especially when the 4Ps are alive and well, as you said, “no matter what market we’re talking about.”
It is going to be very fascinating to watch (and participate) in the evolution of marketing in China as Chinese consumers get much more savvy and expectations increase. The growing middle class (estimated at 200-300 million) will make sure that it will be an interesting ride!
Thank you for taking time from your busy day to share your thoughts!

By: Paul Barsch

Paul Barsch — Wed, 08 Apr 2009 16:10:42 +0000

Camille, you bring up a terrific point. There are more than a few case studies available where Western companies have sought to standardize their Western best practices in operations, marketing etc for emerging markets. The result of many of these efforts is a quick realization that these “global” strategies don’t work and that they must in fact take a local approach to the market. In some instances, this means tearing up the corporate playbook and starting anew in the emerging market.
I appreciate your insights and thanks for commenting.

By: Claire Ratushny

Claire Ratushny — Wed, 08 Apr 2009 15:26:13 +0000

Interesting, Paul. I’ve done a bit of reading about the Chinese consumer market. It seems that the older generations of Chinese prefer to continue to purchase heritage Chinese brands. Younger consumers are dying for anything and everything Western–even beginning to go through the status acquisition phase young Japanese and Eastern Europeans embraced a few years ago. Cultural considerations are very important for Western companies to understand when trying to do business in China. Traditional marketing concepts can be molded to fit this market and ought to be in play. As young people purchase PCs, SM can be added to the mix, but conventional marketing is going to have to be front and center from what I can see. Good stuff, Paul.

By: Ted Mininni

Ted Mininni — Wed, 08 Apr 2009 14:59:15 +0000

Nice post, Paul. I lived in Taiwan for a while and it’s nice to see formerly closed markets like China opening up. Some marketers may think that since it is in essence a developing market, China is going through the traditional marketing curve; that this doesn’t apply so much to mature markets. I’m not so sure. SM is great and it gives marketers another valuable tool to glean consumer insights and engage in conversation. But traditional, basic marketing is also essential, in my view–no matter which market we’re talking about.

By: Camille Schuster

Camille Schuster — Wed, 08 Apr 2009 14:56:07 +0000

As a marketing professor I do think the approach to the 4P’s needs to be altered and tend to talk about the 4C’s: consumer, cost, choice of delivery, and communication. This approach puts more focus on consumers and what they want.
This approach is even more critical for doing business in other countries,
China in particular. Consumers in China have a different approach to buying, perceive “value” differently, rely more heavily on mobile technologies for communication, and often pose a challenge for delivery.
Definitely the approach used in the US or Europe can not be duplicated in China. There are enough companies who have tried and left to provide an example of the need for adaptation.
Understanding the consumers and orienting the delivery and promotion of your products around the consumer behavior in a particular county is critical for success.