Tool Box
Issue No. 8 - December/ 2002/january
Not Just the 4Ps
How markets really work
by Dr David Corkindale
Anyone who has ever done a formal Marketing course will remember, if nothing else, that it is supposed to be about the four Ps —product, price, place and promotion. It is clearly suggested in courses and textbooks— with one honourable exception* —that whichever company creates the best 4Ps in its market will win. Right? In an exam, yes, but in the actual marketplace: wrong!
Most practitioners and particularly those in new businesses and SMEs experience the reality of the inadequacy of the 4Ps formula. A well-established and successful professional services company in Adelaide took some of its best-qualified people and set up shop in Perth. They did everything right in terms of the magic 4 Ps—they were capable of doing good work ( their 'product' was better than anyone elses), their fees were attractive, their office and promised service level was excellent and they promoted themselves well. Little business came their way. Something is clearly further needed to gain response in the market place: the 4Ps are necessary but not sufficient. In the example just quoted most people will quickly recognise what's missing. The newly set-up professionals in Perth had no: track record there, network of referrals, links to complementary professional service providers who would team up with them on big projects, 'presence' in the market. If you have no past evidence of doing good, reliable work it is difficult to have a present. So, another necessary ingredient to getting a response from the market place is an established presence or what is called by some, market-based assets. As the diagram, below shows, it acts as a multiplier effect: if you have zero market-based assets you will probably have near zero sales. A big spend on advertising and/or PR is no real substitute usually: clients stick with what they know and trust.
The list of items making up Market-based assets above is not exhaustive. To it could be added, for some markets, th...
