In 1990, Robert Lauterborn – a pioneering economist – proposed a new improvement to the famous 4Ps Marketing Mix model. This model quickly received public acclaim and was called under a new name: the Marketing 4Cs model.
As we all know, the 4Ps model is a marketing mix model aimed at businesses, including 4 main components: product (product), price (sale price), promotion (marketing programs). market), and place. The 4Cs marketing mix model is more radical, taking customers as the center. The 4Cs model includes: Consumer (consumer), cost (cost), communication (communication), and convenience (convenience).
In addition, the 4Cs model focuses on niche markets, instead of focusing on a broader environment such as the mass market (through a direct focus on the core customers of the business). Karma).
In the mass market, businesses often rely on the products they provide to set strategies and directions for development. Therefore, the ingredients contained in the product have very few elements that customers really want.
Businesses have to spend millions of dollars just to close the gap between what they provide and the needs and trends of the outside market. Even the investment (as above) cannot guarantee them to get the correct answer from the consumer, because “nine people and ten ideas”, how to please the god groups of countless different segments.
Niche markets make it possible for businesses to build engagement on an almost one-to-one basis. Obviously, focusing on a focus group of customers will help businesses almost pour all their resources into a single area, helping them to determine exactly what the needs of that customer file are, what they want and “desire” to receive.
This is an opportunity for businesses to explore the potential of a market that is not too fierce, and at the same time can reap huge profits just by focusing on meeting the needs of a specific customer group.
Marketing mix model 4Cs
Consumer – Needs and wants of customers
According to the 4Cs model, businesses should only sell products that meet the real needs and wants of customers. Therefore, the first job of every business when developing a new product is to survey the market’s needs.
Businesses can use different methods to do this work, such as Jobs-to-be-done (or JTBD), a theory that helps businesses understand the relationship between customers, hope their wants and the products they use; and conduct results-centered surveys.
Once this work is done, the goal of your business is to use tactics that can attract the focus group of customers in a one-to-one direction (i.e. focus on only one customer group). only).
Products are the core of marketing activities. In fact, marketing is just a small piece in a big question mark. The product of the business needs to be the answer to the needs and desires of customers buying the product, eliminating the competition from outside competitors.
The wisest course of action here is to approach the primitive (untapped) market and develop a product in that market. It’s far more effective than trying to cram an existing product into a market you think might be interested in it.
The goal of businesses here is to understand the value that the product can bring to customers through the eyes of the business and more importantly, of the customers themselves.
Cost – Cost
The selling price of a product is only a very small part of the total cost that customers can spend in the process of buying and using the product. This total cost (often expressed in terms of total cost of ownership) is influenced by many factors, from the time it takes them to make a decision and purchase the product, to the convenience of the purchase. products, to the costs they need to pay for product warranty and repair.
It can also include an opportunity cost, the cost in case they choose your business’s product over your competitor’s.
Many business managers mistakenly believe that the main motivation for customers to buy a product is the price factor. Market positioning is even more important, as it directly affects the value that customers receive. The selling price can be a tool used to position the market.
However, in the long term, it carries more risks than benefits. You should remember: the selling price is only useful when the cost that customers spend in the process of using it must be lower than the cost they spend when buying.
One point to note here is that businesses need to focus on other cost factors, not just focusing on the selling price factor. This will help improve the customer’s experience with the product, and at the same time make it easier for businesses to increase the selling price of the product (in line with the enhancement of the value that customers can receive when using the product). Products).
Communication – Communication
With the development of social networking platforms and the vast connected Internet space, the concept of “communication” is now more open than ever. It represents a complete focus on the customer’s experience of purchasing and using a product.
Today’s communication activities require multi-way interaction and connection, instead of just a traditional one-way business-customer relationship.
The 4Ps marketing mix model uses promotion as a tool to communicate product information to customers, and that’s it. While this method still proves to be effective, the budget limitation makes this one-way communication activity potentially many uncertainties, especially how to ensure that information can be communicated to the right audience. central customer image.
Instead, the 4Cs model focuses on the interaction between businesses and consumers, ensuring information is communicated accurately to the target audience. Of course, this requires much more effort and challenge. Communication activities require businesses to build solid relationships with customers, based on trust between the two parties.
This includes all kinds of paid advertising, PR , viral communication, and any other methods. Many businesses apply integrated marketing communication (IMC) model to reach and build relationships with customers.
Convenience – Convenience
And the last aspect in the 4Cs model is Convenience – convenience. In a world with so many choices for customers, you need to understand exactly what specific characteristics can determine customer buying behavior. When you understand those factors, you need to change to adapt to the times.
Like now, customers may not want (or can’t) take the time to shop through physical stores. What drives their purchases? Another aspect we need to pay attention to is the convenience and ease of shopping.
You need to build a shopping channel, as well as the most convenient experience for customers so that they can find you easily. Distribution channel on online platform (e-commerce style) is a smart solution.
The Place factor in the traditional 4Ps model focuses more on the physical delivery process. In a more up-to-date version of the 4Ps, economists put convenience in the customer’s shopping process at the heart.
In other words, they care more about enhancing the customer experience. Obviously, this is an innovative point of view in a society that is changing hour by minute.
Read more articles on Marketing at Malu Blog .