Understanding the 4C’s of the Marketing Mix
In this article, we will look at 1) an alternate marketing mix, 2) the 4C’s explained, 3) using the 4C model, and 4) an example of the 4C’s.
AN ALTERNATE MARKETING MIX
Traditionally, the marketing mix is a combination of 4P’s and is more business oriented. These 4P’s are product, price, place, and promotion. More can be read about it here.
Another version of this marketing mix is the 4C’s model. This model is more consumer oriented and this focus has led to a primary use in niche marketing. This does not exclude it for use in products serving a mass market however. This alternate marketing mix is made up of four key variables:
The 4P’s and 4C’s can be taken as two sides of the same coin, with one being a buyer’s perspective and the other, a seller’s. But considering the marketing mix from a 4C perspective is not just an exercise in semantics. Instead, it reflects a change in mindset to encourage marketers and executives to view their entire process and value chain from the customer’s point of view.
Development of the 4C Model
According to Annmarie Hanlon of Smart Insights, there are two 4C models within the marketing domain which should not be confused with each other. One is the 4C model for marketing communications. This was put forward by Jobber and Fahy in 2009, and is a combination of four factors: clarity, credibility, consistency and competitiveness.
The other model relates to the marketing mix and was proposed by Lauterborn in 1990. The Lauterborn model is what we are focusing on for entrepreneurs in this article.
The idea or this model stems from an article written by Bob Lauterborn in 1990. This article was featured in Advertising Age, and in it Lauterborn stated that the 4P’s were no longer relevant and did not help today’s marketer address any real issues. He listed the variables he felt were necessary instead. He began with ‘consumer wants and needs’ as the key focus for product-led companies who tend to make products that the customer does not want. His second variable was the ‘cost to satisfy’ based on the irrelevance of price among many other factors. The third factor is the ‘convenience to buy’, an interesting concept in today’s world of 24/7 availability. The last variable was ‘communication’, with a proposal that instead of a more manipulative promotion, communication should be a two-way dialogue between the customer and the company.
THE 4C’s EXPLAINED
The Goal of the 4C’s
Through its focus on the customer, the 4C’s marketing mix is a step away from the traditional mass marketing concept. In mass marketing, the company selling a product has a tendency to view the audience as just that – a large featureless mass – with no in depth understanding of what the customer truly wants from a product. The 4C’s divert action towards niche marketing instead, where the conversation is often closer to one-to-one and there is more of an effort to understand who the customer is and what their actual needs are.
For niche marketing, it is necessary to access detailed market research to identify those markets which are not rife with competition but may prove to be lucrative. Once this kind of market is identified and understood, the 4C’s can be brought into effect.
What Are the 4C’s?
In studying the 4C’s, it makes sense to view them in comparison to the incumbent 4P’s for a more detailed view of both marketing mixes. It may be in the best interests of a marketer to consider both the consumer’s point of view and the organization’s.
1) Consumer (and Product)
Here, instead of beginning the story with a product itself, the focus is on selling only what the customer specifically wants to buy. This means that it becomes an absolutely vital activity for the marketer to spend time studying these consumer wants and needs in-depth. Only this detailed understanding will allow a company to sell with accuracy what the customer will buy.
At the core of any marketing effort is the product itself. This however, is just one piece of the puzzle. The product must be something that the customer finds desirable and there must be something unique about it that sets it apart from all the rest of the competition. The most effective way to achieve this is to first find the right untapped market, and then develop the product instead of trying to fit a ready-made product into a market. Product testing, therefore, becomes a key element of both the product variable and the customer variable. The understanding should be of what the product can give the customer both in the eyes of the manufacturer and in the eyes of the consumer.
2) Cost (and Price)
When understood correctly, the cost variable gives more detailed information about the customer than the price variable does. A good way to understand the difference in price and cost is given here. Price is the amount of money that a consumer will be willing to pay to acquire a good or service. On the other hand, cost is the amount that goes into the production of a good or service. This is the sum of the value of all inputs to production such as land, labor, capital and enterprise.
Within the total cost to satisfy a customer need, price becomes one of the many factors. Other factors may include the cost of time to acquire the product, the cost of conscience when it comes to consuming the product, the total cost of ownership, the cost to change to a new product and the cost of not selecting an alternative.
There is a common misconception among marketing professionals that the main motivation for a product purchase is the price. Though price based positioning may provide some initial success, in the long term, this turns out to be a less successful move. If the product is given a price that undercuts cost to gain the market, then the company will be at a disadvantage. If the product is priced at a premium without understanding its value to a customer, it will never be purchased.
Instead, a focus on cost to satisfaction will mean that there is more important information being taken into account than just the purchase price. A focus on this C will help find ways to actually increase the price of the item while decreasing the cost to satisfaction through measures that have a minimal influence on the company’s bottom line.
3) Communication (and Promotion)
Lauterborn considers promotion to be a manipulative factor driven only by the seller. Instead, he viewed communication as a more cooperative activity and driven more by the consumer of a product.
A traditional marketing mix uses promotion as a tool to put information about the product in front of the customer. Promotion and its methods continue to evolve with new avenues and means to reach the consumer. Though these methods of promotion remain effective, a niche marketing focus needs a bit more.
Communication will work toward creating a meaningful relationship with the customer with a focus on what they need and what their lifestyle is. The focus is wider and more inclusive of the different forms communication can take. There is more of a give and take between buyer and seller. Looking at advertising as this form of communication can help a marketer understand their market better and increase sales and customer loyalty.
4) Convenience (and Place)
The proliferation of online marketplaces, credit cards, catalogues and cell phones has made the provision of products to the customer a whole new ball game. A customer is not bound to actually go to a physical location to meet a need and there is an endless variety of places online to do so. This means that a marketer needs to be aware of how a particular customer group likes to make their purchases in order to make it convenient for them to buy. While place from the 4P model took into account the traditional value chain involved in getting a product into a customer’s hand, the convenience variable considers much more.
USING THE 4C MODEL
For a small business owner, the 4C’s can provide a much needed edge over the customers if understood and used in the best possible way. This model can also help a small business take on bigger and more established competitors. The key point, repeated often, is to remember to identify and understand target consumers as well as their needs and wants. The next step is to offer tailored products and services that are meaningful to the customer and can lead to increased sales.
A very easy way to use the model for an entrepreneur is given below. There is a simple template that can be used as well as a few key questions to ask.
Quite simply, the company can list the current situation for each of the 4C’s in the first column. In the next column, a benchmark organization can be used to compare. This can be a top competitor for the organization and one it aspires to beat. The last column can be used to highlight actions that can be taken to reach the desired position in the market.
Some questions to ask regarding each of the 4C’s include:
- What is the competitive advantage?
- Who is/are the most appropriate target customer(s)?
- What are their needs and wants?
- What is the product or service worth to the consumer?
- Is the customer driving all decision making?
- What is the price you mean to charge the customer?
- Has there been adequate research to determine this amount?
- Is this figure reasonable and affordable?
- Is the figure profitable for the company?
- What is the total cost that a customer will incur when acquiring the product?
- What considerations apart from price will encourage a customer to buy?
- Is the value of the product to the customer enough to support all the costs?
- Is there a communication plan in place to ensure meaningful customer dialogue?
- Is the link between this communication and resulting customer confidence and sales understood?
- Does the communication answer questions the customer may have such as, ‘What’s in it for me?’
- Is there a social media strategy planned to both promote a product and gather customer insights?
- Is there a plan to adapt communications to each of the target markets?
- What are potential barriers a customer may face in locating and purchasing a service?
- How do you plan to remove these barriers?
- Do you have an informative and easy-to-navigate website in place?
- Is the website optimized for mobile use?
- If you sell online, are the purchase, payment and fulfillment processes secure and intuitive?
- Is your product available to buy through multiple channels?
- Is there adequate customer support in place?
EXAMPLE of USING THE 4C’s IN CONTENT MARKETING
The 4C’s of marketing can be very valuable for marketers looking to generate consumer oriented and relevant content and product messages. The 4C thinking will help these marketers connect with their audience and turn the consumer into an advocate of the brand.
- Consumer – The content should be focused on the customer and not on you, the company. This means the content needs to be full of useful insights, tips, best practices and news for the audience to use in order to meet their needs. From a practical perspective, the audience is more likely to keep coming back for content that relates to them directly instead of to the company. As an example, a fashion retailer should give tips on how to dress for a particular season or event, insight into trends and how-to guides, among others. This approach helps build lasting relationships with consumers, keeps bringing them back, and turns them into advocates for the brand.
- Cost – This includes not only the monetary cost of the product, but also the cost of using it. In content marketing, this means that an article needs to be easy to read, have a practical yet attractive layout and the right language. Cost-effective content will mean a well written and well-presented website which is easy to navigate and is optimized for different screens and people.
- Communication – The internet has offered the savvy marketer a variety of options for forming communication links with their target audience. From Instagram for photos, to Twitter for promotions, YouTube for detailed videos and Facebook for networking, there is an ever-increasing pool of options to choose from based on what the audience requires. The right channel for the right audience is what helps ensure successful dissemination of the message.
- Convenience – In a content marketing situation, convenience will translate into how often the consumer reads the content. Any number of factors will reduce this convenience, such as too many pop-ups or adverts or lack of optimization for a mobile device. Even with good search engine optimization, it may not be enough to assume that the consumer will find you. Instead the content needs to be easy to access through multiple channels such as email, newsletters, blog features and social media posts and reposts.
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