Thursday, March 5, 2015

War between Marketing's 3Ps & 4th P

According to American Marketing Association (AMA), marketing is the activity, set of institutions, and processes for creating (Product), communicating (Promotion), delivering (Place), and exchanging (Price) offerings that have value for customers, clients, partners, and society at large. Fundamentally, sales should be the subset of marketing and not considered to be different from it. But in reality this is not the case.

While every other discipline including branding, advertising, market research is under the umbrella of marketing, sales is set up as a complete different department.

In real scenario, marketing department handles promotion,branding and advertising based on market research and sales department engages into distribution and making product available to the customers. Marketing department handles 3 Ps of marketing mix i:e product, price & promotion and sales department handles 1 P, i:e place.

Sales and marketing are considered as India and Pakistan, be it in terms of their origin or in terms of their disputes. Just like India and Pakistan are children of same mother, sales and marketing have also evolved from same source which is marketing.

There has been a serious war between 3Ps on one side and 4rth P on the other side, to get more attention of the managing board in order to get more funds. This war is often not handled effectively by companies and they start differentiating between the two and fail to understand that both of these are as important as two sides of a coin, coin is worthless if either of them is absent.


Let us take a case of three men visiting a modern retail store to buy some groceries, Mr. Tom, Mr. Dick & Mr. Harry.
They all want to buy some noodles for their home and went to noodles section in retail store.

  1. Mr. Tom picked up Nestle Maggi noodles
  2. Mr. Dick picked up Horlicks Foodles noodles, and
  3. Mr. Harry picked up ITC Yippee noodles

Now the question which now arise is what made the sale of three different brands of noodles?
whether they were 3Ps which made the sales or the 4rth P which did the job?

There are many things which can influenced the sales of product like noodles

  • Brand consciousness of buyer
  • Price consciousness of buyer
  • Discounts and promotional scheme offered by retailer
  • Shelf space of a product

  1. Mr. Tom is a brand conscious man and thus purchased Maggi noodles because it comes from the house of nestle and has established itself as a reliable brand.
  2. Mr. Dick is influenced by shelf space and price and purchased home brand because it was given maximum shelf space and least price with a promotional offer of buy one get one free.
  3. Mr. Harry at last is a discount conscious man with some sense of brands and purchased Yippee noodles as it was offering a promotional offer of Sunfeast biscuit worth Rs. 10 free.

This was one case of purchase made by three men and their regular behavior. Now taking another case, a bit different one, one fine day, all three men went to buy groceries to retail store and again went to noodles section and this time,

  1. Mr. Tom picked up ITC Yippee noodles
  2. Mr, Dick picked up Horlicks Foodles noodles
  3. Mr, Harry picked up Horlicks Foodles noodles

Why there is a change in purchase decision of Mr. Tom and Mr. Harry.

  1. Maggi noodles is out of stock and thus brand conscious Mr. Tom went for a lower known brand Yippee noodles.
  2. Foodles noodles is also offering a discount of buy one get one free and it being sold at a lower price with a better shelf space catches attention of Mr Harry in a much stronger way than Yippee did.

After analyzing this case of purchase of such a general item of every household grocery list, can we say if marketing is responsible in getting a company profits or is sales making fortunes for the company?

This case showed three customers with different buying behavior, buying different noodles according to their preferences of the product specifications.



In first case of first customer, although marketing did its job in alluring brand conscious Mr. Tom to buy Maggi noodles, but later on when sales department did not met the demand of the retail store and it went on stock out situation, Mr. Tom shifted to Yippee.
Thus the whole marketing efforts by Maggi noodles went in vain because it was not able convert it into sales of product.


In second case, Mr. Harry shifted to Foodles noodles as he saw its advertisement on TV and therefore formed a perception of it being a good brand, whereas last time he did not recognize it as a brand and purchased Yippee.
Here the sales promotion scheme of Yippee noodles got overpowered by a TV commercial of Foodles noodles and thus sales department of Yippee was not able to make sales of product.

In first case marketing department was unsuccessful without sales and in second case vise versa. Therefore, each is incomplete without other, and both are equally important for achieving goals in any cut throat competitive industry which is every industry.

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