Leadership and marketing

Organizations are more than their product

Marketing is one of those disciplines of which many leaders probably think: thank goodness that it is a department. This of course is the wrong thought. Because marketing in essence is the product an organization sells.
Most small to average size organizations however, think that they are selling a specific product to their clients, for example a machine or a hamburger.
Most clients think they are buying a machine or a donut they crave for. But in reality an organization sells a combination of elements, of which the product is only a part.

A leader should look at the total organization as a product that is to be sold. That would give the insight why it is necessary to address the 5 P’s of the marketing mix as well as the 4 C’s of the consumer mix.

The 5 P’s were short for:

Product:
	What are you selling? The next cash cow or do you have a dog in the house?
Place:
	As real estate agents will say: Location, location, location
Price:
	Are you offering the lowest price? Or are you being exclusive? Or is the relation between price and performance more important?
Promotion:
	Is the products existence known to the public and does it look good?
Personnel:
	Is everybody motivated to sell the product or are they selling because they get paid to do so?

A variation on the 5 P’s is the 4 C’s put forward by R. Lauterborn (ref. 1, ref. 2, ref. 3, ref. 4), which I first encountered in an article by John Koster and Ed Peelen on managementsite.nl “Komt het nog wel goed met marketing?” (Will marketing be alright?):

Cost:
	Which effort must the customer make: personally, financial or physical?
Customer needs:
	What is it the customer wants to buy: a product or its use?
Convenience:
	What can be done to live up to the expectations of the customer in price, place, promotion, product and personnel?
Communication:
	How does the customer want to be addressed?

When we use the 5 P marketing mix to answer the questions of the consumer mix, you get the following questions:

Cost:	Product
	How much trouble is it to us a product (almost everyone has something at home, that after onetime use disappeared into a closet or drawer, because of the difficulty to use it or get help from the manufacturer.)
	Place
	How far and how long should a customer travel to get his product. And what should he be paying once he has arrived at his destination? (An example of how this is solved, is the free parking ticket for the car park.)
	Price
	What should a customer pay for the product? And does this price seem reasonable compared to what he is getting and needs to do?
	Promotion
	Is the PR directed at the customer or was it made for the PR department? Is the packaging and the user manuel clear and understandable? Is there a help desk and is personnel available?
	Personnel
	Is it the customer who is excerting himself to reach a member of the organization or is the personnel that tries to reach the customer with a friendly attitude? You might say is the customer there to keep the employees busy or are the employees there to help the customer?

Customer needs:	Product
	What is the intended use by the customer and is that the only thing it can be used for? Is the customer interested in this product or would he rather have a product that is less sophisticated but easier to use?
	Place
	Does the customer want a shop around the corner with everything for sale or does he want a range of shops. that all sell their own unique products? Does he want to spend a lot to get at the desired place or does she want it at walking distance? Does he want exclusivity or does she want what everybody is having?
	Price
	Is the price unimportant as long as the product works the way advertised or should it give more for a low price?
	Promotion
	Is the customer interested in thinking for himself or should you make him laugh? Should your PR be understandable or should it challenge the customer to understand what was meant?
	Personnel
	Should the customer be searching and waiting for help or should the customer be treated like a king?

Convenience:	Product
	How much effort should it take the customer to use the product? How can the customer be helped to start using the product as soon as possible?
	Place
	How easy can you get to the location where the product is sold? What has to be done to get to the location? Could the product be brought to the customer?
	Price
	Does the price fit the expectations of the client? Or should the client be helped understanding what the price signifies?
	Promotion
	Is the customer getting the information he needs, or should the customer adjust to the information?
	Personnel
	Is the customer expected to search and wait for personnel or is he being pampered like a baby?

Communication:	Product
	Is the product telling the customer that it is easy to use and understand or is a product for professionally trained users.
	Place
	Does it say: “come on in” or more something like ”get out and stay out.”
	Price
	Is it a price of exclusiveness or inclusiveness? Does the adjust to the customer or should the customer adjust to the price?
	Promotion
	Is it about the customer or is the product and the organization central to the information given? Do we think and tell the customer we think his mental capacity is hindered or do we think he needs to be informed to become knowledgeable?
	Personnel
	Is it clear that the employees think that the customer is important and do they show it or is the customer a buggy side effect of working for this company? Is the customer right or the employee?

Examples of how organizations and their leaders have trouble connecting their product and customers, are easily found. Take for example the automotive industry. With the exception of a few brands most are doing worse every year. Toyota has almost overtaken GM as biggest car maker of the world. Where GM is closing factories and cutting salaries.

What is causing this difference?
Because Toyota puts the customer and his wishes central and also communicates this with its vehicles and service. GM however still thinks that all its customers want is a car with the GM logo somewhere on the car.
But not only the automotive industry is an example. The educational system also thinks its knows better than its customers. The biggest part of the educational system still focuses on content delivery. Instead it should be looking at what is needed to help their customers learn what is being taught and what the customer is going to do with that knowledge.
It would be good if leaders understood that their product is not what the customer takes with him when stepping out of the door, but that its the whole package from the first glimpse of an idea for a product up to the moment the product will be recycled.