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Here’s why decisions matter to the 8 Ps of Marketing


Some time ago I saw an article that discussed the 8Ps (4 old, 4 new) of Marketing. It seemed to me that decision making, especially operational/transactional decision making is critical to most of these Ps. Here, then, is my summary of the 8Ps and why decisions, and decision management, matter.

4 Ps

  • Product
    You might think that decision management has little to do with Product – after all, it’s about the actual product being sold, isn’t it? Well yes, but it is also about the warranty, support and guarantees that go with that product. Given the power of decision management to deliver great customer support (check out my review of The Best Service is No Service) and that warranty claims often require a complex set of business rules to be executed flawlessly, and I hope the linkage is clear.
  • Pricing
    Pricing is increasingly a dynamic exercise – what is the price of this product right now for this specific customer. This kind of pricing uses what is know about the customer, current levels of demand and much more to come up with an optimal price. This kind of price optimization is growing increasingly common – check out my post from InterACT on pricing optimization
  • Promotion
    Promotion of a brand on TV might not involve EDM, but once you start thinking about promotion on social networks or using targeted ads on specific websites then you are no longer making one big decision (how to promote the product) but many smaller or micro decisions (how to promote the product to this particular person on this website right now). This kind of intensely targeted promotion is increasingly common and very decision-centric.
  • Placement
    The last of the 4Ps is one that is increasingly being viewed as decision-centric by retailers, though not product by product. The retailers’ problem is how to place a whole range of products with different margins, different display characteristics, different contracts and much more. While the volume may not be huge – the number of stores multiplied by the number of re-stocking events (say once a day), the combination of moderate volume and high complexity makes this another great opportunity to use EDM to deliver better marketing – rules, analytics and optimization all play their part in these decisions.

That’s it for the original 4Ps but now there are 4 new Ps and these are really clearly linked to decision management.

  • Personalization
    Personalization is one of the major drivers for using EDM to automate and improve decisions in transactional systems and operational processes. Here’s an article I wrote on extreme personalization for instance.
  • Participation
  • Peer to Peer
    These two – participation and peer to peer – are part of the social computing revolution currently underway in marketing. While these two don’t directly require decision management to be done well, they do require it if you want to leverage the results of these Ps into operational systems. Check out this article on using social media with decision management.
  • Predictive Modeling
    The last one is the most obvious. The use of predictive analytics in marketing has exploded in recent years and decision management, EDM, is the   most effective way to put those analytic models to work in operational systems. Giving marketers high-level predictions is useful, making every system and every representative bake predictions into their day-to-day operations is even more so.

8Ps of Marketing and EDM. Perfect together.


Comments on this entry are closed.

  • Per Sjofors July 8, 2008, 7:26 am

    Thanks for shining the light on the most ignored of the 4 P’s, Pricing. Pricing is  becoming  more dynamic, and the various price  optimization software packages  available  from the dozen or so vendors can help some companies with their pricing  challenges.    But  price  optimization software is not for every enterprise; these packages require vast amounts of transactions to be effective, so unless your company is in the Fortune 500 AND the goods you are selling are  relativity  cheap, they are not for you.  
    For other companies, a process called Value  Optimized  Pricing typically yields a 10 – 20%  increase  in revenues. How can this be? A VOP enables companies to price their product to meet the true value  perceptions  of their  customers.    Well, all companies tries this, but the information base for the price decisions are typically really poor – instead of  statistically  significant data from their marketplace, most companies rely on personal  opinions. Personal  opinions from a few sales people who wants cheaper prices because that makes their life easier;  personal  opinions from the finance dept who wants higher price and higher profit margins;  personal  opinions from a few marketing people with a “gut feel” (also called wild guess) for what the market will bear;  personal  opinions from a few executives with “industry experience”  (also called educated guess).  All in all, not a very  scientific  way to price, and no wonder that a using the right  process, and the right decision support for pricing,  yield substantial gains.
    Per Sjofors
    Founder, CEO  
    Atenga Inc