4P marketing, Kotler

To 4P or not to 4P

To 4P or not to 4P that is the question.


The term the 4P’s of marketing (and marketing mix) was originally proposed by E. Jerome McCarthy in 1960 and popularised by Philip Kotler in 1967 in his seminal book Marketing Management. In it they propose that a complete marketing mix consists of 4 P’s; Product, Price, Promotion and Place (channel).

Given that Kotler is considered such a seer it is understandable why banks have restructured their organisations and adopted this approach to marketing since the 70’s.

This methodology leads to a straightforward product push marketing process of: produce the Product > decide on the Price > determine your target market > create the promotional campaign > and deploy through the chosen channels. This process is in place in the vast majority of Banks today, over 45 years after it was set out.

Given that it is a tried and tested approach, why is it that the results from such a methodology are only 1%-3% sales? Well I think there are two main problems.

The first is Timing. The means used to determine a target market are typically statistical analysis tools, such as SAS, which will tell you something like 87.2% of the target group will buy a new car in the next three years. It can be amazingly accurate and at the same time absolutely useless. I need to know who wants to buy a car today!

The second problem is that the 4P approach was set up to help product companies, and I don’t believe that Banks are product companies. They are Service companies (albeit who happen to have a few products).

Each product that a bank sells will be used many times by their customers. For example the sale of a credit card can result in usage 100, 200, or even more times a year. Each of these is the customer making use of the service provided by the credit card. That’s hundreds of opportunities for service based on a single sale.

Those banks who who have implemented it have found that both of these issues are addressed by Event Driven Marketing; telling me who to contact Today and providing perfect opportunities for customer service. It isn’t a coincidence that banks that deploy an EDM approach have average sales of 12%-54% and customer satisfaction indices around 10%-15% more than their competitors.

Here are a few questions for you;




Ok, the final bit of info for you comes from internal research done by ING on why customers leave a bank.

  • Find more value in other competitor 9%
  • Dissatisfied customer because the service given is bad 82%
  • Other (move away, death, etc.) 9%


Hmmm that’s 9% for a different product compared to 82% for poor service.

In summary, I believe that for Banking, Kotler is Krap, and that the more that a bank focusses their marketing on trying to sell products the more it is missing the point and handing a big opportunity to their competitors. They need to change their marketing strategy away from a 4P product approach toward one that is more in line with marketing for a Service company.

Such as what I hear you say. More of that in part 2 of this blog (Sense and Sensibility) next week.

(with excuses to Shakespeare),

To 4P or not to 4P,

Whether ’tis nobler in the mind to provide the sales pitch and forgo customer service

Or to take arms against a sea of product push campaigns and by opting out, end them.

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