Can classic marketing theories enhance your modern B2B marketing?
B2B marketing has changed a lot over the last few decades, so are classic marketing theories still relevant?
Marketing as a concept has existed for about as long as the idea of buying and selling, even if it wasn’t necessarily recognized as such. Some of the earliest examples include Roman mosaics advertising amphoras of fish sauce in the ruins of Pompeii, and there are records of famous gladiators endorsing products. But the concept of developing theories around marketing is fairly recent, first emerging in the early 20th century.
Compared to many other things that also produce analysis and theories, like art, literature, and economics, this isn’t a very long time for theories to become outdated. Adam Smith’s Wealth of Nations is still considered to be essential reading for economists, despite being published in 1776. The theories that Plato and Aristotle were advocating around literature and art two thousand years ago are still considered valid criticism.
But when it comes to Marketing, it’s changed massively, and rapidly in a much shorter amount of time than Economics and the Arts. It can be tough to see how theories that were developed in a time when the main form of marketing was print and the majority of people didn’t even own a TV in quite different socio-economical circumstances, when you’re trying to think about things like social media targeted ads, content distribution channels, AI marketing applications, or VR experiences.
It can be especially tough to see the connection when you take into account that a large majority of mid-20th century marketing theories were focused on B2C, rather than B2B.
But then Plato and Aristotle didn’t know anything about the millennia of art and literature that would come after their deaths. Adam Smith’s theories pre-dated the Industrial Revolution, let alone the Information Age which changed economics completely. And yet they’re still considered relevant today.
The reason for this is applicability, the ability to look at the broad themes of old theories and see how they apply to modern situations. In this article we’re going to do just that: look at two of the absolute classics of marketing theory and see how they hold up in the modern world of B2B marketing.
The ‘Ps’ of marketing
In his 1960 book, Basic Marketing: A Managerial Approach, Professor E. Jerome McCarthy laid out four factors that can influence how you market something, which he quite cleverly made alliterate by calling them the ‘the four Ps of marketing’.
Basically, what are you trying to market to your audience, and how does it satisfy their wants and needs? This doesn’t just refer to physical items, it applies to intangible stuff like services, events, or experiences.
This might seem fairly obvious, but how much is it going to cost people to access your product? To make things more complex, this doesn’t just refer to the monetary cost of your product, it can also refer to any other sacrifices your audience might have to make to access your products, such as time and effort.
Where exactly is the product distributed?
What communications are you using to make people aware of your product? What are you saying, and where are you saying it to reach your audience?
So when McCarthy was developing these four Ps, he was mainly thinking about B2C marketing, with traditional marketing channels (print, billboards, radio, television, all the classics) and products requiring physical access and distribution.
How does it measure up to the modern-day, particularly when we look at it through a B2B lens?
All in all, pretty well! Let’s break them down
Building your marketing around the products/services you provide is pretty obvious, but the main thing to focus on here is the “how does it satisfy their wants and needs?” part. The technical term for this is your value proposition, which is basically where you demonstrate your value to the businesses you’re marketing towards.
It can be a bit more complicated when it comes to B2B than B2C. With B2C, you’re generally thinking about the wants and needs of one person or a small group of people. In B2B, you have to think about the overall business goals of the companies you’re aiming at, the requirements of the departments that your product will affect, and potentially even the individual workers who will utilize it.
In particularly saturated markets, the value you provide customers beyond just your core products and services could be the only thing that sets you apart from your competitors, and allow you to satisfy their wants and needs even further. This can include the quality of your customer service, your logistical capabilities, communities with other customers, and more.
So, potentially there’s a bit more legwork and thinking involved, but it still applies!
Price can be a bit more complex in B2B, as there can be a lot of variety in terms of things like the scale of orders, contract negotiations, different packages, etc.
If anything, the ‘price’ in terms of money when it comes to modern B2B marketing is more about who you are going to target with your marketing. You want to be targeting potential leads that can result in a high lifetime value (LTV). Depending on your product, you want customers who are either going to spend a lot on a large single order or will have a lengthy business relationship with you and pay you regularly throughout that relationship.
In terms of the more intangible prices like time and effort, it can vary a lot when it comes to B2B businesses. We’re not going to go into all the varieties of B2B businesses and the time/effort impact, but we’ll give examples to give you a general idea.
If you’re selling a digital product, like SaaS, there’s not much to worry about there in terms of getting hold of the product, as it’s usually just a download. But you need to take into account the setup/integration time when it comes to your marketing, and probably provide plenty of how-to content that will make this process go much easier.
For time and effort when it comes to physical products, B2B buyers rarely go to an actual location to get the products themselves, rather they’ll expect things delivered to the right place, at the right time to suit their schedule, so your marketing will likely emphasize your operational efficiency and ability to stick to delivery schedules.
There are plenty of other ways to think about the non-monetary costs for different types of B2B businesses, but hopefully, you get the idea!
This is where things have changed the most rapidly. The rise of digital marketing and digital products/services means that your audience is potentially everyone in the entire world (even with physical products). Your marketing will need to reflect this, and how you do this will likely depend on the resources available to you.
If you’re resource-poor, you’ll probably need to focus on a specific region (likely the one your marketing team is most familiar with) or go for a more general “globalized” tone that works across multiple countries and regions. If you have the resources, the ideal thing would be to produce tailored and targeted campaigns directed at specific regions, often with teams dedicated to those places.
As discussed earlier, McCarthy developed the 4 Ps when there were only traditional marketing channels available. However, the principle remains the same: identify the places (whether digital, like social media channels, or physical, like events) your target audience spends a lot of time and present messaging that appeals to them! The biggest change with the rise of digital marketing is that you can be much more targeted with your ad placements and content distribution.
For more on the 4 ‘Ps’ and how it fits into the marketing mix, head to our guide.
Porter’s 5 forces
In 1979, Michael E. Porter published a framework in the Harvard Business Review that outlines the external forces that can affect a company’s marketing, branding, positioning, and potential profitability within certain industries.
Porter’s 5 forces are:
If you’re an established business, you need to be aware of the threat of new entrants into your industry. New entrants can disrupt the established market share in ways that can have a major impact on a brand.
If you’re entering into a new industry, whether as an existing company that’s diversifying into a new market, or a brand new company, you need to be aware of certain barriers to entry, which can include government regulations, the scale of supply and demand, and the cost of equipment and physical locations connected to that industry.
In Porter’s original model, the biggest impact on an industry was usually existing companies diversifying into new markets. A large company could potentially leverage resources, expertise, and name recognition that smaller existing companies within the industry might lack.
The actions of your existing industry rivals can have a major factor in how you can position and market your brand. You’ll need to keep track of them, their product innovations, and marketing strategies, and find ways to position yourself as both different and better than your rivals. The difficulty of doing this depends on, well, how competitive the industry is. If there are lots of rivals within an industry, it can be hard to make yourself heard, but equally, if you’re up against just a few brands that control a large amount of market share, it might be difficult to compete with their resources and existing brand loyalty.
These differ slightly from competitors, in that they aren’t businesses that are producing the same products and services as you, but rather they are potential alternatives to what you and they are offering. Think of it this way, competitors are companies that produce the same type of products as you. Substitutes are an entire industry/product type that could replace yours.
For example, Budweiser’s direct competitors are other beer companies, but they also need to be aware of other types of alcoholic beverage brands, like spirits and wine. If there’s an increasing trend for cocktails among consumers, this would reduce the overall demand for beer, making the industry even more competitive.
You’ll need to consider the pros and cons of substitutes related to your product/service. Do they produce the same desired effect? How easy is it to acquire these alternatives in comparison to your product? Is the alternative better value for money than your product type?
Customer bargaining power
How much influence can your customers have in dictating the price of your products and services? The ratio of buyers to suppliers in an industry directly correlates with the amount of influence they can have.
Got a small number of buyers with a lot of competition? Then buyers can easily dictate the prices. Got a lot of buyers and you’re the only game in town? You get to control the pricing, to an extent. You’ll rarely be in a position to charge whatever you want, unless your product is essential with no alternatives.
Regardless, being aware of your potentials buyers’ power will help you get a handle on how you position your brand, and what to emphasize when it comes to your marketing, such as low pricing or how essential and unique your product is.
Supplier bargaining power
Even the most basic of physical products rely on components and raw materials. Your company’s relationship with these suppliers can have a big impact on the availability of your products, and the price. And any changes to that can have a major impact on the marketing of your products.
For example, if you’re promising low prices and immediate access to products and an issue with a supplier forces you to raise prices or disrupts your production, then you’ll need to rethink your marketing message.
If you’ve spent any time studying marketing or business in an academic capacity, chances are you’ll have come across Porter’s 5 forces. It’s one of the most popular frameworks taught in marketing and business academia.
But Porter developed his framework in a decidedly pre-digital, less globalized world, so once again, let’s take a look at how they apply in a modern B2B landscape.
Since Porter established his framework, the ability of new companies and startups to disrupt an industry has grown massively. The increased prominence of the VC-backed startup model and a more leveled playing field in the digital marketing scape means that new companies might have an easier time entering an industry and establishing themselves.
That’s not to say that large companies diversifying can’t lead to major disruption, just that smaller companies now have the ability to be as equally disruptive.
The global digital landscape also means that new entrants can come from pretty much anywhere, increasing the potential rate of new entries into industries.
This still holds up as is! You just need to aware that in a global digital marketing landscape, there could be a lot more competitors to keep track of.
Once again, this is still as relevant today as it was back in 1979. And again, the expanded marketplace for many industries brought on by globalization and digital means you’ve got to keep track of the influences of many more potential substitutes for your products/services.
Customer bargaining power
The increased options for B2B buyers in many industries have made the customer even more important in dictating pricing and marketing. To mitigate their power and keep prices competitive, many B2B companies have developed new systems to keep customers loyal and satisfied without quibbling too much over prices under the umbrellas of customer marketing and customer success.
Rewarding loyalty, emphasizing customer support, and building community spaces are all the types of marketing strategies that can help shift the bargaining balance in your favor.
Supplier bargaining power
If you’re in a strictly digital industry, like SaaS, you might think this is no longer a factor, since the only raw “materials” are code. But you have to think about where your solution is being hosted, like on the cloud or servers. Losing access to them can have a catastrophic impact on your brand and its marketing.
For physical products and materials, increased globalization means you might think the power of suppliers has diminished since you potentially have more options for the supply of raw materials. But the global pandemic, as well as the infamous incident with the Ever Given ship in the Suez Canal, shows the fragility of the global supply network, and the repercussions disrupting it can have on businesses and your marketing.
Marketing has changed massively and will continue to evolve at a rapid pace as new technologies, channels, and products come to market. But the principles you might have learned in college can still be relevant, so long as you think about them in broad, applicable terms.
Let’s go back to the mosaics advertising fish sauce we talked about in the intro. One of the mosaics bears the inscription (translated from Latin):
“The flower of garum [a Roman term for fishsauce],
made of the mackerel,
a product of Scaurus [well known for the quality of his fish sauce throughout the Roman world],
from the shop of Scaurus”
The mosaic emphasizes the quality of the product (“the flower of garum”), is clear about its components (“made of the mackerel”), leverages a well-known brand name (“a product of Scaurus”), and it’s clear about where you need to go to purchase it (“from the shop of Scaurus”).
Those are good foundations for advertising in the modern-day. If we can draw valuable marketing lessons from something that’s roughly 2050 years old, why not marketing theories that are just a few decades old?