Marketing mix strategy and the supply chain: the 7 P’s redefined
Written by Rachel Ann Kreis ·
Any professional with an educational background or work experience in marketing has heard of the 4P’s at least once. Product, placement, price and promotion—the four elements within a marketing mix strategy used to incite a certain response from a brand’s target market. As a result of the emergence of online channels and data collection, the traditional 4 P’s model has evolved into the 7 P’s approach. This new methodology includes three additional components—people, process and physical evidence—adapting the original framework to fit the demands of the technology era. But when it comes to trade marketing, this contemporary interpretation of the 7 P’s has yet to be adapted to fit within the supply chain marketing context. As trade marketing is often misunderstood by marketers and retail ecosystem members in general, supply chain marketing is oftentimes an afterthought. However, this common oversight does not diminish the importance of trade marketing for FMCG brands. In order for an FMCG product to be sold by a retailer, these professionals must first push their products down the supply chain successfully.
So, how can the 7 P’s marketing theory be applied to supply chain marketing and which technologies make it possible? We are going to dig deep into the remake of this marketing mix strategy, so trade marketers can benefit from digitalising supply chain marketing plans as well.
Digitalising the trade marketing mix strategy with big data
Technological solutions created especially for trade marketers have generally been far and between. Many software providers have failed to pinpoint the needs of these professionals by grouping them under the same umbrella as brand marketers. This is like comparing night and day when developing products for each type—and where Location Intelligence technology takes center stage. Location Intelligence is the process of deriving meaningful location-related insights from geolocated data about the behaviours of people in a particular area. This contextual information instantly becomes a competitive advantage when the trade marketer knows how to apply it to their marketing mix strategy. Let’s explore how Location Intelligence plugs into the 7 P’s of trade marketing, revolutionising push channel tactics with big data.
It is common knowledge that the product should always fit the expectations of consumers. But what about the expectations of consumers in a specific location? Location Intelligence can provide the trade marketer with this type of contextual information in regards to demand. Professionals who understand how the demand for certain products changes in particular areas can capitalise on this information when selling to distributors, wholesalers and retailers and get more value for their products or offer competitive deals to move their FMCG products down the supply chain.
Strategically placing FMCG products in the right retail locations will support the final purchase. Nevertheless, the trade marketer must know how to find those establishments. Geolocated data highlights important trends in the market and shows where different populations of people buy certain products. Most FMCG suppliers have a large product portfolio—and Location Intelligence can tell them which products to place where to boost sales. This will also greatly reduce overstocking issues and strengthen a trade marketer’s relationship with their supply chain counterparts.
Aligning the price with the perceived value of the product is another essential ingredient for a successful marketing mix strategy. This also means that the price must fit the unique market conditions of the area where the product is being sold. The same can be said when a trade marketer is developing a push tactic for an in-store promotion. If a particular customer from a well-off neighbourhood perusing items on the aisle of a supermarket sees a “two for the price of one” promotion, it could have the complete opposite effect the trade marketer intended. The customer may consider the product to be less valuable and not worth purchasing if the FMCG brand is selling it this way in a wealthier area. The market context around each retail location matters and Location Intelligence provides the circumstantial data necessary to help the trade marketer understand these small but significant nuances.
Promoting different products from a portfolio to distinct supply chain segments can be quite the complex task. Location Intelligence streamlines the process by providing the trade marketer with specific data that can be used as a powerful negotiation tool when promoting their products amongst supply chain members. Geolocated data that shows a certain product will sell in a particular area (whether it be for distributors, wholesalers or even directly to retailers) will make the sale even more appealing. And who knows, maybe the supply chain partners will be inclined to purchase greater quantities when promoted products are supported with big data insights.
Behind every great FMCG brand is a savvy trade marketer. Like a midfielder in football, the trade marketer is the key player who moves the product from the manufacturer until it goes home in a shopping bag with a customer. As mentioned before, few tools have been developed with trade marketers’ realities in mind. Supply chain management has always been a “behind the scenes” type of role which has obscured the trade marketer’s profession from a great part of the business world. This lack of visibility has made digital transformation more challenging for these supply chain professionals. Fortunately, this is no longer the case with Location Intelligence, allowing trade marketers to match the FMCG brand marketers’ digital adeptness with technology tailored to their needs.
The process of moving a product from the factory to the retail establishment is a delicate operation—especially due to the fact that no FMCG supply chain is the same. It is up to the trade marketer to define how to market their brand’s products to each one of their supply chain members. However, once the sale is made, the job does not end there. The trade marketer must oversee the entire process from beginning to end. Ensuring the quality of this service is crucial so that each interaction with the FMCG product—from distributor to consumer—is well-received. This is where geolocation data can be useful and provide the trade marketer with the acumen and foresight needed to adapt their marketing mix strategy and promote their products’ success.
7. Physical evidence
The physical evidence of a trade marketing mix strategy consists of all the marketing materials (such as flyers), packaging and the product itself. These are considered the physical touch points associated with selling an FMCG product. Trade marketers are responsible for these materials that leave a lasting impression on both supply chain members and final consumers. Internal sales data can be uploaded and studied through geospatial analysis using Location Intelligence technology. This means that trade marketers can visually pinpoint the areas where there are more sales and determine which ones are also repeat customers. The locations where there are more sales and repeat customers (for consumers and/or supply chain sales) suggests that there are some lucrative market conditions within the area that are worth looking into. Trade marketers can use this information to draw useful conclusions as to why a certain product performs better and generates more loyalty in a particular location and replicate this process for other points of sale.
The 7 trade marketing P’s and Location Intelligence
There is no denying that digital transformation has taken the entire marketing industry by storm. New channels and access to data have changed the way marketers implement and measure their strategies with optimisation at the core of every campaign. It was only a matter of time until this technological wave reached the trade marketer. This wave has come in the form of Location Intelligence, giving an FMCG product momentum as it’s pushed down the supply chain. The question is no longer “if” marketing across the supply chain can transition from traditional to digital. The only question left is “when” the trade marketer will take their supply chain marketing mix strategy to the next level. It will happen sooner or later—but those who act quickly will benefit first.
Are you interested in learning how to optimise your trade marketing mix strategy with Location Intelligence? Ask for a demo and one of our consultants will show you how.