The Genius of Steve Jobs: Understanding Marketing's 4 P's
Although business textbooks still talk about the four P's of marketing (product, price, place and promotion), the name of the discipline has become mostly synonymous with the "P" for promotion. I bring this up because I believe it is relevant to understanding the real impact Steve Jobs had on the business world.
Most of the journalistic eulogies for Steve Jobs over the last week have referenced him as one of the greatest, if not the greatest, CEO in contemporary history. One would be hard pressed to debate that. But in my view, the attribute that truly set Jobs apart was his innate sense of all facets of effective marketing – each of the four P's.
Like any effective company, it began with the product. In the mid-90s, Apple computers were viewed as an over-priced niche product. Market share was consistently languishing at about three percent. The only segment of the business community that took the product seriously were those of us on the communications side seeing it as a great tool for design and AV applications. In the consumer market, there was a handful of zealots who loved the product, but most of the world remained loyal to their traditional PCs. In his view of the computer world, however, Jobs had a unique blend of near- and far-sightedness. He believed that he could build on his base of brand advocates through design combining unprecedented features and innovative styling.
In the classic four P's, the one "P" that has always been a bit forced is "place." More correctly, it refers to distribution. Early on, Apple recognized that by getting its products in the hands of students, it could influence brand preferences early in the development years of a new generation of computer users. The most dramatic Jobs-led initiative involving "place" was the opening of its now iconic Apple retail stores. To be sure, this concept could never have been effective had Apple products been limited to just its computers, but in conjunction with the incredible popularity of the iPod, iPhone and iPad, Apple stores are now the coolest "go-to" retail outlets the world has probably ever known.
This brings me to the Price "P". Even as Apple has expanded its distribution through other major retailers like Best Buy and Target, it has been dogmatic in price control. Jobs and his team knew that premium products allow for premium pricing and any kind of discounting inherently devalues the brand. Apple charges more for its products than those of its competitors simply because it can. So even though Apple computers still only account for about 10 percent of the market, its share of industry profits is substantially larger – making it one of the most valuable brands in the world.
Ironically, a case could be made that the promotional "P" is Apple's weakest – at least if measured in traditional advertising. While Apple spends about a half billion dollars annually on paid media, it is actually less than either Microsoft or Dell. However, given the memorability of much of Apple's advertising, it seems more pervasive than it actually is. In addition, if there were ever a poster child for the powers of word-of-mouth marketing and brand loyalty, it would be Apple.
I often grow weary of the way our society obsesses at the death of a celebrity and deifies the individual beyond merit or comprehension. I could not begin to speak of Steve Jobs, the man. However, I do believe his legacy as a marketer is not only much deserved, it will live on in business textbooks and corporate history for decades to come. In Jobs' case, maybe there should be a fifth "P" – for Posterity.
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