Marketing models that have stood the test of time

What do you think is the best, i.e. most useful marketing model?

You may have noticed we’re fans of using practical models as tools to support marketing strategy development? We believe a clear, simple model gives us a framework to assess how we’re doing things now compared to our competitors and plan growth strategies for the future. They’re also great for communicating the purpose and reason behind a strategy your pursuing.

I think most would agree that models are useful “Mind Tools” to structure thinking and communicate a strategy, but there’s a problem – too many models and some are academic rather than of practical application in the “real world”. So many marketing models have been developed over the years, that it can be overwhelming to know what to use and when… I was talking to Annmarie Hanlon about the power and challenge of using planning models and we decided it would be good to collaborate to create a free guide where we picked and explained the most useful, practical models for students and professionals alike to share.

In the free guide we have selected what we see as the classic models that have stood the test of time and we think are still relevant in today’s era of omnichannel marketing. But which are the most useful – do take our poll to share which you think are of the most practical use and are valuable in understanding opportunities to grow a business.

Please select which you find most useful of the 15 models covered in our guide – you can select more than one or suggest others.

We would also like to hear what you think about the relevance of these model in 2011. Have they had their day, do you find them useful, do you have better alternatives? Please tell us what you think in the comments below.

Since I’m a digital marketer, I have my own views on the relevance of these, indeed in my books I have often included them. In fact thinking of it, most are included in my Digital Marketing: Strategy, Implementation and Practice book.

So before I wrote the guide I thought it would be nice to share the relevant ones here for anyone passing this way who isn’t familiar with them. A hopefully more coherent explanation is available in the free guide!

So this is what I think about their value to today’s marketer…

1. 7 Ps of The marketing mix

Product, Price, Place, Promotion, People, Process and Physical evidence – these elements of the marketing mix form the core tactical components of a marketing plan.

I think it’s right this is at the start of the list since it’s still widely used and I think is a simple way to think through how a company markets its products. A good model to explain marketing strategy to someone who isn’t a marketer. But it suffers from a push mentality completely out-of-keeping with modern digital marketing approaches of listening to and engaging customers in participation through social median marketing.

2. USP

Unique Selling Proposition is the concept that brands should make it clear to potential buyers why they are different and better than the competition.

This is a simple concept and an essential message to communicate online since the core brand message often isn’t clear. Here are some examples of websites that communicate their online value proposition well. It’s not really a model, so although it was included in the CIM centenary vote it’s not included in our guide. 

3. Boston Consulting Group Matrix

This well known essential MBA model categorises products in a portfolio as Stars, Cash Cows, Dogs and Question Marks, by looking at market growth and market share.

I find this isn’t so applicable in the online marketing world for small and medium businesses – it’s more of a Big Business corporate strategy model.

4. Brand positioning map

This model allows marketers to visualise a brand’s relative position in the market place by plotting consumer perceptions of the brand and competitor brands against the attributes that drive purchase.

This is a great concept for understanding how customers see a brand. We’ve included an example in the guide. I can’t recall many descriptions of this being applied online. I have seen it used as part of user-testing though in comparing different websites?

The creation of an engaging online brand is so important to success in digital marketing, it’s a pity there aren’t more effective branding models.

5. Customer Lifetime Value models

Customer Lifetime Value is the concept used to assess what a customer is worth, based on the present value of future revenue attributed to a customer’s relationship with a product.

A different class of models to others, this is more of calculation model – covered in Chapter 6 of my Internet Marketing Book. CLV is mainly important online for transactional sites and certainly investment decisions like allowable cost per acquisition (CPA) must be taken with future customer purchases and attrition rates considered.

6. Growth strategy matrix

Ansoff’s matrix identifies alternative growth strategies by looking at present and potential products in current and future markets. The four growth strategies are market penetration, market development, product development and diversification.

Ansoff’s model dates back to the 1960s, but I still cover it in the books to show how companies should “think out of the box” with their digital strategies by considering new opportunities for market and product development rather than simply market penetration which misses the opportunities of digital marketing for me.

7. Loyalty ladder

This model shows the steps a person takes before becoming loyal to a brand as they move through the stages of prospect, customer, client, supporter and advocate.

Loyalty models are useful as a way of thinking through the opportunities to generate lifetime value.

8. PESTLE

As an extension of the traditional PEST model, this analysis framework is used to assess the impact of macro-environmental factors on a product or brand – political, economical, social, technological, legal and economic.

PESTLE/PEST/DEEPLIST make me groan – to me they’re a text book approach which is far removed from improving results. I find students tend to review these in-depth at the expense of creating innovative strategies. The results of the poll seem to suggest others agree.

9. Porter’s Five Forces

The five forces are Rivalry, Supplier power, Threat of substitutes, Buyer power and Barriers to entry and are used to analyse the industry context in which the organisation operates.

Yes this one features in my books and I reference a classic 2001 paper by Porter on applying the Five Forces to the Internet. But, I personally think it has limited practical value – yes we know customers have more bargaining power online. So what?! I also think it under-represents the power of intermediaries like comparison sites and publishers in the online world.

10. Product Life Cycle

This model plots the natural path of a product as it moves through the stages of Introduction, Growth, Maturity, Saturation and Decline.

11. Segmentation, Targeting and Positioning

This three stage process involves analysing which distinct customer groups exist and which segment the product best suits before implementing the communications strategy tailored for the chosen target group.

As a model which is focused on delivering relevant products, services and communications to the customer and so generating value for an organisation, this is essential for every marketer to understand and apply in practice.

12. PR Smith’s SOSTAC® model

This acronym stands for Situation, Objectives, Strategy, Tactics, Actions, Control and is a framework used when creating marketing plans.

I’m a big fan of using PR Smith’s SOSTAC® model as a way of planning and implementing strategies. It features in all my books and I know Paul Smith, who created it well – he’s my co-author on Emarketing Excellence.

Reference

PR Smith (2011) The SOSTAC ®  Guide – to writing the perfect plan  by PR Smith (2011),  published by www.prsmith.org and available at Amazon.

Finally, I wanted to thank the Chartered Institute of Marketing who prompted the idea for this post in 2011 when they were celebrating their centenary and they ran voting around different models.  It also prompted the idea for a free guide to help explain the value of models for planning.

  • http://www.hgacreative.com P

    This is pure ‘marketing enlightenment’. Thanks for sharing it Dave.

    Prashant

  • http://www.infojuice.co.uk Mark McGee

    SOSTAC is the core model I use for my overall strategic planning, although most of the others crop up as and when they are needed.

    Good list and useful to have these in one place, thanks!

  • Sergey Avdyushenko

    thanks

    I like SOSTAC

  • http://www.prstrategic.blogspot.com Peter Rees

    These are all good!

    I’m not sure that one can vote on which one is best though! They are all useful in different ways and do different things.

    A nixce list nonetheless.

    Thank you DC!

  • http://www.prstrategic.blogspot.com Peter Rees

    These are all good!

    I’m not sure that one can vote on which one is best though! They are all useful in different ways and do different things.

    A nice list nonetheless.

    Thank you DC!

    • http://www.smartinsights.com/about-dave-chaffey/ Dave Chaffey

      Thanks Peter, Prashant, Mark, Sergey!

      Yes voting for one of the core marketing models is a little unrealistic since they should be part of every (digital) marketers toolbox, still it’s interesting to see which one comes out top and I thought it was great the way they were collected together by the CIM.

      I didn’t ask what’s missing: SWOT is the obvious one!

      Dave

  • Robin

    Found this very interesting, for teaching further education students the 7 Ps and the Seg, Tar, & Pos models are good.

    Thanks

    Robin

  • http://www.megger.com Nick Hilditch

    All great stuff, Dave.

    The one I would pick out as different is LTV. I learnt this model from the IDM digital diploma, but although I now know it has been used i direct marketing for decades, it wasn’t around when I did my MBA, not is it a concept that is understood by many business professionals. Sadly, financiers and sales people generally seem to believe in the fallacious and infamous marketing maxim coined by John Wanamaker: ‘Half the money I spend on advertising is wasted; the trouble is I don’t know which half.’ Because of that, and a general ignorance of how LTV works, companies unfortunately continue to waste their marketing budgets.

  • http://www.tknlgy.eu Kieran Hanrahan

    Interesting results…

    Perhaps what it points to is that the participants / audience are attuned to working in the area, so they are familiar and concerned with the models / processes that work for them and that deliver results.

    Some of the options like BCG and Porter are pure (and very old!) business strategy tools and overarch marketing, being focused primarily on industry / situational analysis.

    Great piece and very informative…

    • http://www.smartinsights.com/about-dave-chaffey/ Dave Chaffey

      Yes, I think the most popular make perfect sense – they are the one’s that are most applicable to most people across a range of companies. BCG and Porters are higher-level tools and probably most appropriate in larger organisations.

  • Mai Tran

    I’m using your book as textbook for E-com course :) it’s interesting to find you here online :D Thank you for a great book.

    • http://www.smartinsights.com/ Dave Chaffey

      And thanks you for saying thanks Mai – glad it’s helpful. New editions are only every 2 years, so good to keep it fresh online.

  • Eric

    what of the time service model and brand switching model… elaborate them for me please:

  • guest

    There is no option to print this article as a doc instead of printing the whole web page?

    • http://www.smartinsights.com/ Dave Chaffey

      Hi Annette,

      That’s right, but we do have a style sheet so that if you print it doesn’t print the whole page – just the content in the main panel, so hopefully that works for you?
      Dave

  • http://www.facebook.com/vandana.sonwaney Vandana Sonwaney

    Hi, I would like to connect with faculty from India who teaches this course

  • Alison Brolls

    The 10C’s model by Richard Gay is one which seems to be pushed a lot e.g. CIM senior examiners on Diploma in Digital Marketing, failure of students to use this digital marketing model versus old tried and tested models like PESTLE, Ansoff and even SOSTAC!!, but doesn’t get mentioned here, and seems to be a lack of scholarly articles on it?

  • customfitonline

    I wrote an article about the “the 4 C’s versus the 4 P’s of Marketing” that might be helpful for readers of this excellent “Marketing Model” post.

    The concept I write about is taken from Bob Lauterborn, professor of advertising at the University of North Carolina. Check it out at http://www.customfitonline.com/news/2012/10/19/4-cs-versus-the-4-ps-of-marketing/

    ^ Roy McClean

  • http://www.mediabistro.com/agencyspy/72andsunny-nabs-fiat-na-digital-aor-duties_b20064 Adam

    I have mostly use the SWOT method as it is relatively more widely-known. Also it is easy to identify the important points out. But I also think SWOT can only identify so much and we need other tools to expand the results.

    Adam – Impatto

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  • http://entreb.com/ Entreb

    I voted for the 7Ps because it works for me. But I still have to try and experiment on the other marketing strategies listed above. As we know, marketing is about experimentation. We can’t really say that one is effective unless we have tested and evaluated it.

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