The 4Ps of Marketing, Loyalty Marketing and other bullshit.

Decades ago, Kotler stood above us all neophyte entrants into marketing. "Read his book" we were told. (Or "study it", if you were an MBA student.)

So we labored through the turgid prose to discover the few things he talked about, endlessly. The famous 4Ps of Marketing: Product, Pricing, Placement and Promotion. STP - Segmentation, Targeting and Positioning. And of course, his diktats on loyalty. His line "It costs 5 times more to acquire a customer than to retain one" was drilled into our heads and the opening slides of so many loyalty marketing firms that have since fallen into disrepair.

You took Kotler for granted till you started looking at the results of the actual work you did, and found most of the theory was utter bunkum. Then you started with looking closer at the gent's background: Kotler didn't even come up with the 4Ps himself but borrowed it from Jerome McCarthy, and he wasn't a Professor of Marketing. He taught Operations Research. Plus he had zero experience as a marketer. Of course, a few books later, he was Marketing Advisor to IBM, GE, Ford, Motorola, AT&T and other giants who, well, let's just say those firms that didn't do very well since.

Basically, the 4Ps are a product maker's way of looking at things. "What do I make and how do I sell it."

Two problems with this. One, that it applies to physical products more than services. You can't make it work on Netflix or a fintech app without twisting Kotler's words to say what he clearly did not mean. In fact, to make some kind of framework apply on services, others have needed to add even more P's like People, Processes and Physical Evidence.

Today, the 4Ps perhaps have more of a historical curiosity value as one of those thought processes we all have evolved past, like the Sun-goes-around-the-Earth theory and Flat Earther beliefs. The second and bigger issue with the 4Ps is that marketing isn't about those who produce - as the name indicates, it's more about those who consume.

And nothing in the 4Ps puts the focus where it needs to be - on those who buy, and on those who influence the buying. In fact, Bob Lauterborn came back with a more sensible response to the 4Ps with the 4Cs: Consumer, Cost, Convenience and Communication. It is a slightly more useful framework, if you're looking for one.

But the 4Ps weren't the only misguidance we got from Kotler. We were then loaded with STP: Segmenting, Targeting and Positioning. Military terminology that many American academics seem to like. But war is nothing like marketing.

Yours truly handled the brand messaging for Pepsi across Asia in an earlier role, where he was told of the theory that the Coke drinker was a very different person from the Pepsi drinker - only to discover in reality and in every bit of research and consumer behaviour that it was the very same person.

Today the numbers are clear. Coke may have a 50% market share and Pepsi may have 25%. But it doesn't mean that half the world drinks Coke and a quarter drinks Pepsi, as Kotler's STP theory would predict.

It instead means that the entire world drinks Coke about half the time and the entire world drinks Pepsi about a quarter of the time. This brand-polygamous and disloyal behaviour is true in most sectors around the world and in all geographies. And it lays bare the uselessness of the STP theory for marketers.

So you don't segment and target. You simply try to be more mentally and physically available to all of your audience all of the time - and we will cover both of these in greater depth at a future date.

But, going beyond segmenting and targeting, it turns out there's very little value in positioning either. Pepsi has been relentlessly positioned as 'the choice of the young-thinking' for decades, to apparently contrast from fuddy-duddy Coke. Yet research shows that even today, Pepsi is mostly drunk by Coke drinkers, only not that often. We'll delve into this and other bullshit from Ries and Trout in a future piece.

Which brings us to Kotler's Loyalty Thesis. "Keeping a customer costs a fraction of what getting a new one costs", and other fallacies.

As marketers and consumers ourselves, we all figured that when brands offered frequent flyer or membership cards, all of us signed up for all of these, from all competing brands. Making the benefits of loyalty marketing quite irrelevant. If you're loyal to every brand in a sector, then you're not really loyal to anyone.

Also, as marketing professionals, in our past lives, we've directed millions of dollars worth of loyalty marketing or CRM freebies to loyal customers. Only to find from subsequent calculations that whatever they bought after receiving our goodies, they would have bought anyway, at the full price. So we've actually lost revenues in the exercise.

In fact research shows that only a tiny fraction - less than 10% - of loyalty campaigns around the world actually earn more than they cost after you factor in purchases from those bought who were not going to buy otherwise, and after factoring in the costs of discounts and of running the campaign itself. A sobering thought.

To add insult to injury, research also points out that retailers today without loyalty programs grow twice as much as those with loyalty programs.

So loyalty marketing doesn't really help and it's not even a benign thing. It actually hurts your cash flow - money that you could put to better use elsewhere.

At Pinstorm we're fans of evidence-based marketing. We put our money where our experiences and our evidences lie. Not in obsolete textbooks. No shit, Sherlock, as one might say.