The fundamental marketing mantra, "The right product, at the right time, in the right place, at the right price," needs re-evaluation as marketplace realities run ahead of their theoretical underpinnings.
The three utilities, product, time and place, have lost critical importance for consumers over the years. Price nowadays occupies the top rung of purchasing determinants.
In fact, there is growing willingness on the part of consumers to compromise on product, time and place as long as the price is right.
Shoppers no longer "walk a mile" to purchase an item for which they will accept no substitute. They will however travel reasonable distances to secure a bargain.
They stock up at club stores because they perceive prices to be better than in other stores. And they buy more better-priced store brands, particularly in categories that shortsighted manufacturers have allowed to be commoditized.
No wonder cost cutting has become obsessive for all players in the marketing channels! Pricing -- as an extension of cost -- has become the dominant factor in consumer buying decisions.
To be successful, marketing people must test the compromise limits targeted groups of consumers will be willing to live with, then deliver an optimum mix at the lowest price possible.
Trade-off analysis, a tool market researchers used widely at one time to evaluate new products, should find broader application in providing useful mix guidelines.
Competing on price considerations alone will spell trouble for any manufacturer, particularly if such a strategy is seen as a way to stave off private-label competition.
Manufacturers must still address the use satisfaction levels expected by consumers. They can use their powerful market research, R&D and distribution resources to create unique combinations that can hold leadership -- even in crowded categories.
Price dominated competition is not for the fainthearted. As marketers start their planning earlier and earlier -- as much as six to nine months ahead -- they also must keep ready to react quickly to price competition.
Most consumers switch rather easily and often between brands and between points of purchase. Their responses to price fluctuations are often immediate. This is why price promotions, whether executed by trade or direct to consumers, are gaining momentum. These are garnering the lion's share of promotional expenditures at the expense of advertising, which in itself is increasingly used to communicate competitive price benefits.
Finally, pricing concerns have motivated retailers and manufacturers to work together toward a smoother, more efficient and less costly flow of goods from producers to consumers.
It is price that drives the restructuring of the marketing process we observe today. Price will continue to hold primary sway over marketing thinking as we enter the 21st century.