Four Cs model -Consumer, Cost, Convenience, Communication

 

 Four Cs model -Consumer,  Cost, Convenience,

 Communication

Introduction

The Four Cs model of good business communications provides a framework for businesses that want to increase their customer base and attract repeat customers.

The Four Cs model is a reiteration of the Four Ps model, refined to be more customer-centric.

The Four Ps include product, price, place and promotion, while the modern version of the Four Cs includes consumer, cost, convenience and communication.

The 4P’s and 4C’s can be taken as two sides of the same coin, with one being a buyer’s perspective and the other, a seller’s. But considering the marketing mix from a 4C perspective is not just an exercise in semantics. Instead, it reflects a change in mindset to encourage marketers and executives to view their entire process and value chain from the customer’s point of view.

History

 In 1964, Neil H. Borden coined the term "marketing mix," which describes a number of different ingredients that business owners should focus on to improve their business. E. Jerome McCarthy refined these ideas into the Four Ps.

Koichi Shimizu originally created the Four Cs in 1973, which include commodity, cost, channel and communication.

With the publication of the book "Integrated Marketing Communications" in 1993, Robert F. Lauterborn created a second Four Cs model, which includes consumer, cost, convenience and communication.

 The traditional Marketing mix is a 4 P’s model and is business oriented.

The 4 C’s model of marketing on the other hand is more consumer oriented.

 Because of its focus on consumers, the 4 C’s model is mainly used for Niche Marketing.

 However, just like the traditional marketing mix, it can also be used for mass markets.

 The four variables in the 4 C’s model are

Consumer

Cost

Convenience

Communication

 Components of this marketing model:

 Communication –

 According to Lauterborn, “promotion” is manipulative while communication is “cooperative”. Marketers should aim to create an open dialogue with potential clients based on their needs and wants.

Consumer Wants and Needs –

 A company should only sell a product that addresses consumer demand. So, marketers and business researchers should carefully study the consumer wants and needs.

Convenience – 

The product should be readily available to the consumers. Marketers should strategically place the products in several visible distribution points.

Cost –

 According to Lauterborn, price is not the only cost incurred when purchasing a product. Cost of conscience or opportunity cost is also part of the cost of product ownership.

Unlike the traditional marketing mix where the primary focus is on Products, in the 4 C’s model, the primary focus is on the customer.

 

Consumer

Thus the companies which follow this model believe in making products which satisfy their customers.

They are generally ready to offer customizable products and because they have a general set of target customers, this principle is only applicable for smaller market segments and not for mass markets.

Here, instead of beginning the story with a product itself, the focus is on selling only what the customer specifically wants to buy. This means that it becomes an absolutely vital activity for the marketer to spend time studying these consumer wants and needs in-depth. Only this detailed understanding will allow a company to sell with accuracy what the customer will buy.

At the core of any marketing effort is the product itself. This however, is just one piece of the puzzle. The product must be something that the customer finds desirable and there must be something unique about it that sets it apart from all the rest of the competition. The most effective way to achieve this is to first find the right untapped market, and then develop the product instead of trying to fit a ready-made product into a market. Product testing, therefore, becomes a key element of both the product variable and the customer variable. The understanding should be of what the product can give the customer both in the eyes of the manufacturer and in the eyes of the consumer.

Cost

For mass markets, the traditional marketing mix can be used.

Cost is equivalent to Pricing in Cost the traditional marketing mix. Cost is a very important consideration during consumer decision making and hence in the 4 C’s principle, the cost variable is given special attention. The 4 C’s model generally plans on the basis of Customers and not products.

Communication The fourth P is promotion, which was replaced by communication.

Promoting a product via traditional media channels is still a pathway to business success, but communicating with customers to discover how to improve service is essential.

Businesses make sure to learn from their customers, an experience that provides an increased opportunity for branding and repeat business.

When understood correctly, the cost variable gives more detailed information about the customer than the price variable does.

A good way to understand the difference in price and cost is given here. Price is the amount of money that a consumer will be willing to pay to acquire a good or service.

On the other hand, cost is the amount that goes into the production of a good or service.

This is the sum of the value of all inputs to production such as land, labor, capital and enterprise.

Within the total cost to satisfy a customer need, price becomes one of the many factors.

Other factors may include the cost of time to acquire the product, the cost of conscience when it comes to consuming the product, the total cost of ownership, the cost to change to a new product and the cost of not selecting an alternative.

There is a common misconception among marketing professionals that the main motivation for a product purchase is the price.

Though price based positioning may provide some initial success, in the long term, this turns out to be a less successful move.

If the product is given a price that undercuts cost to gain the market, then the company will be at a disadvantage.

If the product is priced at a premium without understanding its value to a customer, it will never be purchased.

Instead, a focus on cost to satisfaction will mean that there is more important information being taken into account than just the purchase price.

A focus on this C will help find ways to actually increase the price of the item while decreasing the cost to satisfaction through measures that have a minimal influence on the company’s bottom line.

 

Convenience-

‘Place’ referred to the location of Convenience where something would be sold,

Convenience for the customer’ refers to how easy it is to find information and purchase.

With e-commerce available, catalog sales, delivery services, some businesses (like amazon.com) barely need a store or ‘place’ at all.

Therefore, convenience becomes the distribution channel.

The proliferation of online marketplaces, credit cards, catalogues and cell phones has made the provision of products to the customer a whole new ball game.

A customer is not bound to actually go to a physical location to meet a need and there is an endless variety of places online to do so.

This means that a marketer needs to be aware of how a particular customer group likes to make their purchases in order to make it convenient for them to buy.

While place from the 4P model took into account the traditional value chain involved in getting a product into a customer’s hand, the convenience variable considers much more.

All in all, the traditional marketing mix Conclusion model helps a company define its strategy more efficiently.

However, the 4 C’s model, although not much different, really helps if you are a customer oriented firm.

 

Communication

Lauterborn considers promotion to be a manipulative factor driven only by the seller. Instead, he viewed communication as a more cooperative activity and driven more by the consumer of a product.

A traditional marketing mix uses promotion as a tool to put information about the product in front of the customer. Promotion and its methods continue to evolve with new avenues and means to reach the consumer. Though these methods of promotion remain effective, a niche marketing focus needs a bit more.

Communication will work toward creating a meaningful relationship with the customer with a focus on what they need and what their lifestyle is. The focus is wider and more inclusive of the different forms communication can take. There is more of a give and take between buyer and seller. Looking at advertising as this form of communication can help a marketer understand their market better and increase sales and customer loyalty.

 Some questions to ask regarding each of the 4C’s include:

 

Customer

What is the competitive advantage?

Who is/are the most appropriate target customer(s)?

What are their needs and wants?

What is the product or service worth to the consumer?

Is the customer driving all decision making?

 

 Cost

What is the price you mean to charge the customer?

Has there been adequate research to determine this amount?

Is this figure reasonable and affordable?

Is the figure profitable for the company?

What is the total cost that a customer will incur when acquiring the product?

What considerations apart from price will encourage a customer to buy?

Is the value of the product to the customer enough to support all the costs?

 

 Communication

Is there a communication plan in place to ensure meaningful customer dialogue?

Is the link between this communication and resulting customer confidence and sales understood?

Does the communication answer questions the customer may have such as, ‘What’s in it for me?’

Is there a social media strategy planned to both promote a product and gather customer insights?

Is there a plan to adapt communications to each of the target markets?

 

 Convenience

What are potential barriers a customer may face in locating and purchasing a service?

How do you plan to remove these barriers?

Do you have an informative and easy-to-navigate website in place?

Is the website optimized for mobile use?

If you sell online, are the purchase, payment and fulfillment processes secure and intuitive?

Is your product available to buy through multiple channels?

Is there adequate customer support in place?

began with ‘consumer wants and needs’ as the key focus for product-led companies who tend to make products that the customer does not want. His second variable was the ‘cost to satisfy’ based on the irrelevance of price among many other factors. The third factor is the ‘convenience to buy’, an interesting concept in today’s world of 24/7 availability. The last variable was ‘communication’, with a proposal that instead of a more manipulative promotion, communication should be a two-way dialogue between the customer and the company.

For niche marketing, it is necessary to access detailed market research to identify those markets which are not rife with competition but may prove to be lucrative. Once this kind of market is identified and understood, the 4C’s can be brought into effect.