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A New Marketing Model for the Digitally Evolving World: The Marketing Inverted Pyramid

In this article, we explore The Marketing Inverted Pyramid TM, a model that represents how marketing forms the foundation of business strategy.

Technological disruption has fundamentally changed industries and how businesses produce, distribute and operate. The digitally evolving world has also changed the way customers research and buy and in turn, changed the way entrepreneurs, business owners and marketers sell to their customers

TRADITIONAL MARKETING MODELS

The fundamental principles of marketing have not necessarily changed. Still, many modern marketers have pointed out that the “Marketing Mix”, coined by Neil Borden, in 1949 and the subsequent simplification of the model into the “4Ps of marketing”, developed by E. Jerome McCarthy in the 1960s, is outdated.

Contrarians have pointed out the 4Ps of marketing that highlight product, price, place and promotion does not adequately capture today’s market conditions and digital landscape.

“Product” emphasizes building a better mousetrap instead of focusing on solutions for customers. Value is a more important differentiator than “price”. “Place” is very much flipped on its head in the digital world. And, “promotion” as interruption marketing is obsolete in today’s social media world where customers have a voice.

Of course, one can argue that this is just semantics. But words do have meaning, and intent can be powerful.

I agree that McCarthy’s 4Ps of marketing that highlight product, price, place and promotion does not adequately capture today’s market conditions and digital landscape. But, it was never designed for today’s digitally evolving world. Nor, was it designed as a fundamental business strategy.

THE MARKETING INVERTED PYRAMID

I developed a model that concisely represents how marketing forms the foundation of business strategy.

While the individual concepts are by no means original to me, it is the particular way the framework is put together that is useful in understanding how different aspects of marketing drive a business’s strategy, and in turn tactics.

The Marketing Inverted Pyramid TM is represented by three sides of an upside-down pyramid. Each side represents one aspect of marketing, namely:

  • Value Creation
  • Communication
  • Brand Equity

Each aspect represents one stage of the marketing process that lays the foundation of the business.

The Marketing Inverted Pyramid | J C Sum

VALUE CREATION

All businesses start with value creation. Specifically, understanding the market needs and creating value in the form of a product or service that solves a problem or fulfils a need.

You can only create value for the market when you know what it needs.

A big part of value creation is innovation. Regardless of the period in history, innovation is needed to evolve and adapt to changing markets.

Fundamentally, innovation means introducing something new in your business. While innovation is mostly associated with upgrading existing products or developing new products, innovation can also create value by:

  • Leveraging on existing products by creating variations for different markets or media platforms.
  • Developing or modifying products to all for new revenue streams such as through a subscription-based model or automatic recurring billing.
  • Adopting a new pricing structure that will attract new customers such as with upfront pricing or bundle deals.
  • Adding value to existing products, services or markets to differentiate the business from its competitors and increase the perceived value to the customers and markets.
  • Improving business processes to increase productivity and efficiency.
  • Improving workflow or logistic processes to cut down production time.
  • Reducing fixed or variable costs through digital automation and replacing manual labour.
  • Enhancing customer experience to increase customer retention and advocacy.

COMMUNICATION

Communication refers to all forms of promotional and customer engagement activities to develop relationships with prospects and customers to market the value created.

Traditionally, marketing focused on promotional activities like direct marketing, sales promotion, personal selling, advertising and public relation. Now, in the digitally evolving world, uni-directional marketing promotion hardly exists anymore.

Even traditional print, TV, radio and outdoor advertising and promotions direct the audience to an online channel like a website or social media account.

And, all digital marketing channels are communication-based; such as your website, social media platforms, email, instant messaging, video chat, paid ads etc.

Marketing in the digitally evolving world is no longer promotion but communication.

Marketers must have a keen understanding and in-depth knowledge of the different forms of traditional and digital marketing communication available to them.

BRAND EQUITY

The third aspect of marketing in the Marketing Inverted PyramidTM is brand equity.

Branding is a positive result of the first two aspects of marketing, value creation and communication.

Brand equity is the value and power of the brand that determines its worth. That value is determined by the collective consumers perception of, expectations of, and experiences with the brand.

So branding is creating a perception in the minds of the customers.

If people think highly of a brand, it has positive brand equity. When a brand consistently under-delivers and disappoints to the point where people recommend that others avoid it, it has negative brand equity.

Building brand equity is a long-term strategy. But if done well, it can provide many benefits to a business. Some ways brand equity can be measured is using metrics such as:

  • The price premium that the brand charges over other brands for the same category of product.
  • The additional volume of sales generated by the brand as compared to other brands in the same category.
  • The popularity or positive image of the brand among its target customers. This can be measured through surveys or the number of users/ fans/ followers on social media platforms.
  • The share prices of the company that owns the brand, if it is a publicly listed company.

All three aspects of marketing work in a successive cyclical manner indefinitely. Each aspect reinforces the other, and together guide the strategy and tactics of the business.

If you are interested to learn more about the Marketing Inverted Pyramid TM, it is explored in detail in “Evolve, Adapt or Collapse: Bottom Line Driven Marketing in a Digitally Evolving World”.

J C Sum

J C Sum is a certified management consultant (TR 43:2015), an American Marketing Association Professional Certified Marketer (PCM®) in marketing management as well as a certified digital marketing strategist (SSG-WSQ accredited) with 11 years of experience specializing in search engine optimization, content marketing and analytics. He is the author of "Evolve, Adapt or Collapse" and has been featured on The Straits Times, Business Times, Channel News Asia, The Edge Singapore, CNA938 and Money FM 89.3.

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