Brands and marketing professionals have long treated Philip Kotler’s 4Ps of Marketing – Product, Price, Place, and Promotion as the four pillars of their marketing strategies. Most marketers would plan and slog to put the right product in the right place, at the right price, at the right time, and hope that the consumer is persuaded to do the desired action. The sole purpose of all this was to, of course, increase the bottom line. But in today’s socially conscious era, where consumers, as well as stakeholders, scrutinize organizations by the yardstick of transparency and authenticity, an organization’s behavior is as much a part of the value equation as products and services. And that’s why ‘purpose’ of an organization that makes it stand for more than the bottom line, needs to be added to this quartet of marketing Ps. This means Purpose is the 5th P of Marketing
Since 2008, Edelman’s good purpose research has found that after price and quality, the next trigger for consumers in purchasing a product or service is ‘purpose’, leaving behind design and product innovation, globally growing 26% over the last five years. In the latest edition of the report, 81% of the consumers surveyed mentioned ‘trust the brand to do what is right’ as a key consideration for brand purchase, and 51% of them think that every brand has a responsibility to get involved in at least one social issue that does not directly impact its business. The research has shown that the role of brands in our lives and society has expanded and people’s expectations from the brands have evolved.
For brands to succeed today, a strategically crafted purpose that includes both relevance and engagement with consumers, employees, customers, distributors, and communities, provides a humanizing and compelling differentiation for a brand and a company. Let’s see a few examples of how some organizations have been able to demonstrate this.
IBM came up with a ‘Smarter Planet’ campaign, which emphasized the application of IBM’s business expertise to solve critical business issues with societal impact – water and food logistics, and access to education for example. From a company that sold iconic PC products defining its brand for 25 years, IBM transformed into higher-value services and software partners. This global strategy created an estimated 40% growth in IBM’s “addressable market opportunity.”
Dove’s Campaign for ‘Real Beauty’ re-defining beauty as we all have been conditioned to believe, wasn’t just a few TVCs, but an offline initiative too through partnerships with Boys & Girls Club of America and the Girls Scouts, self-esteem workshops, and the launch of Dove Movement for Self-Esteem. This social mission increased the overall sales of Dove products by 24% during the initial 2005 launch period and has created an impact for over 8.5 million young people to date.
The drive for demonstrating purpose isn’t just staying limited on the consumer front, but on the employee front too. At HUL, senior management takes a ‘discover your purpose’ workshop and then guide their teams to “discover their individual purposes”. At Deloitte, a consultancy, young field officers were motivated to work in remote villages to save lives due to household pollution, as more people die of ailments related to household pollution every year than road accidents in India.
Even Philip Kotler, who coined the gospel of marketing agrees with ‘purpose’ as the 5th P of marketing, opines that businesses that are ‘firms of endearment’ are highly profitable. He mentions that the marketing costs of such companies are much lower than their peers while customer satisfaction and retention are much higher. He explains it thus: if a company has the interest of customers, employees and the supplier aligned to its business, it creates a win-win situation for everyone, thus improving the overall profitability of the business and that is why ‘purpose’ should also be a core priority of businesses today.
To summarize, purpose creates a more meaningful, sustainable differentiation, fuelling product innovation, growth and sales, eventually building and protecting corporate reputation, as well as engaging and inspiring customers and employees. Purpose has to be an important strategic component when it comes to creating a roadmap to fulfill an organization’s overall business objectives.