Business Management     

Published: Jan 15, 2023
Updated: Jan 15, 2023

Importance of 5 Cs of marketing

Just as important as the 4 Ps of marketing are the The 5 Cs of marketing — Company, Collaborators, Customers, Competitors and Climate – need to be internalised well by organizations if they are to successfully reach the target consumer segment. Dr Vidya Hattangadi notes that internal factors should be analysed by corporates before turning to external factors. She cites the example of Apple’s hugely successful iPhone, which was the result of mixing its existing products, iPods and iTunes. Moreover, Apple’s enviable customer service has created fantastic sales and happy customers. She also cites the example of Taj Hotels’ exemplary customer service. Collaborations too are no more an option in today’s world and need to be present throughout the entire supply chain.

A SWOT analysis is a strategic planning tool which is used in helping an organization to identify Strengths, Weaknesses, Opportunities and Threats related to competition and in strategic planning. SWOT helps in situational assessment or situational analysis. Like the 4 Ps of marketing (Product, Price, Place and Promotion), there are 5 Cs of marketing. The 5 Cs stand for Company, Collaborators, Customers, Competitors and Climate. These five elements help in performing a situational analysis which is a strategic process that helps in identifying opportunities and threats, both internal and external, to an organization. The 5 Cs also help product positioning which helps in reaching the target segment.

Before analysing external factors, organizations need to look at internal factors. They need to look at areas in which they enjoy a competitive edge over their competitors. If an organization maintains an innovative company culture, for example, Apple, whose success largely comes from its approach to innovation, it continuously improves existing products which eventually leads to ‘Creative Destruction’. The iPhone, which is Apple’s most successful product, came from mixing their existing products, iPods and iTunes, and combining them with a phone and a camera which resulted in a product unlike any other at the time. Apple’s iPhone created a huge market disruption. Apple enjoys unique product knowledge, excellent efficiency and productivity among employees and it is very good in giving customer service — that creates fantastic sales and happy customers.

WOOING CUSTOMERS

Today’s digital age is compelling organizations to take a relook at their customer-centricity promises. Companies struggle to get customer insights from other industries to match their offerings. Organizations cannot rely on benchmarking from the industry in which they exist. For example, the HDFC Bank mobile banking app has been compared with the Ola app in terms of simplicity. Consumers are now accustomed to best-in-class user experiences, both online and offline. A customer-centric organisational culture is no longer just a good thing; rather, it is a necessity for survival.

Taj Hotels is best known for its customer service. Customer delight is present in every interaction with guests. The staff, whether in housekeeping, restaurants or room service are all very courteous and at the service of their customers. Taj employees go out of their way to give the best hotel stay experience to their customers. So, rather than a customer service process, the customer service culture shines through.

Climate: The climate in the 5 Cs of marketing approach stands for external factors, opportunities and threats of SWOT. It refers to the attitude of the government and lending institutions towards business activity. It also includes the tax rate, inflation and attitude of labour unions towards employers. Favourable business climates lower risks, reduce costs and connect companies to customers and quality workers. There is no one-size-fits-all approach to business climate change. Each company’s approach depends on its particular business model. The Energy, Commodity, Financial and Technology sectors are the most volatile industries.

Since the past 2 years, the sports utility vehicles (SUV) sector is performing well. India’s major automobile manufacturing companies include Tata Motors, Ashok Leyland, Mahindra & Mahindra, Force Motors, Maruti, Toyota, Hyundai and Kia. The craze for SUVs is increasing day by day. At present, waiting periods for some of the most popular models stretch to over two years, and fresh orders are still flowing in. Car buyers are now willing to spend more on their personal mode of travel and prefer top-end cars. The SUV segment enjoys a healthy business climate in India. The SUV segment’s contribution, which was around 19 per cent of the industry, has now gone up to 40 per cent in 2021-22.

Collaborators: In today’s business world, companies are usually deeply tangled, providing each other with services that are vital for day-to-day operations. Collaboration is when a group of people come together and contribute their expertise for the benefit of a shared objective, project or mission. For example, if an organization needs to control its marketing efforts, it needs to map out the entire supply chain, listing all of the third-party distributors, suppliers, partners and contractors. The reason collaborators must be a part of the 5 C analysis is that collaborations create synergy.

SUPPLY IS KEY

You need to understand how your supply chain works in any given situation if you are going to be able to make adjustments effectively. For instance, if a supplier fails to deliver an order, you need to know exactly whom to contact to sort it out, or have a prepared list of alternative options that you can fall back on.

Competitors: No business operates in a vacuum. Whether you’re a one-person shop or a larger company, you and your products are always being judged in comparison with the competition that provides the same thing. So, if you want to have any chance of standing out, you need to have a clear understanding of who your competitors are, their position in the market and what advantages they have over you, as well as how they attract customers. Only by learning as much as possible about your competitors can you execute the marketing 5 Cs effectively and identify the most promising ways to position yourself against others.

By learning about the biggest strengths and weaknesses of your competition, you can find ways to fill a gap in the marketplace and position your product uniquely, in a way that nobody else will be able to match.

(Dr Vidya Hattangadi is Professor, Babasaheb Gawde Institute of Management Studies, Mumbai)