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Marketing models that have stood the test of time

By Dave Chaffey (http://www.smartinsights.com/author/davechaffey/) 12 Jan, 2016

Online business and revenue models j 170 s f 252

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Explore our Digital Marketing Strategy and Planning Toolkit (http://www.smartinsights.com/improve/digital-marketing-strategy-planning-toolkit/)

What do you think is the best, i.e. most useful marketing model? Download our two free guides on marketing models to
learn how to apply them

You may have noticed we're fans of using practical models as tools to support marketing strategy development? We believe a clear,
simple model gives us a framework to assess how we're doing things now compared to our competitors and plan growth strategies
for the future. They're also great for communicating the purpose and reason behind a strategy you are pursuing.

I think most would agree that models are useful "Mind Tools" to structure thinking and communicate a strategy, but there's a
problem. Over the years, many models have been developed and some are academic rather than of practical application in the
"real world". So many marketing models have been developed over the years, that it can be overwhelming to know what to use and
when... A few years ago now, I was talking to marketing consultant and trainer, Annmarie Hanlon
(http://www.smartinsights.com/author/annmarie-hanlon/) about the power and challenge of using planning models and we decided
it would be good to collaborate to create a free guide where we picked and explained the most useful, practical models for
students and professionals alike to share. This guide was published in 2013 and has been updated since:

Recommended Guide: Essential Marketing Models

In our free, illustrated guide to 15 classic planning models diagrams we explain what they are and give examples of why and how to
apply them in business.

Download our Essential Marketing Planning Models (http://www.smartinsights.com/guides/essential-marketing-models/) guide.

Which are the most popular marketing models?

In the Essential Models guide we have selected what we see as the classic,most popular models that have stood the test of time
and we think are still relevant in today’s era of omnichannel marketing. But which are the most useful - do take our poll to share
which you think are of the most practical use and are valuable in understanding opportunities to grow a business.

Please select which you nd most useful of the 15 models covered in our guide - you can select more than one or suggest others.
When you answer you will see the overall results.

Please select the most useful marketing

planning model(s) for you

1. McKinsey 7S model

2. The 7Ps of the Marketing Mix

3. AIDA

4. The Ansoff Matrix

5. The BCG Matrix

6. Diffusion of Innovation

7. DRIP

8. Porter's Five Forces

9. Price-Quality-Strategy Model

10. Push and Pull Marketing

11. Product Lifecycle

12. RACE Planning

13. Segmentation, Targeting and

Positioning (STP)

14. SOSTAC(R)

15. SWOT (TOWS) matrix

Other:

Vote

View Results

We would also like to hear what you think about the relevance of these model in 2016. Have they had their day, do you nd them
useful, do you have better alternatives? Please tell us what you think in the comments below.
Some marketing models are digital focused while others apply equally to digital and traditional forms of communication. For
example, our own RACE model is designed speci cally for digital marketing. Because of this, we've just produced a new guide free
for all members on digital marketing models speci cally. It gives details on the 10 key digital marketing models, so you get the most
relevant marketing models for your business.

(http://www.smartinsights.com/guides/digital-marketing-models/)
Download free, Basic member resource – Digital Marketing Models Guide

This new guide, published in 2016 lists 10 models that can be used by marketing professionals and students for digital audits, planning and
strategy.

Access the Digital Marketing Models Guide (http://www.smartinsights.com/guides/digital-marketing-models/)

A quick review of the most popular marketing models

Since I'm a digital marketer, I have my own views on the relevance of these, indeed in my books I have often included them. In fact,
most are included in my Digital Marketing: Strategy, Implementation and Practice book.

So before we wrote the guide I thought it would be nice to share an overview of the relevant models here for anyone passing this
way who isn't familiar with them. A more detailed explanation is available in the free guide!

1. 7 Ps of The marketing mix

The 7P's of the Marketing mix model (http://www.smartinsights.com/marketing-planning/marketing-models/how-to-use-the-7ps-

marketing-mix/) are Product, Price, Place, Promotion, People, Process and Physical evidence - these elements of the marketing mix
form the core tactical components of a marketing plan.

(http://www.smartinsights.com/wp-content/uploads/2011/03/marketing-mix-model-600x288.png)

I think it's right this is at the start of the list since it's still widely used and I think is a simple way to think through how a company
markets its products. A good model to explain marketing strategy to someone who isn't a marketer. But it su ers from a push
mentality completely out-of-keeping with modern digital marketing approaches of listening to and engaging customers in
participation through social median marketing.

2. USP

Unique Selling Proposition is the concept that brands should make it clear to potential buyers why they are di erent and better than
the competition.
 This is a simple concept and an essential message to communicate online since the core brand message often isn't clear. Here
are some examples of websites (http://www.smartinsights.com/blog/web-design/online-value-proposition-examples/) that
communicate their online value proposition (http://www.smartinsights.com/blog/digital-marketing-strategy/online-value-
proposition/) well. It's not really a model, so although it was included in the CIM centenary vote it's not included in our guide.

3. Boston Consulting Group Matrix

This well known, essential MBA model categorises products o ered by a business in a portfolio based on their performance rating
them as Stars, Cash Cows, Dogs and Question Marks as below.

(http://www.smartinsights.com/marketing-planning/marketing-models/use-bcg-matrix/attachment/the-growth-share-matrix/)

 1. Dogs: These are products with low growth or market share.

 2. Question marks or Problem Child: Products in high growth markets with low market share.

 3. Stars: Products in high growth markets with high market share.

 4. Cash cows: Products in low growth markets with high market share

I nd this isn't so applicable in the online marketing world for small and medium businesses - it's more of a Big Business corporate
strategy model.

See Annmarie's post on the BCG Matrix model (http://www.smartinsights.com/marketing-planning/marketing-models/use-bcg-

matrix/) for more details.

4. Brand positioning map

This model allows marketers to visualise a brand’s relative position to competitors in the market place by plotting consumer
perceptions of the brand and competitor brands against the attributes that drive purchase.
 This is a great concept for understanding how customers see a brand. We've included an example in the guide. I can't recall
many descriptions of this being applied online. I have seen it used as part of user-testing though in comparing di erent websites?

The creation of an engaging online brand is so important to success in digital marketing, it's a pity there aren't more e ective
branding models.

(http://www.smartinsights.com/digital-marketing-strategy/customer-segmentation-targeting/segmentation-targeting-and-
positioning/attachment/positioningmap/)

5. Customer Lifetime Value models

Customer Lifetime Value is the concept used to assess what a customer is worth, based on the present value of future revenue
attributed to a customer’s relationship with a product.

(http://www.smartinsights.com/wp-content/uploads/2011/03/lifecycle-model-600x393.png)

A di erent class of models to others, this is more of calculation model - covered in Chapter 6 of my Internet Marketing Book. CLV
is mainly important online for transactional sites and certainly investment decisions like allowable cost per acquisition (CPA) must
be taken with future customer purchases and attrition rates considered.

6. Growth strategy matrix

The Anso ’s model (http://www.smartinsights.com/marketing-planning/create-a-marketing-plan/anso -model/) is a matrix that can

be used to identify alternative growth strategies by looking at present and potential products in current and future markets. The
four growth strategies are market penetration, market development, product development and diversi cation.
(http://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/marketing-models/attachment/anso -
matrix-model-applied-digital-marketing/)

Anso 's model dates back to the 1960s, but I still cover it in the books to show how companies should "think out of the box" with
new opportunities for their digital strategies by considering new opportunities for market and product development rather than
simply market penetration which misses the opportunities of digital marketing for me.

7. Loyalty ladder

This model shows the steps a person takes before becoming loyal to a brand as they move through the stages of prospect,
customer, client, supporter and advocate.

Loyalty models are useful as a way of thinking through the opportunities to generate lifetime value.

8. PESTLE

As an extension of the traditional PEST model, this analysis framework is used to assess the impact of macro-environmental factors
on a product or brand - political, economical, social, technological, legal and economic.

TBH PESTLE/PEST/DEEPLIST make me groan - to me they're a text book approach which is far removed from improving results. I
nd students tend to review these in-depth at the expense of creating innovative strategies. The results of the poll seem to
suggest others agree.

However, PESTLE is still widely taught and Annmarie Hanlon is a fan so to explain it's value to me and others she has this in-depth
post on how to use the PEST or PESTLE model (http://www.smartinsights.com/marketing-planning/marketing-models/pestle-
analysis-model/).

9. Porter’s Five Forces

The Five forces in Porter's model (http://www.smartinsights.com/marketing-planning/marketing-models/use-porters-5-forces/) are

Rivalry, Supplier power, Threat of substitutes, Buyer power and Barriers to entry and are used to analyse the industry context in
which the organisation operates.
 Yes this one features in my books and I reference a classic 2001 paper by Porter on applying the Five Forces to the Internet. But, I
personally think it has limited practical value - yes we know customers have more bargaining power online. So what?! I also think
it under-represents the power of intermediaries like comparison sites and publishers in the online world.

10. Product Life Cycle

This di usion innovation model (http://www.smartinsights.com/marketing-planning/marketing-models/di usion-innovation-model/)

plots the natural path of a product as it moves through the stages of Introduction, Growth, Maturity, Saturation and Decline.

11. Segmentation, Targeting and Positioning

This three stage STP process i (http://www.smartinsights.com/digital-marketing-strategy/customer-segmentation-

targeting/segmentation-targeting-positioning-model/)nvolves analysing which distinct customer groups exist and which segment the
product best suits before implementing the communications strategy tailored for the chosen target group.

(http://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/marketing-
models/attachment/segmentation-targeting-positioning-stp-model/)

As a model which is focused on delivering relevant products, services and communications to the customer and so generating
value for an organisation, this is essential for every marketer to understand and apply in practice.

12. PR Smith's SOSTAC® model

This acronym stands for Situation, Objectives, Strategy, Tactics, Actions, Control and is a framework used when creating marketing
plans.
I'm a big fan of using PR Smith's SOSTAC (http://www.prsmith.org/sostac)® model as a way of planning and implementing strategies.
It features in all my books and I know Paul Smith, who created it well - he's my co-author on Emarketing Excellence.

Reference

PR Smith (2011) The SOSTAC ® Guide - to writing the perfect plan (http://www.amazon.co.uk/The-SOSTAC%C2%AE-Guide-writing-
ebook/dp/B0063GDKMA) by PR Smith (2011), published by www.prsmith.org (http://www.prsmith.org/) and available at Amazon
(http://www.amazon.co.uk/The-SOSTAC%C2%AE-Guide-writing-perfect-ebook/dp/B0063GDKMA).

Finally, I wanted to thank the Chartered Institute of Marketing (http://www.cim.co.uk/) who prompted the idea for this post when they
were celebrating their centenary and they ran voting around di erent models. It also prompted the idea for a free guide to help
explain the value of models for planning.
 By Dave Cha ey

Dave is CEO and co-founder of Smart Insights. He is editor of the 100 templates, ebooks and courses in the digital
marketing resource library created by our team of 25+ Digital Marketing experts. Our resources used by our Expert
members in more than 80 countries to Map, Plan and Manage their digital marketing. For my full pro le, or to connect
on LinkedIn or other social networks, see the About Dave Cha ey (/about-dave-cha ey/) pro le page on Smart
Insights. Dave is author of 5 bestselling books on digital marketing including Emarketing Excellence and Digital
Marketing: Strategy, Implementation and Practice. In 2004 he was recognised by the Chartered Institute of Marketing
as one of 50 marketing ‘gurus’ worldwide who have helped shape the future of marketing.

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