Everyone who has studied marketing in the last 50 years has been introduced to the Four Ps of Marketing. It was E. Jerome McCarthy who originally developed the mnemonic which acts as a functional and memorable classification system of the various elements of marketing. Originally, McCarthy defined the marketing mix as a combination of controllable factors at a marketer's command to satisfy a target market. Under the previous marketing model, we sold what we made or produced. Under the new model, we must sell what the customer wants. The old marketing mix looked at the 4Ps of marketing—product, price, place, and promotion. Whether you are thinking of setting up, starting, or expanding your business or selling any product or service, these four elements still need to be at the top of your mind all the time.

The first P is Product. This is what you are selling, whether it is an automobile, software program, diaper, or a service. But it is not just the product or service itself that is included in the product. It also includes the varieties of your product, the quality of your product, how it is designed, packaged, and branded. Anything that adds value to your product and any reason the customer may wish to buy your good or service is part of the product. This consideration must not be underestimated.

The next one is Price, exactly how much you are going to charge for your goods or service. You may believe this is merely the amount you charge customers to purchase it. While this is a key component, the price also includes the MSRP, wholesale price, volume discounts, special offers, incentives, payment plans, and credit terms. In short, it is anything remotely related to the money involved in this transaction.

The third one is Promotion. This is what most people think of when they think of marketing. Promotion includes advertising, the website and landing pages, direct mail and catalogs, e-mails and newsletters, selling, sales promotion, public relations, sponsorships, sales calls, brochures, inside sales, and many other aspects. All are parts of the promotion bucket.

The final P is Place. Place is also known as distribution. How do your clients find your product and where do you sell your product? Is it delivered to their door, is it in a retail store, or do they download it from your website? Place also includes the logistics for each of these things. If your product is sold in a retail store, how did it get there? How many of them are there? How soon do they need more inventory? Everything you need to consider in getting your product to your customer or to a place where your customer can find it is part of place.

It is not enough to define your product, place, price, and promotion unless you also understand whom you are selling to. Customer segmentation and defining your target market will be discussed in more detail in Chapter 3, Laying the Groundwork, but for now, it is enough to understand that the target customer is a critical part of any marketing mix. If my company were selling baby diapers, it would not matter how good my diapers were, how they were priced, where I sold them, or how much money I spent on promotion if my market was single people with no children.

And this is why the fifth P is so important. While many have suggested a fifth P in the past as a part of the marketing mix for such elements as People and Process, I believe a different P is required as so many products seem to ignore a key attribute for product success. I believe the fifth P of marketing should be Problem, and it refers to how well your goods or service can actually solve a target customer's problem or meet the need they have. How many times have you seen a new product hit the market and wondered just who would buy this and why? Without an understanding of your customers, their problems, and how your product can address those problems, you will be rolling the dice with your company's money with each new product release.

And when I speak of customers' problems, I am not just referring to the problems they tell you about or the shortcomings they find with your products or your competitors' products. I am referring to the entire scope of potential problems the customer has and how your offering (which includes your goods or service, as well as distribution channel, website, method of promotion, sales process, customer support, and others) can help solve those spoken, as well as unspoken needs. The following are some obvious ways you can solve your customers' problems with your offering:

It is through VoC that you will begin to understand the fifth P, the problems a customer faces and how you can create a meaningful solution to their needs. In a simple way, a well-executed VoC initiative will allow you to provide a solution to the customer's needs (even if he doesn't know it yet) and allow him to buy it in the way he wishes. And how well you can solve the customer's problems will be directly related to the value they will perceive as a result of buying your product or service.

Many may say that asking customers about product decisions is a waste of time and money, and argue that customers are not able to tell you what they want, or that they don't know what they want until they see it. They say that no customer would have told you they wanted a telephone, a microwave, or an iPad. Compounding the issue for development teams is that customers often do not know, or cannot communicate effectively, their actual needs and requirements. This is one of the major challenges facing businesses today. Because of this, businesses need to continue to find more creative methods of understanding customer requirements.

Part of the problem is that customers describe product attributes in consumer speak or customer speak while engineers and product developers talk in technical jargon which may be foreign to the consumer. If the customer says I want a better computer, are they asking for a computer with a faster processor, more memory, better memory management, a solid-state drive, increased bandwidth, or the ability to handle gaming as well as high-end business applications? If they ask for a more powerful car, do they want to go from 0 to 60 MPH in four seconds, or to have a top speed of 200 MPH, or do they just need the ability to tow a trailer?

Customers tend to talk in the language of needs, and it is our job, as product managers, engineers, or business owners, to develop the solutions to those needs. In the case of a microwave oven, customers were not asking for a microwave oven (the solution). Instead, they were saying they needed a way to heat up food quickly without drying it out and without taking the time or creating the mess to heat it on the range. As marketers, we need to get beyond the features or solutions or even specifications they ask for to understand the underlying needs they actually represent.

Ultimately, customers cannot always recognize or describe their needs in solutions or a specific set of attributes. As a result, customer needs often have to be interpreted from the raw data (but by using quotes whenever possible as they help to provide context). A customer might say they want a digital camera that is easy to use, with enough battery life to last all day, enough storage capacity to hold a full week's worth of picture shooting, the clarity to see the image on a large screen TV without being fuzzy, and the ability to do the occasional quick video. It is up to the marketing team, working with the engineering department, to define this product requirement into functional requirements, such as the number of megapixels, camera function and navigation, sensor size, battery life, composition, and so on.

While customers often cannot tell you the solution or the exact features or technical specifications they need in a new product, they are quite good at telling you their wants, needs, and the problems they are currently experiencing in their lives or work. What we need to do is to develop products inspired by customers, not designed by customers.

Sometimes, of course, there are innovations that address a customer need that customers had previously not known or been able to define, but such products end up being truly innovative and huge market successes. Twitter is one such example. However, if you uncover the thoughts behind products or services like these, you can see the customer voice loud and clear.

While all input from customers should be considered important to the business, I think it is an important exercise to describe what VoC is, and is not. VoC is not:

The process of identifying customer needs and requirements must be a disciplined and repeatable one. This is where many companies go wrong. Organizations that go down this path with no tools or metrics, and a consistent philosophy for collecting, analyzing, and incorporating customer feedback into products, will ultimately waste their time and will abandon future VoC initiatives.

Wikipedia defines Voice of the Customer as a market research technique that produces a set of customer wants and needs, organized into a hierarchical structure, and then prioritized in terms of relative importance and satisfaction with current alternatives. While this is an acceptable definition, Gerald Katz, in The PDMA Toolbook, perhaps offers a more complete view of Voice. Mr. Katz writes that Voice of the Customer is:

When we talk about a complete set of customer wants and needs, we are referring to any number of wants, needs, and desires, not just what the customer verbalizes. We are also referring to the way the customer uses and interacts with your product and competitive products, the benefits or lack of benefits your product brings, and the unarticulated set of problem solutions that could be had if only the customer had the right product.

There is a desire on the part of developers and even product managers to translate the customer speak into their own industry or company jargon. When doing this, the possibility of unintended manipulation or misrepresentation increases dramatically. The best alternative is to maintain the customers' vernacular as much as possible and preferably use direct quotes to illustrate the customer flavor and intent whenever and wherever possible.

When defining needs from customers, it is too easy to rank the ones you deem the most valuable higher based on your knowledge of the industry or your background. Don't fall into this trap. If you genuinely wish to understand the customer's voice, have them group the needs and rank those needs into primary, secondary, and tertiary buckets, and have them prioritize the needs statements you've developed by importance (or any other variable that resonates with the customer) so you can truly understand which ones the customer is most concerned about (and most willing to pay for).

So in conclusion, we have seen new product development evolve from the 1980s, where products were driven by the engineering organization, to an era where products are designed at the intersection of technology and customer need. However, many companies are still too internally focused and tend to organize around four main methods in taking products to market:

Many of these result in poorly defined products that miss the needs of the market, leading to many large expenses to the organization in not only lost opportunity, but also the necessity of creating a need in the marketplace by relying on expensive advertising or an army of salespeople, which results in more product failures than successes.

Companies that have taken the time to create a complete set of customer wants and needs, expressed these needs in the customers' own language, and have organized and prioritized this information consistent with the customers' thinking have been able to create goods and services that address their customers' needs before the customers even realize the need exists. These companies have enthusiastic customers, and have been wildly successful. Successful companies use VoC to get closer to their customers and understand their motivations, desires, needs, and problems.

Of course, it is not enough to collect this information from the customer. It is vitally important to take the customer's voice and inject it into your product development process so you too can create the next great breakthrough product, which is what we will be discussing in the next chapter.