The 4Ps of marketing
This is the third of the “52 management concepts you should know” series that we will bring to you. Sign up for our newsletter to stay up to date via email.
The marketing mix is often crucial when determining a brand’s offering and is often synonymous with the four Ps: price, product, promotion and place.
Product — Every product, good or service, is subject to a life-cycle including a growth phase followed by a maturity phase and finally an eventual period of decline as sales falls. Marketers must do careful research on how long the life cycle of the product they are marketing is likely to be and focus their attention on different challenges that arise as the product moves through each stage. For example, in the growth phase, a company might struggle to fulfill the demand for its newly launch products. Case in point — The latest model of the iPhone
The marketer must also consider the product mix. Marketers can expand the current product mix by increasing the number of products in a line or by increasing the number of product lines. Marketers should consider how to position the product (luxury? utility?), how to exploit the brand, how to exploit the company’s resources and how to configure the product mix so that each product complements the other.
Price — The price is very important as it determines a company’s profit. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, it will affect the demand as well. When setting a price, the marketer must be aware of the customer perceived value for the product. For example, Pepsi Co. would not want to price Pepsi too high beyond the threshold of its customers.
Promotion — This represents all of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as advertising, public relations, personal selling and sales promotion.
Place — This refers to providing the product at a place which is convenient for consumers to access. Place is synonymous with distribution. Various strategies such as intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer to complement the other aspects of the marketing mix.
As we mentioned earlier, this was extended by three more Ps to better model the service industry. The ‘seven Ps’ refers to the already mentioned four Ps, plus ‘physical evidence’, ‘people’, and ‘process’. ‘Physical evidence’ refers to elements within the store. In the offline world, that would be the store front, the uniforms employees wear, signboards, etc. In the online world, that would be the domain name itself, branding etc… ‘People’ refers to the employees of the organisation with whom customers come into contact with. ‘Process’ refers to the processes and systems within the organization that affects its marketing process.
A 4 Cs classification, which is a more consumer-oriented version of the four Ps, was proposed later that attempts to better fit the movement from mass marketing to niche marketing. We will cover that the next time!
