Chapter 7
The 4 Ps of marketing
When launching a new product or service, you have to think carefully about a range of factors that will determine its attractiveness to consumers. The most widely used way of defining this ‘marketing mix’ is to think in terms of the 4 Ps: product, price, place and promotion. This is a useful checklist to ensure that you have thought through the key elements of your value proposition.
When to use it
- To help you decide how to take a new product or service-offering to market.
- To evaluate your existing marketing strategy and identify any weaknesses.
- To compare your offerings to those of your competitors.
Origins
While its origins are much older, marketing really took shape as a professional discipline in the post-war years. An influential article by Neil Borden in 1964 put forward the ‘concept of the marketing mix’, which was about making sure all the different aspects of the product or service were targeted around the needs of a particular type of consumer. Subsequently, Jerome McCarthy divided Borden’s concept into four categories – product, price, place and promotion – and the 4 Ps were born. Marketing professor Philip Kotler is also associated with the 4 Ps, as he was influential in popularising them during the 1970s and 1980s.
What it is
In a competitive market, consumers have lots of choice about what to spend money on, so you have to be very thoughtful about how to make your offering attractive to them. The 4 Ps is simply a framework to help you think through the key elements of the marketing mix:
- Product/service: What features will consumers find attractive?
- Price: How much will consumers be prepared to pay?
- Place: Through what outlets should we sell it?
- Promotion: What forms of advertising should we use?
At its heart, the 4 Ps is about market segmentation: it involves identifying the needs of a particular group of consumers, and then putting together an offering (defined in terms of the 4 Ps) that targets those needs.
The 4 Ps are used primarily by consumer products companies, who are seeking to target particular segments of consumers. In industrial marketing (where one business is selling to another business) the 4 Ps are less applicable, because there is typically a much greater emphasis on the direct relationship between the seller and buyer. Product and price are still important in industrial marketing, but place and promotion less so.
An alternative to the 4 Ps is Lauterborn’s 4 Cs, which present the elements of the marketing mix from the buyer’s perspective. The four elements are: the customer needs and wants (which is the equivalent of product), cost (price), convenience (place) and communication (promotion).
How to use it
Start by identifying the product or service that you want to analyse. Then go through the four elements of the marketing mix, using the following questions to guide you.
Product/service
- What needs does the product or service satisfy? What features does it have to help it meet these needs?
- How does it look to customers? How will they experience it? What sort of brand image are you trying to create?
- How is it differentiated from the offerings of your competitors?
Price
- What is the value of the product/service to the consumer?
- How price-sensitive is the consumer?
- How are competitors’ offerings priced? Will you price at a premium or discount to competitors?
- What discounts or special deals should be offered to trade customers?
Place
- Where do buyers usually look for your product/service? Through what media or channels will you make it available?
- Do you need to control your own distribution, or even your own retail experience for this product/service?
- How are your competitors’ offerings distributed?
Promotion
- Through what media, and with what sort of message, will you seek to reach your target market?
- When is the best time to promote your product/service? Are there certain times of the day or week that are better? Is there seasonality in the market?
- Can you use free PR (public relations) to reach your target market?
It is useful to review your marketing mix regularly, as some elements will need to change as the product or service evolves, and as competitive offerings become available.
Top practical tip
First of all, it is important to make sure your answers to the questions above are based on sound knowledge and facts. Many marketing decisions are based on untested assumptions about what consumers need, and often new product launches are successful because they challenge those assumptions.
Second, a successful product launch is one where there is a high degree of consistency between the various different elements. Increasingly, and this is especially true in the online world, it is possible to target a very specific set of consumers, so choices about place and promotion are now far more critical than they might have been in the past.
Top pitfall
Taken too literally, the 4 Ps can narrow your focus unduly. For example, if you are working on developing an online version of a magazine or newspaper, you may seek to replicate the ‘product’ and ‘price’ that worked in a paper-based world. However, that would be a mistake because consumers use digital content very differently, and the approach firms take when charging for online services is often very different to what worked with traditional products. Similarly, a focus on ‘promotion’ runs the risk of getting you into a campaign-based mentality of increasing web-page hits, when the business may benefit from more valuation content such as blogs or infographics.
The 4 Ps are a useful way of structuring your thinking about the elements of the marketing mix, but you should always be prepared to depart from this structure if it helps you do something a bit more creative.
Further reading
Borden, N.H. (1964) ‘The concept of the marketing mix’, Journal of Advertising Research, 24(4): 7–12.
Kotler, P. (2012) Marketing Management. Harlow, UK: Pearson Education.
Lauterborn, B. (1990) ‘New marketing litany: Four Ps passé: C-words take over’, Advertising Age, 61(41): 26.
McCarthy, J.E. (1964) Basic Marketing: A managerial approach. Homewood, IL: Irwin.