Before starting a marketing plan, it’s important to understand some basic concepts of marketing. One of these essential concepts is known as the Four Ps.
The Four Ps, also known as the marketing mix, are key elements that work together to differentiate a good or service from the competition. The Four Ps are product, price, place, and promotion. Understanding these factors helps marketers answer key questions:
· What do consumers want?
· Does our good or service meet or fail to meet consumer needs?
· How is our product or service perceived?
· How do we stand out from competitors?
· How do we interact with customers?
The idea of the marketing mix was birthed in the 1950s by Harvard University advertising professor and American Marketing Association president Neil Borden. It was popularized in the 1960s through Borden’s article “The Concept of the Marketing Mix,” which demonstrated advertising tactics used by companies to engage customers. E. Jerome McCarthy, a marketing professor at Michigan State popularized the term “The Four Ps” in the 1960 textbook Basic Marketing: A Managerial Approach. While extensions such as people, process, and physical evidence have been added to the Four Ps over time, the original four concepts have stood the test of time for a reason and are still relevant in modern marketing.
Why are the Four Ps Important?
Understanding the Four Ps is essential to setting a good or service apart in the marketplace. Because they are so interdependent, it is vital to go through the process of defining each element separately.
Product--Regardless of the type of business you have, you have a product. The product is the good or service you provide or sell. It satisfies a need or provides an experience for a consumer. The product encompasses the name, design, packaging, and branding. A clear definition of product is essential because it defines the remaining aspects of the Four Ps-price, place, and promotion. In short, if you don’t understand your product you don’t have a marketing plan.
Price--Price is essentially what consumers are willing to pay for the good or service your company offers. An effective pricing strategy is dependent upon many factors including real or perceived value, discounts, seasonal pricing, bundling, etc. Essentially, your price should reflect your target audience and should be in an appropriate range to get your product into their hands. This important factor will also affect placement and promotion, and ultimately impact profit margins.
Place--Place is the location where your product will be marketed. It determines where and how your consumers will find your product. This element often overlaps with promotion because it can include advertising, public relations, social media marketing, email marketing, search engine marketing, video marketing, and more. The goal of placement is to get the product in front of the audience that is most likely to purchase, so it is essential to understand your target audience and plan this element carefully.
Promotion--After identifying your product, price, and place, it is finally time to promote. Promotion encompasses each of the Four Ps because its goal is to put the right product at the right price at the right place at the right time, and ultimately turn potential customers into buyers. Promotion delivers your product to the masses. Like placement, this element includes advertising, public relations, social media marketing, and other digital strategy. Promotion determines your marketing message and how it should be conveyed.
Just as they have done since the inception of the model, the Four Ps help businesses address and overcome barriers to widespread adoption of products. If you haven’t already, take some time to define your product, price, place, and promotion. Then you will be ready to develop a marketing plan to effectively position your business in the marketplace.
This is part one of our Marketing 101 series. For part two, see Marketing 101: Do You Know Your Audience?