If you’ve been exploring the marketing world for even a short time, you’ve probably heard of “The 4 Ps”: product, price, place, and promotion.
Sounds simple enough, right?
Simple, yes, but there’s a little more to this concept. Today, we’ll cover a bit about where the 4 Ps came from and how you can use them in your business.
And don’t make the mistake of thinking that this is just for the big guys. These concepts are equally important (if not more so) for small businesses to understand and implement.
What Are the 4 Ps of Marketing?
The 4 Ps are key concepts introduced by Neil H. Borden in the 1950s.
In his 1960s article, “The Concept of the Marketing Mix,” he describes drawing inspiration from one of his associates, James Culliton.
He paints a picture of a marketing executive as “an artist, a mixer of ingredients, who sometimes follows a recipe prepared by others, sometimes prepares his own recipe as he goes along, sometimes adapts a recipe to the ingredients immediately available, and sometimes experiments or invents ingredients no one else has tried.”
The marketing mix had 12 elements, but this was later refined in 1960 by E. Jerome McCarthy’s book, Basic Marketing: A Managerial Approach, which popularized the idea of the 4 Ps.
But on to the important stuff:
How can you use each of these in your business?
The 1st P of Marketing: Product
Your company starts with a product, or at the very least, a very well fleshed-out idea that will become a product that draws the attention of investors.
Without at least one of these two things, there’s no money to be had.
It doesn’t have to be a physical product, as in industries like food and retail. You might offer digital products, software, or services.
Product is, surprisingly (or unsurprisingly, depending on what your job is), where a lot of companies fall flat.
You run into issues with companies overthinking problems and inventing issues that no one actually has. (Think of the really bad infomercials with unbelievably unbelievable scenarios.) Or, they reinvent the wheel, creating the exact same product as hundreds of other competitors have before them.
What’s in a Product?
The “product” in the 4 Ps refers to both the actual product and your product market. (And if you don’t have a market, you won’t get very far!)
When you’re creating your offerings and thinking up ideas for what products to sell, consider the following:
- What problem are you solving?
- Why is that a problem?
- What makes your product unique?
- What are you doing that your competition isn’t?
- Why should people buy from you?
(“Why is that a problem?” might seem like an odd question, but it also answers the question, “Are we solving a problem that truly needs to be solved or just making crap up?”)
For a product to have a chance at success, it needs to fulfill one of two things:
It needs to fill an existing, proven demand.
Or, it needs to be pretty dang compelling. (Read: so compelling that people are breaking down your door to get a chance at buying your product before it sells out again.)
Not to burst anyone’s bubble, but it’s generally not going to be the latter. Filling demand is usually much easier and more practical than trying to generate new demand and carving out your own market.
The 2nd P of Marketing: Price
The second P in the 4 Ps of marketing: price.
Pricing isn’t everything, but it can definitely have an amazingly positive effect on your ability to sell… ultimately impacting your marketing ROI.
We’ve all heard stories about how people can base their perceptions off of price alone. You’ve probably heard about how a headset didn’t sell as well as it could have because the price was too low.
And while that’s possible, a price point that’s too high can lock out your target market.
Pricing Your Products
If you’ve created a course or service with the average employee in mind but have set price points that only someone pulling over six figures can afford, you’ve effectively lost your target audience before you’ve even released the product.
Think about who your target audience is and, more importantly, what prices they’re willing and able to pay.
What kind of things do you need to think about when you’re pricing your product?
- Pricing strategy. Do you utilize psychological pricing? Market-based pricing?
- Pricing model. Freemium? Monthly subscriptions? One-time fees with upgrades for specific features?
- Your audience’s budget. One of the falls of competitor-based pricing is that there’s a tendency to go off of industry prices, rather than focusing on if those are really the most sustainable prices.
- Profit margins. You’ll want to have enough of a profit margin (in most cases) that you can run sales, offer discounts, have a “shrink” buffer, and run a referral or affiliate program.
Not all of these will be relevant to your business, and there are lots of other factors to consider, but these are at least a few things to get you started.
When you’re pricing your products, you want to look at the big picture. Look at competitors, industry leaders, your target audience, and current customers if you’re already in business. Ask for feedback and send out surveys if that’s an option.
The 3rd P of Marketing: Place
If you’re a brick-and-mortar business, “place” can make or break your business. Location, location, location.
Depending on your type of business, you might need the kind of foot traffic that you can only get in downtown locations, or hot spots around parks, restaurants, coffee shops, or other places people tend to hang out and visit neighboring businesses.
In my case, when we were looking at taking over our local gaming store, we considered picking up and moving somewhere more in-town that had more foot traffic.
But over the years, the shop had become a bit of a destination spot. After a lot of thinking and looking at demographics, moving might have lost us to more customers than we could gain. (And we had all of the parking space we could ask for, which was desperately needed for game nights.)
Factoring in “Place” to Your Strategy
For physical businesses, there are quite a few factors you need to think about. Upkeep, foot traffic, neighboring businesses, nearby competitors, and demographics, just to name a few things.
If you’re an online business, “place” can be a little more difficult to figure out. You’re doing more research on where your target audience spends most of their online time.
Is it on a specific social media platform? Forums? Maybe you have to rely more on SEO or keep an email list to stay in touch with them.
Each social media platform has lots of data on its audience to help you decide. Platforms like BuzzSumo can help you check out what your competitors are doing and find influencers to help market your products to even more targeted audiences.
Look at what kind of content your audience is sharing, which can give you some clues as to what sites and platforms they might spend a lot of their time on.
The 4th P of Marketing: Promotion
Promotion is the most involved of the 4 Ps, especially since it’s an ongoing effort that you’ll be stuck with for the life of your relationship with your company, or until you change positions and sucker someone else into taking over.
Luckily, in the digital marketing world, we have a ridiculous amount of data to help us with this endless task. You’re in luck if most of your selling is done online.
But let’s start with the more complicated of the two—what if you’re a business with a physical store to worry about?
If you’re a physical business, promotion becomes just about everyone’s job—servers, retail employees, customer service, sales, management…they all need to be in the loop. Any opportunity to generate revenue falls under the promotion umbrella.
Retail employees need to know how to display products in a visually appealing way and, more importantly, should be able to talk about product features and benefits. Getting products into people’s hands is a form of promotion that many small retail stores tend to overlook.
Customer service needs to be there to offer the support needed so customers can make the most of their purchases and build trust so that they’re more likely to return.
Sales should be educated enough on products to be able to offer customers the right solution.
The tech industry is a good example of an industry where it’s difficult to educate sales professionals on the technical knowledge they need to make the right sale. You often encounter issues with reps selling hardware that doesn’t work together. Product education, especially in tech companies, is an absolute must.
For businesses that are mostly online, you share some overlap like customer service and sales, but your promotional methods are going to be a bit different.
Where retail businesses have a physical sales floor and storefront to worry about, your website is typically your sales floor, with social media or other channels as your storefront.
It’s important to know where your customers are most likely to spend their time—Facebook, Instagram, Twitter, TikTok, Pinterest, etc.—so that you’re not wasting ad dollars on the wrong platform. It’s important to know “place,” but it’s equally important to know which platforms are best for bigger promotional efforts.
Likewise, physical businesses need to know what promotional methods best reach their audience. If your target audience is older, you might be dealing more with Facebook, radio ads, newspaper ads, and perhaps ad placements through other local businesses.
Setting aside general advertising for a moment, let’s look more at specific campaigns. Rather than the round-the-clock ads you might run for brand awareness and just trying to get the word out, these tend to focus more on three things: what, where, and when.
“What” might refer to a specific sale or discount, a new product launch, or something else you want to promote to your audience. Your switching gears a bit and focusing more on promoting specific products rather than your overall business.
“Where” refers to the best channels to reach your audience. Is it through other local businesses? Social media? Radio or newspaper ads? Digital display ads? Through your blog or email list?
“When” refers to seasonality. Maybe you have a product that people are more likely to buy during certain times of year. If you sell tea or coffee, you’ll often see a spike in traffic during Autumn and Winter, and even more so around the holidays.
If you’re a gaming company, you might find more opportunities during spring break or over the summer when school is out.
For restaurants, there might be a lot more fluctuation, down to specific days of the week and even certain hours of the day. Maybe people are more likely to visit you Tuesdays, Thursdays, and on the weekend when more people are off work.
All of these factors should be taken into consideration before you start work on your campaign. They can be easy to overlook, especially if you fall into the trap of wanting to reach anyone and everyone.
As someone who spends a lot of time working on the “promotion” side of things, I could probably write pages on just this section alone. But this is a good starting point to get you thinking!
The 4 Ps of Marketing: FAQ
What kind of businesses would find the 4 Ps helpful?
Every business needs these in one form or another, but it’s especially important to small businesses and those with tight budgets and other resources.
When are the 4 Ps of marketing useful?
You’ll find yourself using the 4 Ps of marketing in every stage of your business, but it’s easier if you’ve used them to implement your strategy from the very beginning or when you’re re-evaluating your marketing strategy.
These are useful in a few areas in particular—when you’re first starting a business, creating a new product, service, or other offering, or when you need to test or create a new marketing strategy.
What’s the 5th P of marketing?
The 5th P of marketing that has started coming up more and more (but really, has been there all along) is people.
With the increase in the need for digital marketing and the availability of more data, “people” needs to be a section of its own. This outlines who you’re marketing to, what their needs are, and what kind of messaging gets across to them.
This especially includes the research of new target audiences. For some companies, this means revisiting overlooked audiences (like their own staff) and looking at how their usual messaging can be changed to fit these audiences.
Final Thoughts on the 4Ps of Marketing
Whether these are new concepts or something you’re just looking to revisit, the 4 Ps are essential to any of the work you do in the marketing space. They help you find your own direction and create with your audience in mind, setting yourself apart from your competition.
To summarize, the 4 Ps are:
- Products planning/ideas
- Services, digital products, or physical goods
- Target market
- Pricing strategy
- Pricing models
- Profit margins that can support both your overhead and promotion
- Where your audience is
- Demographics of physical locations or online channels
- What, where, and when to promote
- Promotional goals and strategies
- Product education, so every member of your company has the ability to promote
These are just some highlights to help you get started. There are books upon books of these concepts that just start to touch on the foundations, and even more that start to cover more advanced strategies.
Hopefully this helps explain the basics of these concepts and gets you started on fleshing out an effective strategy for your business. Large or small, you’ll find that addressing these sets a good foundation for the rest of your marketing efforts.