The four Ps of marketing have been around since the 1950s, guiding businesses to reflect on all the elements which dictate whether or not they will be a success. Of course, these considerations have evolved over the decades, but the fundamental business premise has stayed the same. Let’s take a look at what the four Ps of marketing really are, and how they might impact on your own business model.
What are the four Ps?
Simply put, the four Ps stand for Product, Price, Place and Promotion. These four concepts can be seen as a succinct rundown of the selling process, beginning with the very thing you are trying to see (‘product’), followed by how much you hope to sell it for (‘price’). Next comes ‘place’, or where it will be on sale (whether that’s a single physical setting, through a national or global chain, or an online location), and finally comes ‘promotion’ – the marketing of your product or service.
What exactly are the four Ps used for?
The concept of the four Ps is not new; in fact, it has been around since the 1960s when E. Jerome McCarthy, who at that time was Marketing Professor at Michigan State University, devised the framework as a tool to inform businesses about their overall marketing strategy. The aim was to drive higher sales by having all of the four Ps working together. Sometimes called the ‘marketing mix’, this framework aims to steer marketers to have the right product in the right place – at the right time. And, of course, the promotion element makes sure the right people know how to find it!
This might seem simple – it’s the thing you want to sell; but there is more to it than that. First, you need to know what the customer wants your product (or service) to be. In order to read the minds of your potential customers, it is important to carry out plenty of research. This might be in the form of surveys or focus groups, so you can really understand what the customer is after from your product – and how they intend to use it. Think about the latest smartphone; each updated version is the product (excuse the pun) of a great deal of probing from users of its existing model, to really get to grips with how it could be further improved. What do customers want it to look like? How big should it be? How will they use it and what should it be called? Only once you have refined your product, are you ready to consider the remaining Ps in the framework.
This is easy, right? You want to make the most money, so you charge the highest price for your product. Wrong. Clearly, customers are going to compare your product with similar options on the market. If yours is twice the price of your closest competitor’s, you are unlikely to sell too many. Sometimes, a small decrease in price gain will grant you an extra market share, while at other times, a little bit of an increase might go unnoticed and improve your profit margin. Similarly, you need to look at discounts, seasonal offers and incentives for bulk purchasing and factor in how these will affect your overall profit.
This aspect of the four Ps has certainly changed a lot since the 1960s. Globalisation and the internet have changed the way we buy – and more specifically, where we buy from. Since so much of our shopping – both for products and services – takes place online nowadays, this must be factored into the important concept of place. The first consideration for many businesses is whether they retail their product online or just in physical spaces. Smaller companies without the capacity for online retail can still explore other physical avenues; think trade fairs, local boutiques, and perhaps pitching their product to larger chains.
Those who have delved into the ecommerce world also have decisions to make; should you sell via a large marketplace such as eBay or Amazon, or focus on boosting sales via your own website? These big questions all need to be answered correctly, so that your customer knows where to find you!
Now you have the perfect product in the perfect place, you need to tell people all about it! This is where P for Promotion comes in. Finding the perfect way of promoting your product (or service) without damaging your profit is crucial, and success can come in many forms. Advertising – whether it’s online, printed or on TV – can be highly effective – but only if you manage to reach the right people. Often, smaller promotional products like wholesale custom pens such as those sold at pens.com/uk can be a cost-effective way of making your logo visible in lots of places. Cheap but useful items such as promotional pens build brand awareness, although other promotional gifts or branded merchandise can be equally effective, depending on your product or service. Promotion is crucial, both in terms of your brand and the product itself, so a range of strategies usually maximises your potential here.
How have the four Ps changed over time?
You would be forgiven for thinking that an advertising concept thought up in the 1960s might not be relevant for today’s world. Yes, today’s world is different, but the fundamental principles of the four Ps remain the same: sell a product in the right place, for the right price with appropriate promotion, and you’ll be rewarded with substantial sales.
Things have evolved somewhat, though. The internet, for a start, has meant that the element of place has changed, not to mention its impact on communication with the consumer. Three extra Ps sometimes make their way into the framework, too: People, Process and Physical Evidence are now often cited – to the point that you might hear people talk about the 7Ps!
‘People’ are seen more than ever as an integral part of a company, and those companies whose customer service is seen as excellent tend to flourish because of it. Businesses spend a lot of time and effort in training their staff in customer relations, and so this aspect now commands its very own ‘P’.
‘Process’ embodies the whole service process which is delivered to customers, along the whole of their purchasing journey. An example might be when you choose to take out a new bank account. The first step of the ‘process’ is obtaining the application forms. How easy is this? Next, how quickly is the new customer accepted, and through what means is this process communicated? Transferring existing services such as direct debits would form another layer of the ‘process’, as would downloading the new bank’s app.
‘Physical Evidence’ refers to the way companies make the environment appealing to its user. It’s about making something intangible, tangible through things such as comfort, ambience and layout. This is often nothing to do with the actual product, but the way it is presented to the customer. Think ‘plus, comfortable, waiting area’ in a beauty salon, or the way a shop flows to guide the customer through a kind of journey.
These aspects are hard to define, but have such a great impact on the overall impression the consumer has of a particular brand, that they now have their very own identifiable Ps in the world of modern-day marketing, too.
Even though they date back some sixty years, a successful company still relies on a very similar set of elements working in harmony, and effectively. How these elements interact with each other makes for a simple framework which can inform your marketing strategy – and be the difference between failure and success!