The four Ps is a marketing framework used by marketers and business students around the world. Developed in 1960 by Michigan State marketing professor E J McCarthy as a refinement of the marketing mix, it defines the crucial aspects that make up a marketing strategy and helps businesses focus their energy on four key areas of marketing.
The four Ps are product, place, price, and promotion.
The product is the backbone of the four Ps. It’s the good (or service) that the business offers to the marketplace in order to meet a customer need or want and the source of a business’s revenue.
Some of the questions that marketers need to consider when developing the product include:
- How does it differentiate from the competition?
- How will it benefit customers?
- What need or want does it fill?
- Does it meet industry standards if necessary?
- How will it be packaged?
- How will it be designed?
- How does it fit in with the business’s product mix?
The place includes the geographical region where the product will be marketed as well as its distribution channels, and the type of locations (department store, boutique) where the product will be sold.
When determining the most suitable place for a product, marketers need to ask themselves several questions:
- Is the product in line with the norms, culture, and customs of the region?
- Does it need to comply with regional regulations?
- Will distribution be direct (product is delivered straight from the supplier to the end-user) or will an intermediary (wholesaler, retailer) be used?
- If using an intermediary, a national grocery chain for instance, where will the product be located in the store? Is it worth the extra charges to have the product shelved at eye-level?
- What type of location suits the product best? Is it a high-quality product that should be sold in boutiques or is it a mass-produced item that can be sold at a discount store?
As the name suggests, the price is the cost of the product. Businesses must find a happy medium between the costs of goods and services associated with selling the product and the price point at which to sell the product. The supply and demand must also be evaluated to help determine a suitable price.
Important questions to consider include:
- Will discounts be offered to certain partners or on bulk purchases? What about sales?
- What is the price elasticity of demand? Will price changes greatly affect sales?
- Is the value of the product accurately reflected in the price?
- Will the product turn a profit (and how much), or will it act as a loss leader?
Promotion encompasses all communication that the company does with the public regarding the product. This includes PR, advertising, cold calling, email marketing, and the use of social media among other things. Businesses must align all communication to ensure that customers don’t receive contradictory information. A consistent message across the promotion mix helps to strengthen the brand.
Marketers should examine the following when developing a promotion strategy:
- Which communication medium is most effective for reaching the target market?
- How much should be budgeted for promotion?
- What will be the breakdown of the promotion mix? Will most communication be done through cold calling or through television advertising?
- Are there any laws to adhere to (such as those that tobacco companies face)?
- How will customer complaints be handled?
- What training will salespersons and telemarketers receive?
Though the four Ps isn’t the be-all and end-all of marketing, it’s a good starting point for developing a marketing strategy. It covers many important aspects of marketing a product or service and helps businesses develop a consistent message across the four areas. Though valid arguments are made that they need overhauling, the four Ps still offer a decent framework for marketers to work with, even after more than 50 years since their introduction.
Do you think that the four Ps are still useful in 2013? Tweet us and let us know your thoughts on the validity of the four Ps vis-à-vis modern technology.