What is the concept of 4 Ps?
Marketing is a vast concept, and there are thousands of strategies that fall under the umbrella of marketing. Everyone has probably heard of the 4 Ps of marketing – either through a friend or read in a textbook. This most commonly known and widely misunderstood concept is the foundation of any marketing strategy. Whether you are spending hundreds of thousands of dollars on traditional marketing or online marketing, the 4 Ps of marketing is the basics you have to follow.
The 4 Ps are critical elements that help a company develop advertising and branding strategies to attract customers and distinguishes it from the competition. They include product, price, place, and promotion. Commonly known as the Marketing Mix, the 4 Ps are the fundamental pillars of any marketing strategy. They are interlinked through the internal and external factors in the business environment.
By using the 4 Ps, marketers analyze the crucial factors for their respective businesses. Companies develop unique selling points for their products and services or promote their brand by combing these four aspects. By evaluating the product, price, place, and promotion of a product, marketers differentiate them from the competitors.
Neil Borden coined the term Marketing Mix, but over a period of time, the idea was refined and reshaped. Ultimately, Jerome McCarthy made the concept more concise had only four elements in his version - the 4 Ps. The idea is now widely used throughout the world, not just for the big companies but also for the small ones. Marketing companies, branding and web designing agencies make the most of this concept.
What are the 4 Ps? Why are they critical?
Before we analyze this concept, let us go back to understanding the basics behind it and why the idea was invented in the first place.
After the Second World War, the United States witnessed unprecedented economic prosperity. Many businesses were flourishing, and they had optimistic consumers to target. Back in the 1950s, with consumers having various brands at their doorsteps, marketing strategies started to change. Industries were growing, and manufacturers and advertisers were targeting these optimistic consumers in innovative ways.
Niel Borden, an advertising professor at Harvard University, wrote an article in 1964 titled "The Concept of the Marketing Mix" stating ways to influence the audience through advertising. Borden's ideas had a significant impact on the business world. But these ideas were reshaped and refined to achieve the best results. E. Jerome McCarthy, a marketing professor at Michigan State University then created the concept of 4 Ps out of Borden's vision, which the world is still using decades later.
When the concept first came into existence, it helped marketers understand and bridge the gap which prevented from popularizing their products and putting forward an influential marketing campaign. Today, with the rise of the internet, the 4 Ps are again refined and reshaped to achieve newer goals. People, process, and physical evidence are now added in the original 4 Ps to integrate businesses and consumers effectively.
How do the 4 Ps work?
Product: this refers to a good or service that the company offers to the consumers. The products can either be tangible or intangible like services, ideas, or experiences. A product is something that fulfils a consumer's demand or creates a new demand by creating the need for it.
A product has its life cycle, and a marketer’s job is to cater to all the aspects of the life cycle of that product to make it successful. Product manufacturers put in a lot of efforts to decide the product design, such as its features and quality. Branding is another aspect which is highly regarded as a standout concept among competitors. Packaging and labelling further add to a product’s uniqueness and give it an identity.
Apart from these physical aspects, marketers also focus on the services to offer to the customers after the purchase. These include complimentary services and after-sales services. Guarantees, warranties, and return of the products are also decided during the product development process.
Price: it is what the customers pay to purchase the product. Marketers decide on the price for the product by comparing the product's real value and the perceived value. The price is influenced by various aspects, including the supply cost, seasonal discounts, and most importantly, competitors prices.
The price of a product or service also depends on its segments, such as common goods or luxury goods. Product and price also have an impact on the other two Ps – Place and Promotion. Marketers also provide discounts on the actual pricing for different reasons to attract more customers or increase the likability of the product. Many brands refer to themselves as non-discount brands as they do not want to give the impression to the consumers that the product is common or less essential. They keep the price tag as the brand value to it.
Place: Now that the product and price are decided, marketers come to the next point - the place. Product placement is an integral part of a product as it is where the product physically meets the consumer. Hence, strategic product placement is critical to the success of a product.
To determine the placement, marketers analyze the geography and target audience. They try to understand which area the demand is coming from and how best can they supply the product in that area. If they are creating a new space in the market, marketers cater to those audiences which they know will purchase the product. Finding the best spot to place a product is always a challenge to the businesses.
The target area, departmental store and also the shelf it will be displayed on determines success. Another aspect for the advertisers is the placement for their ads, such as television, newspaper, online, or the front of a store. The strategic advertising placement will then generate more eyeballs for the products.
Promotion: there are many techniques ways to promote the product such as through advertising, public relations, events etc. The intent is to create brand awareness and influence the consumers to come to the purchase decision. The long-term process of promotion creates brand loyalty among customers.
Out of a hundred different brands existing in the market, why will a consumer buy only your product? An impactful promotion can determine that. Through advertising, marketers make the consumers aware that a product like this exists in the market, and it's at this price. These are the benefits if you buy the product and most importantly, how it is different from others. Now because of the internet, marketers place and promote their products on digital platforms.
To read about a related marketing concept, multi-level marketing, click here.