Author: John Alson
Updated on May 10, 2020
There were many definitions of marketing mix but the best of them are customer-focused. They are focused on customer needs and customer satisfaction. Marketing is creating communicating and delivering value to your customers. That's a brilliant definition but who is your customer in the first place? To answer this question we go through a process that we called STP (Segmenting-targeting-positioning). We're not digging into details now but you have to know that we cannot serve everyone in the world because of our budget and our resources are limited. Therefore we need to group individuals according to their common needs, to their behaviors and then we can decide the most promising and profitable ones to target with our offerings. Our offerings will be rendered in what we usually call the 4 P's or marketing mix which are the building blocks of marketing. The 4 P's are our product, price, promotion, and place and I will explain each and every one of them.
The first P is the product: this is what you plan to sell. It can be an online game or a car part. It's not just the item or service itself, that's included in the product P, it's also the different varieties of your product the quality of it. How it's designed packaged and branded anything that adds value to your product. Any reason a customer might want to purchase it as part of the product so obviously it's pretty important.
The next P is price. You may be tempted to believe that the price of your product or service is merely the amount charged customers when they purchase it dispel that notion immediately the price includes the retail price and discounts or special offers bonuses payment plans and credit terms in short anything even remotely related to money. It makes sense when you think about it my discount lowers the price of an item a bonus offer also lowers the price. Credit terms and payment plans make it easier for your customers to pay the price.
All of these must be considered the third P is promotion. This is what most people think of when they think of marketing. Promotion includes advertising personal selling, sales promotion, public relations and even sponsoring your nephew's Little League game. That's promotion making a sales call. That's promotion handing up brochures, that's promotion answering client emails.
The final P is place: the place is also known as distribution.
The place also includes the logistics of each of these things. If your product is sold in retail stores;
Everything that you need to consider how to get your prior to your customer or to a place where your customer can find it.
Now, remember it's not enough to choose a good product, price, place, and promotion because we have to know how to define good.
Let's use an example to illustrate 4 P's in real life. Let's provide an example Hugo Boss which sells high-end men's and women's clothing and their products are superb. Customers love the way they look when wearing them. These are high-end products and the pricing range is high but that's not surprising given the high-quality products and the high propensity to spend extra by the firm's customers.
Hugo Boss runs promo campaigns with world-famous testimonials like Gerard Butler these advertisements are shown on TV and in magazines like Vogue and men's health. That's great because the brand can reach target customers through these media channels and boost its premium brand image. Everything sounds great right, product, price, and promo are synced in an excellent way.
Let's consider the 4th P place let's imagine the following hypothetical situation the firm's marketing team sells both clothes in Cheaper locations slightly outside of city centers. What do you think will happen? Well, it will lose its clients that's what's going to happen premium customers are unwilling to look for top brands anywhere outside of top shopping streets and luxurious shopping malls a shop in a cheaper area would send a mixed signal which will confuse the clients. Trying to imagine it a superb product high prices and solid media presence. Three strong signals are not matched with the shop outside of city centers in inexpensive areas right next to discount stores. This example is extreme but it illustrates that all 4 Ps must be integrated and directed in the same direction otherwise a company's competitive model wouldn't succeed. The four-piece shouldn't be applied in a static way either there can be times when one changes usually it will be the firm's product or the pricing of its products.
Maybe this is better to imagine you are a marketing manager in a company that produces air conditioners. Your R&D team has just you know they've come up with an amazing breakthrough. They have created an air conditioner that uses 50% less energy than any other air conditioner in the marketplace. Until this moment your company strategy has been cost leadership but this new finding allows you to create a differentiated product.
So what are you going to do? Tell the R&D team their amazing breakthrough is not in line with the firm strategy even though it might win the firm market share and allow it to charge more for its products and marketing studies indicate potential improvements of profitability or perhaps you could readjust the 4 P's plan to correspond to a differentiated product that's going to cost more will be sold by premium resellers and will need an extensive advertising campaign. The second scenario sounds better right the 4 P's can be readjusted and need to be readjusted when one of the P's changes. Think of the 4 P's as an ecosystem that must adapt to a changing environment if one component changes all four must evolve and adapt accordingly.
If you would like to learn about marketing, you can check our article 5 C's of marketing.