Marketing Mix - The 4Ps
The marketing mix is made up of the following elements, often referred to as “the four Ps”:
- Product (or service)
- Place (location and distribution)
For a business to succeed, you need to:
- get all of the elements right
- strike a balance between the elements
Differentiation of your business from your competitors can be achieved through adjusting the elements to make your product/business more attractive. For example, if you wanted to market a high profile brand, you would focus on promotion rather than price.
Satisfying the customer’s needs or wants and in turn making a profit is your aim in providing a product/service. It is essential therefore that you get your product/service right.
There are various ways in which you can make your product stand out and be appealing. Use your senses in evaluating the product: ask yourself how does it feel and look.
- Attractiveness - is the packaging and the product itself visually appealing?
- Expectations - does the product meet customer’s expectations? For instance, they may have expectations in terms of product quality.
- Benefits - does the product have benefits a customer wants or needs? Benefits describe what it is that a customer gets out of a product, and differ from features. For example, consider the following features and benefits of a car:
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- Functionality – how well does it do the job it’s supposed to?
- Competition - how does it fair compared to other similar products?
- Reliability – is it reliable?
‘Place’ is the mechanism through which goods and/or services are moved from the manufacturer/ service provider to the user or consumer. It is also referred to as distribution, channel or intermediary.
Successful distribution of your product/service is not only dependent on the delivery mechanism. You must also consider your customers – where is it that they would expect to go to find products/services like yours? It is therefore essential that you choose the correct distribution channel(s).
- From where do your customers expect, or prefer, to buy the product or service?
- What are the existing distribution channels in your chosen market?
- Do you want to use direct or indirect channels? (eg 'direct' to a consumer, 'indirect' via an intermediary)
- Do you want to use single or multiple channels?
- If using an intermediary:
Is the intermediary familiar with your target consumers?
Is the intermediary appropriate for your business?
- the Internet
- overseas distributors
You need to know what your customers would be prepared to pay in order to price something effectively.
Compare your products/services with similar ones belonging to your competitors. This should give you some idea of typical prices in the market.
You will then need to decide upon a pricing strategy. For example, you might use cost based pricing where total costs are calculated and a mark up is added to give the required profit. Or you might consider differential pricing, where you charge different segments of your market different prices for the same service. The strategy you choose will have an effect on the success of the product. (For a further discussion of pricing strategies see the link at the bottom of the page.)
Whichever strategy you choose, you need to distinguish between cost and price. To maximise your profits, you should aim to charge the maximum amount that people will pay, while seeking to reduce costs and increase productivity.
Promotion is about effectively communicating with your customers so that they are encouraged to buy from you. You need to promote to both existing customers and prospective ones, which may involve promoting to each in different ways.
To promote successfully, you need to take the following into account:
- You need to know as much as possible about your customers and their buying habits.
- You need to identify which are the important questions customers could have about your product/service, eg is this a reliable product? Your promotional activities should answer these questions.
- You need to identify your unique selling point (USP) and communicate it effectively to your customers.
- You need to identify the style of your promotional activities
- You need to decide when you are going to promote.
When you have answers to the above, you are in a stronger position to decide what to say, how to say it, when to say it, and which promotional method(s) to use.
The ‘promotions mix’ is the combination of promotional elements you use to promote your product/service.
The various elements which can make up the promotions mix include:
- Personal Selling
- Sales Promotion
- Public Relations
- Direct Mail
- Trade Fairs and Exhibitions
You would choose the appropriate elements for your product/service and integrate them to form a promotional campaign.
Sometimes you might see the marketing mix described in terms of the 'five Ps', to include People. Alternatively, the ‘seven Ps' also include Physical evidence (eg uniforms) and Process (the whole customer experience).