The classic 4Ps of marketing

IN this week’s article I have decided to go back to basics. All marketing starts with the 4Ps. The 4Ps were first formally conceptualised in 1960 by E. Jerome McCarthy in the highly influential text, “Basic Marketing, A Managerial Approach”.

Product/service

Refers to the item actually being sold or what the company produces (whether it is product or service, or a combination of both) and is developed to meet the core need of the customer — for example, the need for transport is met with a car. The product must deliver a minimum level of performance; otherwise even the best work on the other elements of the marketing mix won’t do any good.

The challenge is to create the right “bundle of benefits” that meet this need. So what happens as customer needs change, competitors race ahead or new opportunities arise? We have to add to the “bundle of benefits” to improve the offering, create new versions of existing products, or launch brand new products. When improving the product offering, think beyond the actual product itself — value can be added and differentiation achieved with guarantees, warranties, after-sales or online support, a user-friendly app or digital content like a video that helps the user to make the most out of the product.

Price

This is the only revenue-generating element of the mix — all other marketing activities represent a cost. Price refers to the value that is put for a product. It depends on costs of production, segment targeted, ability of the market to pay, supply — demand and a host of other direct and indirect factors. It’s important to get the price right to not only cover costs but generate profit!

There can be several types of pricing strategies, each tied in with an overall business plan. Before setting prices, we need to research information on what customers are willing to pay and gain an understanding of the demand for that product/service in the market. As price is also a strong indication of the positioning in the market against competitors (low prices=value brand), prices need to be set with competitors in mind too.

Place/access

This is the “place” where customers make a purchase or the point of sale. This might be in a physical store, through an app or via a website. Some organisations have the physical space, or online presence to take their product/service straight to the customer, whereas others have to work with intermediaries or “middlemen” with the locations, storage and/or sales expertise to help with this distribution.

The decisions to be made in this element of the marketing mix concern which intermediaries (if any) will be involved in the distribution chain and also the logistics behind getting the product/service to the end customer, including storage and transportation.

In every industry, catching the eye of the consumer and making it easy for her to buy it is the main aim of a good distribution or “place” strategy. Retailers pay a premium for the right location. In fact, the mantra of a successful retail business is “location, location, location”.

Promotion

So we have a fantastic product, at an appealing price, available in all the right places, but how do customers know this? Promotion in our marketing mix is about communicating messages to customers, whichever stage they are in the buyer journey, to generate awareness, interest, desire or action. Promotion is all the activities undertaken to make the product or service known to the user and trade.

This can include advertising, word of mouth, press reports, incentives, commissions and awards to the trade. It can also include consumer schemes, direct marketing, contests and prizes.

We have different tools for communication with varying benefits. Advertising is good for raising awareness and reaching new audiences, whereas personal selling using a sales team is great for building relationships with customers and closing a sale.

The challenge? To choose the best tool for the job, and select the most effective media to reach our audiences based on what we know about them. If your customer is a regular on Instagram then that’s where you need to be talking to them!

This doesn’t just apply to customers. Communicate to other stakeholders too like shareholders and the wider public to build company reputation. The same principles apply; choose the right tools and media that fit with what you are trying to achieve.

The new Ps Physical Evidence

Physical evidence provides tangible cues of the quality of experience that a company is offering. It can be particularly useful when a customer has not bought from the organisation before and needs some reassurance, or is expected to pay for a service before it is delivered.

For a restaurant, physical evidence could be in the form of the surroundings, staff uniform, menus and online reviews to indicate the experience that could be expected. For an agency, the website itself holds valuable physical evidence — from testimonials to case studies, as well as the contracts that companies are given to represent the services they can expect to be delivered.

Process

All companies want to create a smooth, efficient and customer-friendly journey — and this can’t be achieved without the right processes behind the scenes to make that happen. Understanding the steps of the customer journey — from making an enquiry online to requesting information and making a purchase — helps us to consider what processes need to be in place to ensure the customer has a positive experience. When a customer makes an enquiry, how long will they have to wait before receiving a response? How long do they wait between booking a meeting with the sales team to the meeting taking place?

What happens once they make an order? How do we make sure reviews are generated after a purchase? How can we use technology to make our processes more efficient? All of these considerations help build a positive customer experience.

People

A company’s people are at the forefront when interacting with customers, taking and processing their enquiries, orders and complaints in person, through online chat, on social media, or via the call centre. They interact with customers throughout their journey and become the “face” of the organisation for the customer. Their knowledge of the company’s products and services and how to use them, their ability to access relevant information and their everyday approach and attitude needs to be optimised.

People can be inconsistent but with the right training, empowerment and motivation by a company, they can also represent an opportunity to differentiate an offering in a crowded market and to build valuable relationships with customers.

Partners

Partners are defined as alliances outside the firm whom marketers work closely with.

Presentation/Packaging

Presentation is the act of presenting any of the different Ps in the marketing mix and/or components to the firm’s customers, suppliers, wholesalers, retailers, sales force, marketing intermediaries, clients, employees, partners, and/or others.

Purpose

If you do not know the “why and what” you want from any piece of marketing material before you distribute or create it - you might be wasting a whole lot of money. With all that is available today for tracking from landing pages to unique URLS and PURLS (personalised URLS) specific to a marketing piece - why aren’t you tracking as much as possible. Know in advance - is it brand awareness or a call-to-action. What numbers are you aiming for (Predictions) — an increase in website visitors, conversion from visitor to customer, or new customer leads — I think you get the idea - know the “why and what”.