Principles of the Marketing Mix (The 4 P’s)
This blog outlines the principles of the Marketing Mix (the 4 P’s) and its implications for business. Those who apply the principles leverage greater market share and appeal to B2B and B2C markets.
All brands – large and small – can appeal to different customers with intelligent use of the 4 P’s, or the 7 P’s as they are sometimes known in the service sector.
The marketing mix is created by the ingredients which marketers use to achieve the best results in line with customers’ tastes in the target market. The elements of the marketing mix are below; how you use them determines success:
> PRODUCT > PRICE > PLACE > PROMOTION
For example, a motor vehicle manufacturer like Audi:
- Produces cars of the highest quality and fit for the needs of different groups of consumers.
- Cars at value for money prices, depending on the market segment to which they are targeted.
- Sold through quality outlets from showrooms in prime locations, i.e. in the right places.
- Marketed through appropriate promotional and advertising activity.
In the car example imagine the 4 P’s as controls which can guide your car/business in the most profitable direction. Use those levers to create market advantage for your business and to differentiate your product or service from that of your competition.
Getting the right mix of ingredients for a cake or a marketing campaign is essential for the Chef De Marketing to meet his/her marketing objectives and to satisfy the needs of the customers they serve.
Which comes first – the chicken or the egg? Audi had to find out the needs of customers in its target market then they developed the right product or service to meet those needs. The perfect product must provide VALUE to customers.
Value is seen in the FEATURES but by Audi users is more recognised by the BENEFITS that the car brings: – > ESTEEM > POWER > LOOKS
Does your product/service have a USP? If it does not, you have a ‘me too’ product, i.e. one that is not distinctive, will not stand out in the eyes of customers, and most importantly may not justify a price premium. Your product needs its own persona.
Create a USP or persona even if it may be more perceived than real – differentiate your product/service by colour, shape, ease of use, or even its premium price. Make sure you market benefits and exploit a Unique Selling Proposition that is sustainable in the long term.
A product is only worth what customers are prepared to pay for it. Price defines product worth and if that is high end quality then price should reflect that and not be seen as ‘too cheap’. Your price also should be competitive and value for money but at the same time allow you to profit.
Price positions you in the market place. If your market is savoury pies then you think of an onion when pricing your pie. There are three alternative and very different pricing propositions you might use:-
If you offer an up market product/service a skimming price strategy will make you a ‘price leader’ or ‘price maker’, whereby hopefully you may command a premium in the market. If you go for a penetration pricing strategy you should be planning for low profit/high volume and stealing market share.
If you are unsure of where to pitch your price you can go ‘middle of the road and be a ‘price taker’ with a ‘me too’ price. If price does not differentiate your product/service and it is the same as everyone else, you will need to find other ways to stamp your advantage via promotion or product features.
Place is the market place in which you sell your product or service . In B2B this can mean using SME’s, retail, public service, and export channels. In the new internet-driven market place we also need to decide whether we wish to make sales using online or offline methods (or a combination of both).
Whatever channel/s are used to reach customers you must ensure that the right product service is on sale in the right place, and at the right time when people need it!
Sales analysis will reveal the best place to merchandise and supply products/services and get the optimum sales advantage. So understanding the buying process and what influences different types of buyers before/during the sale is a key part of getting this right. Business to business and business to consumer markets are quite different in this regard.
For example, do buyers want to physically see and try products before they buy. Do they window shop online before making a sale in store, or do they make choices in store then buy online? You must understand exactly how this happens before determining your marketing plan.
The promotional mix defines how a company communicates to and influences the customers in your target market. Promotional methods should be tailored to the way customers do business in that sales channel. Depending on your sector and product profile various methods can be used to communicate your features/benefits and USPs.
The task of promotions is to increase the customer’s awareness of your product/service and their propensity to buy. Unless you offer an online only product there are many promotional options you will need to consider based on careful calculations of the advertising cost per sale and how it can interact with the consumer.