The Marketing Mix and 4 Ps
Monday, November 25, 2013
The Marketing Mix and 4 Ps
Understanding How to Position Your Market Offering
How to use the 4Ps,
with James Manktelow & Amy Carlson.
What is marketing?
The definition that many marketers learn as they start out in the industry is:
Putting the right
product in the right place, at the right price, at the right time.
It's simple! You just need to create a product
that a particular group of people want, put it on sale some
place that those same people visit regularly, and price it at
a level which matches the value they feel they get out of it;
and do all that at a time they want to buy. Then you've got it
made!
There's a lot of truth in this idea. However,
a lot of hard work needs to go into finding out what customers
want, and identifying where they do their shopping. Then you need
to figure out how to produce the item at a price that represents
value to them, and get it all to come together at the critical
time.
But if you get just one element wrong, it can
spell disaster. You could be left promoting a car with amazing
fuel-economy in a country where fuel is very cheap; or publishing
a textbook after the start of the new school year, or selling
an item at a price that's too high – or too low – to attract the
people you're targeting.
The marketing mix is a good place to start when
you are thinking through your plans for a product or service,
and it helps you avoid these kinds of mistakes.
Understanding the Tool
The marketing mix and the 4 Ps of marketing
are often used as synonyms for each other. In fact, they are not
necessarily the same thing.
"Marketing mix" is a general phrase
used to describe the different kinds of choices organizations
have to make in the whole process of bringing a product or service
to market. The 4Ps is one way – probably the best-known way –
of defining the marketing mix, and was first expressed in 1960
by E J McCarthy.
The 4Ps are:
Product (or Service).
Place.
Price.
Promotion.
A good way to understand the 4Ps is by the questions that you
need to ask to define your marketing mix. Here are some questions
that will help you understand and define each of the four
elements:
Product/Service
What does the customer want from the product/service? What needs does it satisfy?
What features does it have to meet these needs?
Are there any features you've missed out?
Are you including costly features that the customer won't actually use?
How and where will the customer use it?
What does it look like? How will customers experience it?
What size(s), color(s), and so on, should it be?
What is it to be called?
How is it branded?
How is it differentiated versus your competitors?
What is the most it can cost to provide, and still be sold sufficiently profitably? (See also Price, below).
Place
Where do buyers look for your product or service?
If they look in a store, what kind? A specialist
boutique or in a supermarket, or both? Or online? Or direct,
via a catalogue?
How can you access the right distribution channels?
Do you need to use a sales force? Or attend trade fairs? Or make
online submissions? Or send samples to catalogue companies?
What do you competitors do, and how can you learn from that
and/or differentiate?
Price
What is the value of the product or service to the buyer?
Are there established price points for products
or services in this area?
Is the customer price sensitive? Will a small decrease in price
gain you extra market share? Or will a small increase be
indiscernible, and so gain you extra profit margin?
What discounts should be offered to trade
customers, or to other specific segments of your market?
How will your price compare with your competitors?
Promotion
Where and when can you get across your marketing
messages to your target market?
Will you reach your audience by advertising
in the press, or on TV, or radio, or on billboards? By using
direct marketing mailshot? Through PR? On the Internet?
When is the best time to promote? Is there seasonality in the
market? Are there any wider environmental issues that suggest or
dictate the timing of your market launch, or the timing of
subsequent promotions?
How do your competitors do their promotions? And how does that
influence your choice of promotional activity?
The 4Ps model is just one of many marketing mix lists that have
been developed over the years. And, whilst the questions we have
listed above are key, they are just a subset of the detailed
probing that may be required to optimize your marketing mix.
Amongst the other marketing mix models have
been developed over the years is Boom and Bitner's 7Ps, sometimes
called the extended marketing mix, which include the first 4 Ps,
plus people, processes and physical layout decisions.
Another marketing mix approach is Lauterborn's
4Cs, which presents the elements of the marketing mix from the
buyer's, rather than the seller's, perspective. It is made up
of Customer needs and wants (the equivalent of product), Cost
(price), Convenience (place) and Communication (promotion). In
this article, we focus on the 4Ps model as it is the most well-recognized,
and contains the core elements of a good marketing mix.
Using the 4Ps Marketing Mix Model
The marketing mix model can be used to help you decide how to take
a new offer to market. It can also be used to test your existing
marketing strategy. Whether you are considering a new or existing
offer, follow the steps below help you define and improve your
marketing mix.
Start by identifying the product or service
that you want to analyze.
Now go through and answer the 4Ps questions
– as defined in detail above.
Try asking "why" and "what if" questions
too, to challenge your offer. For example, ask why your target audience needs a particular feature. What if you
drop your price by 5%? What if you offer more colors? Why sell
through wholesalers rather than direct channels? What if you
improve PR rather than rely on TV advertising?
Tip:
Check through your answers to make sure they are based on sound knowledge and facts. If there are doubts about your assumptions, identify any market research, or facts and figures that you may need to gather.
Once you have a well-defined marketing mix, try "testing" the overall offer from the customer's perspective, by asking customer focused questions:
Does it meet their needs? (product)
Will they find it where they shop? (place)
Will they consider it's priced favorably? (price)
And will the marketing communications reach them? (promotion)
Keep on asking questions and making changes
to your mix until you are satisfied that you have optimized
your marketing mix, given the information and facts and figures
you have available.
Review you marketing mix regularly, as some
elements will need to change as the product or service, and
its market, grow, mature and adapt in an ever-changing competitive
environment.
Key Points
The marketing mix helps you define the marketing
elements for successfully positioning your market offer.
One of the best known models is the Four Ps,
which helps you define your marketing options in terms of product,
place, price and promotion. Use the model when you are planning
a new venture, or evaluating an existing offer, to optimize the
impact with your target market.
Tags:
Skills, Strategy Tools
Understanding How to Position Your Market Offering
How to use the 4Ps,
with James Manktelow & Amy Carlson.
What is marketing?
The definition that many marketers learn as they start out in the industry is:
Putting the right
product in the right place, at the right price, at the right time.
It's simple! You just need to create a product
that a particular group of people want, put it on sale some
place that those same people visit regularly, and price it at
a level which matches the value they feel they get out of it;
and do all that at a time they want to buy. Then you've got it
made!
There's a lot of truth in this idea. However,
a lot of hard work needs to go into finding out what customers
want, and identifying where they do their shopping. Then you need
to figure out how to produce the item at a price that represents
value to them, and get it all to come together at the critical
time.
But if you get just one element wrong, it can
spell disaster. You could be left promoting a car with amazing
fuel-economy in a country where fuel is very cheap; or publishing
a textbook after the start of the new school year, or selling
an item at a price that's too high – or too low – to attract the
people you're targeting.
The marketing mix is a good place to start when
you are thinking through your plans for a product or service,
and it helps you avoid these kinds of mistakes.
Understanding the Tool
The marketing mix and the 4 Ps of marketing
are often used as synonyms for each other. In fact, they are not
necessarily the same thing.
"Marketing mix" is a general phrase
used to describe the different kinds of choices organizations
have to make in the whole process of bringing a product or service
to market. The 4Ps is one way – probably the best-known way –
of defining the marketing mix, and was first expressed in 1960
by E J McCarthy.
The 4Ps are:
Product (or Service).
Place.
Price.
Promotion.
A good way to understand the 4Ps is by the questions that you
need to ask to define your marketing mix. Here are some questions
that will help you understand and define each of the four
elements:
Product/Service
What does the customer want from the product/service? What needs does it satisfy?
What features does it have to meet these needs?
Are there any features you've missed out?
Are you including costly features that the customer won't actually use?
How and where will the customer use it?
What does it look like? How will customers experience it?
What size(s), color(s), and so on, should it be?
What is it to be called?
How is it branded?
How is it differentiated versus your competitors?
What is the most it can cost to provide, and still be sold sufficiently profitably? (See also Price, below).
Place
Where do buyers look for your product or service?
If they look in a store, what kind? A specialist
boutique or in a supermarket, or both? Or online? Or direct,
via a catalogue?
How can you access the right distribution channels?
Do you need to use a sales force? Or attend trade fairs? Or make
online submissions? Or send samples to catalogue companies?
What do you competitors do, and how can you learn from that
and/or differentiate?
Price
What is the value of the product or service to the buyer?
Are there established price points for products
or services in this area?
Is the customer price sensitive? Will a small decrease in price
gain you extra market share? Or will a small increase be
indiscernible, and so gain you extra profit margin?
What discounts should be offered to trade
customers, or to other specific segments of your market?
How will your price compare with your competitors?
Promotion
Where and when can you get across your marketing
messages to your target market?
Will you reach your audience by advertising
in the press, or on TV, or radio, or on billboards? By using
direct marketing mailshot? Through PR? On the Internet?
When is the best time to promote? Is there seasonality in the
market? Are there any wider environmental issues that suggest or
dictate the timing of your market launch, or the timing of
subsequent promotions?
How do your competitors do their promotions? And how does that
influence your choice of promotional activity?
The 4Ps model is just one of many marketing mix lists that have
been developed over the years. And, whilst the questions we have
listed above are key, they are just a subset of the detailed
probing that may be required to optimize your marketing mix.
Amongst the other marketing mix models have
been developed over the years is Boom and Bitner's 7Ps, sometimes
called the extended marketing mix, which include the first 4 Ps,
plus people, processes and physical layout decisions.
Another marketing mix approach is Lauterborn's
4Cs, which presents the elements of the marketing mix from the
buyer's, rather than the seller's, perspective. It is made up
of Customer needs and wants (the equivalent of product), Cost
(price), Convenience (place) and Communication (promotion). In
this article, we focus on the 4Ps model as it is the most well-recognized,
and contains the core elements of a good marketing mix.
Using the 4Ps Marketing Mix Model
The marketing mix model can be used to help you decide how to take
a new offer to market. It can also be used to test your existing
marketing strategy. Whether you are considering a new or existing
offer, follow the steps below help you define and improve your
marketing mix.
Start by identifying the product or service
that you want to analyze.
Now go through and answer the 4Ps questions
– as defined in detail above.
Try asking "why" and "what if" questions
too, to challenge your offer. For example, ask why your target audience needs a particular feature. What if you
drop your price by 5%? What if you offer more colors? Why sell
through wholesalers rather than direct channels? What if you
improve PR rather than rely on TV advertising?
Tip:
Check through your answers to make sure they are based on sound knowledge and facts. If there are doubts about your assumptions, identify any market research, or facts and figures that you may need to gather.
Once you have a well-defined marketing mix, try "testing" the overall offer from the customer's perspective, by asking customer focused questions:
Does it meet their needs? (product)
Will they find it where they shop? (place)
Will they consider it's priced favorably? (price)
And will the marketing communications reach them? (promotion)
Keep on asking questions and making changes
to your mix until you are satisfied that you have optimized
your marketing mix, given the information and facts and figures
you have available.
Review you marketing mix regularly, as some
elements will need to change as the product or service, and
its market, grow, mature and adapt in an ever-changing competitive
environment.
Key Points
The marketing mix helps you define the marketing
elements for successfully positioning your market offer.
One of the best known models is the Four Ps,
which helps you define your marketing options in terms of product,
place, price and promotion. Use the model when you are planning
a new venture, or evaluating an existing offer, to optimize the
impact with your target market.
