You have even identified the market segment that you will be pitching to.
All you need now is a step by step process to ensure that your introduction to your target buyers and their perception of your offer can be optimized for recognition, trust, accessibility and ultimately revenue.
Welcome to the concept of the 4Ps of Marketing, popularly known as the Marketing Mix.
In this article, I will walk you through the difference between segmentation and the marketing mix, the basic elements of a good marketing mix, the 3 Ps that people do not talk about and the marketing mix strategies of a brand that knows how to dominate its niche(s).
Why are the 4Ps of Marketing so Critical?
The 4Ps of Marketing create a flexible, dynamic framework where the Ps depend on each other and directly tie back to the positioning of the brand.
The 4Ps of Marketing Create Value – The amount people are willing to pay for a product is directly proportional to the perceived value of the offer. The marketing mix or the 4Ps work together to ensure that prospects clearly understand the benefits of the product and the advantages these benefits will bring to their lives. Promotions play a major role in making this happen.
The 4Ps of Marketing Ensure That Perceived Value Translates into Real Returns – The Product considerations of the 4Ps focus on refining the features and specs of the physical offering or the service that is being sold. It is this element that ensures alignment of expectations with reality. If the promotions lead prospective customers into thinking that a piece of jewelry will up their status amongst their friends, then the actual item needs to come with Cut-Carat-Clarity hallmarks that actually deliver on the promise of exclusivity.
The 4Ps of Marketing are Responsible for Accessibility – The Place and Price work together to take care of accessibility. The products should cost only as much as the budget of the ideal buyers and they should be distributed at outlets which prospects frequent. Selling weights at a gym may actually work better than displaying them at a fitness store. Users visit the gymnasium regularly and can easily pick up a pair of kettle bells to practice at home whereas going to a fitness store is actually going to require them to schedule time separately.
The 4Ps of Marketing Have to Hit the Sweet Spot with Relatability – The Place again plays a vital role here. A product should be sold from an outlet that aligns with the market positioning of the brand (and the offer) making it easy for buyers to relate to it. Incongruences in choice of distribution channels can kill a promising campaign. Imagine if Starbucks created an ambience that screamed caffeine addict instead of “boutique lattes”! Do you think their pricing structure would hold up?
The reason the company can charge a hefty sum for its coffee is because it embodies the essence of “enjoying the coffee experience” and sampling exotic brews which appeals to higher income groups.
What are the 4Ps of Marketing?
When you attempt to use the 4Ps of Marketing, keep in mind that each element can be tweaked later down the line. In fact the Marketing Mix should be constantly monitored for performance and adjusted to improve results.
Product stands for the commodity (or service) that is being sold for a price. The product is at the core of the marketing mix blueprint. Some brands sell one product while others introduce up-sells and cross-sells that serve abutting needs and eliminate related pain points.
This particular section of the mix includes brainstorming and measures that focus on the following:
What are the features and functionalities of the product that can alleviate the problems prospective buyers have?
How has the company decided to position the product?
As a result of this positioning what will the customers expect from the product?
Will the product be able to deliver on the expectations given the features and functionalities that it presently offers?
Is there a need to augment or supplement some of the features and functionalities to position the product exactly as desired?
What are the ways in which the quality of the product can be maintained and then incrementally improved?
How will the product be manufactured? Will it be done in-house or will the product have to be outsourced?
Are there any advantages to be gained from outsourcing like lower costs and thus more funds to add features that can better align the product with the positioning?
What will be the guarantees and warranties associated with the product?
What will be the specs of the product so that it can generate perceived value in keeping with the positioning?
How easily can the product be varied to extend the line?
The main reason why companies launch a product is to generate revenue. And thus it goes without saying that after the actual physical commodity that will be sold, the price is the next most important consideration. Making the mistake of underpricing or over pricing an item can ruin chances of niche wide popularity and result in poor sales.
Choosing a pricing strategy is a sensitive proposition. The mix must address the following:
Will the product price cover out of pocket costs?
Will the product price respect the budget of the ideal buyer?
Does the product need to be priced relatively high because it is a unique asset in the market and can quickly attract a tribe of early adopters? This is called skimming.
Does the product need to be priced on the lower side because it has multiple competitors and price can be a differentiating factor? This aids market penetration.
Can the product pricing strategy borrow from what the competitors are doing?
How will the price change with seasonal and occasion based discounts?
Is variable pricing an option?
What is the optimal price of the product at which it completely aligns with the positioning envisioned for it?
Is the final price reflective of the buyer’s perceived value?
Do not think that “place” refers to only the outlet or the shop from which the product is sold to the end users. Place also encompasses:
The factory floor or the site of manufacturing
The warehouses or the storage units
The distribution channels
The re-distribution channels or support channels
For each site or channel, the marketing mix must take into account:
Product integrity. The items should reach the consumer in top quality and thus should not be damaged during manufacturing, storage or transit.
Product visibility. This applies to the distribution channels. Do they ensure that targeted segments can easily see and interact with the product?
Product reach. The commodities being sold should be distributed through channels that not only make them visible but also put them in front of substantial number of qualified buyers. If a retail outlet agrees to place a product on its main display window (making it visible) but the shop hardly registers any footfall then the move is a fail for the marketing mix.
Companies might choose to directly sell its items to a customer, go through the chain of wholesalers and retailers or work with only vetted agents or distribution partners. The options are endless.
The perceived value of a product determines its price. And this value can be generated only through a robust promotions strategy that positions the commodity as desirable, accessible and capable of delivering promised benefits. Some brands may confuse promotions with marketing. Marketing covers the positioning of an item as well. Promotions refer to only the tangible efforts made to convey the marketing message across different channels.
A product can be promoted through:
mass advertisements on television and print media
paid social advertising
joint ventures with related brands
flyers, emails and physical mailers
Keep in mind that promotions do add to the cost of getting a product to the market. And this in turn impacts price and accessibility of the item.
Booms & Bitner extended the 4 Ps of Marketing to include three additional elements for a marketing mix.
People – The staff members a company employs to interact with the buyers or to contribute back end and in the manufacturing process bring their own touch to the final product. If a brand works with employees who understand the positioning of the item they are in the process of creating and are aligned with its values then the commodity becomes a high quality item sought by customers. People can make a business “productive” and thus a product “profitable” and should be hired through a careful screening process.
Process – From hiring to firing to evaluating item performance, processes define a company, the “manufacturing to market” journey of a product and thus it’s ultimate ROI. There should be well documented processes around each task that has to be executed to properly position a commodity. A balance between customization and standardization is necessary to ensure optimal utilization of resources and the best possible end result for every stage of the product’s life cycle.
Physical Evidence – Let’s just call this the customer experience. Even if a company is selling a tangible product, it can tailor the way buyers engage with its items pre and post purchase.
Take the cue from Apple. Every Apple store gives off an aura of sophistication and quality. The displays are primed for physical touch to promote a sense of ownership of the products. The packaging is snug and the accessories distinctive. Once you become an Apple customer, you know what premium service looks and feels like. The physical evidence of the marketing mix adds to perceived value and complements what the Promotions try to achieve.
What are the 4Ps of Marketing and How Do They Differ from Segmentation or Positioning?
Do not study the 4Ps of Marketing as an isolated topic. Because if you do, you stand to lose sight of the forest for the trees! Market segmentation, marketing mix and positioning are all related concepts that work together.
Market Segmentation – This refers to the practice of identifying buyer groups with similar characteristics and demographic attributes so that they can be clustered together as a homogenous segments that can understand and relate to one unified marketing message. Through segmentation, companies focus on a bucket or a cluster that is the most likely to purchase its products and thus can yield returns with the least investment.
Positioning – Once the segments that can relate to the product and enjoy its benefits are finalized, the brand must decide on how prospective customers will view the solution they have to offer. Will they come across as an expert prescribing a way out? Or will they be the friend in need who always has the customers’ best interest at heart?
The way a company chooses to position itself dictates how well prospects can relate to the product or service and this in return influences popularity and sales. The analysis done to segment a market always gives insights into buyer motivations and thus the positioning angles that may work.
The 4Ps of Marketing – Marketing Mix or the 4 Ps is the body of actions and strategies pertaining to factors like product, place, price and promotion that a brand leverages to successfully position its offer in a way that resonates with buyers and boosts revenue.
The 4Ps of Marketing for Disney:
There is a reason why I have chosen to go with Disney which has an interesting mix of products and experiences. The 4 Ps are often accused of being commodity centric.
But they apply equally well to apparent service sectors like Family Entertainment Centers (FECs) and Disney has done remarkably well for itself emerging as one of the most valuable brands in the world.
The Disney product mix is interesting. From its sprawling entertainment centers in America, Europe and Asia to the movies it regularly produces to action figures and toys, each and every item and experience addresses the customer’s pain point of boredom and creates value by making users “happier”.
Disney’s pricing strategy takes a number of things into account:
It rewards loyalty. So the more you extend the duration of your visit or the more toys and physical products you purchase the more substantial are the discounts you get to enjoy.
It knows how delightful its customer experience (Physical Evidence) is. So the prices automatically encourage longer stays and more frequent interactions to drive home the magic of the Disney touch.
Where physical products are concerned, Disney uses both its personal stores like Disney World as well as other quality outlets like Walmart to maximize reach and visibility. For its entertainment centers, it has chosen areas that are close to famous tourist destinations to attract local as well as visiting traffic.
Disney has a beautifully comprehensive promotional strategy. It leverages:
Television through its Disney Channel
Social through its Facebook, YouTube and Twitter handles
Print media through flyers, custom credit cards emblazoned with its favorite characters and branded tickets
Billboards and hoardings
The number of factors that a successful marketing blueprint should consider may keep increasing. After all the way the world does business has changed completely. But the 4Ps of Product-Price-Place-Promotion are evergreen. And mastering them still serves companies well.