Right product in the Right place for the Right price at the Right time. You would have heard of this phrase. This is used by marketers and academicians alike & has emanated from the 4 P’s of marketing model.
Don’t you want to learn one of the most relevant models in marketing?
Iam sure you would want to
The 4 P’s of marketing model is one of the most relevant and widely accepted frameworks in marketing today.it was first proposed in 1960 by E. Jerome McCarthy. This Model has stood the test of time to become one of basic models for academic as well as industry marketers to start with. There has been other models like 8 Ps & 4 Cs which has been developed on top of this model
4 P’s of Marketing -Marketing Mix
4 P’s of marketing is also called the marketing mix
What is the marketing Mix?
The marketing mix has been defined as the “set of marketing tools that the firm uses to pursue its marketing objectives in the target market“.
In simple words
It is a marketing tool that combines a number of components in order to strengthen a product’s brand and helps to sell the product or service. Basically it’s a set of 4 decisions that need to be taken before launching any product. These 4 Variables become the basic building blocks for the strategic decisions which will help in selling the product.
So what are these basic building blocks 4 Ps?
Basically these are of 4 types
- Product – What is the company manufacturing?
- Price – What is the pricing strategy of the company?
- Place – Where is the company selling?
- Promotions – How company promotes its products?
Now let’s understand each of these in detail
Any business needs to have a product to start with & So this is first variable in 4 P’s of marketing .Product is basically an item that satisfies customer’s needs or wants.it can be tangible in the form of goods or intangible in the form of services. In an ideal scenario, a product need to meet a certain consumer demand, or must be so compelling that consumers believe they need it. There are certain product decisions that need to be taken before making any marketing plan
- What are features of your product?
- What would be the quality of your product?
- How the product features are different from the market?
- What will be the product range, product mix & product line?
- How will you package the product?
- What is the USP of the product?
- Whether the product will be branded as sub brand or completely new?
- What are the secondary products which can be sold along with primary (Warranty, services)
- Is there a return for product & how they will be managed?
- How will you deal with product in each stage of the product life cycle?
Based on these questions several decisions need to be made. These decisions will also affect other variables of the mix.
For Example: – if you decide to launch a high quality chocolate then basis the product all the other variables will get impacted
But if you find out that the product you want is not fitting into overall marketing mix, then you need to rework on the product so that it fits in the mix
Once you have an understanding of the product, price comes into the mix. Price is the amount customer pays or is willing to pay for the product. Major consideration in pricing is the costing of the product, the advertising and marketing expenses, any price fluctuations in the market, distribution costs etc. Another important factor is the competition pricing. All of these change dynamically & hence pricing would need to factor the same. Also Pricing would affect the targeting & positioning of the product. Also sales promotions would need a different strategy in form of discounts. Below are some of decisions that you would need to make here
What is the current price in market for same product?
Is customer willing to pay a premium if more features can be added?
What is the cost & margin allowances in pricing structure to make desired margin?
What are the margins for distributors, retailers at different levels in distribution channel?
What are the payment terms for the product?
Place refers to the place where customer gets access to your product. This is basically the distribution channel of the product. There are a lot of decisions that need to be taken here
How wide you want the product to be distributed?
Is it a product that need to be in select stores?
How fast should material reach customer?
What should be inventory level?
How will material be transported?
Which channel will distribute your product to the customer?
Do you want to deliver product yourself or you want to franchise?
What is the ideal lot size of packets that trade needs in case of FMCG products?
Distribution does affect the profitability to great extent .In case of a telecom company dealing with paper recharges, an increase in transport cost will bring in drastic changes in profitability. Hence a vital logistics & supply chain is a must to ensure optimal distribution & correct pricing
Now that we have got right product at right price in the right place, it’s time to promote the product to the customer
This P in the marketing mix includes the complete integrated marketing communications which in turn includes ATL , BTL advertising, sales promotions and digital media advertising. This P is dependent on the Ps of product and pricing . There are lot of decisions that needs to be taken here
What is the message that needs to be communicated?
What is the right media mix that needs to be taken up?
How much frequency should communication go to reach the target audience?
What is the budget for marketing communication?
What stage the product is in?
This P in the 4 P’s of marketing model also decide the segmentation & positioning of the product. The right mix of promotions affect Other 3 Ps –product, place and price. Ideally if promotions are successful in positively impacting the brand equity of the brand then you may be be able to subsequently able to increase the price of the brand. Promotions is also considered an operational cost & will affect the costing of the product
Relevance of 4P’s of marketing to the digital Age
We are living in the digital age now. Mobile phones are continuously become a part of our lives & brands need to adapt to this new way of life. Let’s understand how 4Ps become relevant to the digital age
Product:-With more and more sales happening through digital space. Customer does not see the actual product before the purchase. This makes it harder for him to ascertain if he has made the right purchase
This makes it much tougher for brands. Customer can easily check out reviews of the product on web or check in social media about the same. A bad quality product will mean customer taking to social media with bad reviews or reviewing your product in review websites. Hence quality of product becomes more important in this digital age
Price:-Pricing still continues to be a major buying decision for most customers. Digital media does allow tracking of buying behaviour & hence personalised offers can be generated for the customer. Various cuts of customer Segmentation is possible due to the wide variety of data available. This allows dynamic pricing as per past buying pattern. Customers who are seen as close to buying in the funnel can be given coupons which will result in instant sales.
Place:-With this new digital media, Place has also become an important piece in the customer purchase decision process. Supply chain & logistics play an important role as they will affect the final customer experience & will play a vital part in the pricing
Promotion:-Promotion perhaps has changed the most in the 4Ps of marketing. Traditionally products have been promoted primarily through ATL communication using Radio, TV, print, and outdoor advertising. FSIs (or Free Standing Inserts) were also used heavily in consumer package goods to introduce new products and commonly provide coupons inside of their weekly newspaper. While coupons could be tracked at the register/point-of-purchase, other advertising such as TV and radio were more increasing brand awareness and pushing customer towards action.
In contrast, the majority of digital marketing today is measurable and driven by analytics, behaviour tracking and other ROI (Return on Investment) measures. These mean marketer is today more in control as he can test and optimize the marketing mix versus making a huge Media buy for TV/radio for which he may not have effective control.