The most famous framework for remembering all the marketing tactics that you have at your disposal is called the 4P’s: Product, Price Promotion and Place.
Start with Strategy
Marketing strategy is mainly about answering those three all-important marketing questions: “Who are my customers?”, “What do they value?” and “How can I give them what they value better than the competition?”
The way we answer those questions is through the process of segmentation and targeting and positioning and also by fully accounting for the various sources of value that customers and companies can get from an interaction.
These are all strategic concerns and as I mentioned at the beginning of the course this strategy must come first, but once you have your strategy you must then successfully implement it.
You can use some marketing tactics to implement your marketing strategy. The most famous framework for remembering all the marketing tactics that you have at your disposal is called the 4P’s: Product, Price Promotion and Place.
Product refers to the offering itself, and explains what are the attributes of your product or service. In this context product also includes things like branding, packaging and warranties. Price is pretty straightforward, but in the 4P’s price would also include things like temporary discounts, sales, coupons.
Price can also include non-monetary costs to the consumer, things like time energy and attention. If your customer has to travel some distance in order to buy your product that would be considered a cost to the customer.
Promotion refers to all non-price ways of incentivizing purchase. This would include advertising, sponsorships salespeople. Finally, place is distribution. How does the product get to the customer? Where can the customer by the offering? This can include virtual places like websites.
The 4P’s were developed as a tactical framework by marketing professor Edmund McCarthy way back in 1960 and it served marketers well since then. Yet this discussion should start with two words of warning about the 4P’s.
First, because of its popularity in history some people have come to treat the 4P’s as if they encompass everything you need to know about how to solve marketing problems. This is simply not true.
Remember, the 4P’s is a tactical framework, you need a strategy before you can hope to implement the 4P’s well. If you ever find yourself in a meeting where you’re discussing a new product launch and someone starts off the conversation by asking “so how should we price this?”, “how should we design this product?” or “how would you promote this?”.
You need to pound your fist on the table and say “no, this shall not stand don’t you dare invoke the 4P’s before we know who our customers are and what they value”. Sure, it’s a little dramatic but it gets the point across. Strategy always comes first. That’s very important.
The second danger in using the 4P’s is remembering that this framework also includes everything behind those for P words. A framework like this is useful because it reminds you of all the different decisions that need to be made in order for an offering to be successful.
That means if you’re going to use the 4P’s correctly it’s not enough just to remember what those P’s stand for. You must also remember all the non-Ps that are included in those four broad categories of product price, promotion and place.
For example you must remember that product includes services and branding, promotions includes all the different ways you can communicate with your customers. If you don’t remember all those individual decisions that need to be made the framework hasn’t done you actually any good.
The Marketing Mix
For these reasons a slightly expanded tactical model based on the marketing mix framework developed by Alexander Chernev in his book Strategic Marketing Management might be useful.
This framework includes seven basic classes of decisions that marketers must make about the offering or selling: product, service, brand, price promotions, communication, and distribution. Taken together we refer to these seven variables as the marketing mix.
There’s obviously quite a bit of overlap between the 4P’s and the marketing mix
that’s okay, in fact it’s intentional. The advantage of a somewhat expanded list of marketing mix variables is that
- we won’t accidentally forget anything important like say branding and
- were not pigeonholed into using words that start with P instead of more accurate more descriptive more intuitive words that start with another letter like distribution, instead of place.
Taken together these two variables are most descriptive of the offering itself what it is were trying to sell.