A company’s marketing mix is the combination of products, pricing, places and promotions it uses to differentiate itself from the competition. These four elements are commonly referred to as the “four Ps.” There is strong dependency between each of the Ps.
- Product—A product or service made by a company to meet a customer need. Generally speaking, the better it meets that need, the more the company can charge for it.
- Pricing—Pricing is based on how much it costs to make, market, distribute and sell a product, and on the profit margin the company would like to achieve. When a product is strongly differentiated, a company can price it higher than competitors’ products without losing market share.
- Place—Refers to all the ways customers search for, choose, buy and use a company’s products or services. Companies need to consider these “places,” which may be physical or online, when developing their marketing plan.
- Promotion—What many people think of when they hear the word “marketing.” It refers to the overall campaign of communications used to sell a product. This activity often includes advertising, sales promotion, in-person sales, public relations, social media marketing, email marketing, search engine optimization (SEO), video marketing and more.
A company with more than one market segment may have a different mix for each segment, with a separate budget assigned to each one.