The 4 Ps of marketing
The 4 Ps of marketing—product, price, place and promotion—serve as a basic framework for assessing and adjusting your marketing strategy, and have long been thought of as the core of a marketing plan.
But over the years, marketers have added three new Ps to better analyze marketing efforts. These new Ps include people, positioning and packaging. Together, all of these components form the 7 Ps of marketing and work in concert to help businesses reach their target markets and achieve their sales objectives.
What is the marketing mix?
The 7 Ps—product, price, place, promotion, people, positioning and packaging—are known as the marketing mix.
These are the elements a company uses to differentiate itself from its competition. There is a strong interdependency between the 7 Ps; they tend to overlap and influence one another. Businesses regularly use, review and measure them—and would be well advised not to neglect any of them, even if they choose to emphasize one element over the others.
What are the 4 Ps of marketing?
Your product is obviously key to your business. To market it properly, you need a clear grasp of what makes it unique and why people need it. That entails understanding who your competitors are and which customers make up your target market.
The first question to ask yourself, each time you review your marketing, is whether your product is still relevant. If not, then you will need to evolve it or pivot to produce something else.
Assess your product from various angles and ensure you’re clear on the following characteristics:
- Potential add-ons
Companies are increasingly adapting their products for online sales and, in the case of service companies, online delivery. Customers are increasingly shopping online; rethinking your products or services to ensure they remain relevant should be a priority.
Availability is an important aspect of your product that can affect how you market it. Having erratic or slow access to your product or the parts you need to make it can lead to postponed launches and lost sales. This is problematic because the speed at which businesses get new or existing products into the market is one of the keys to success.
That means if you can find an innovative way to get your product to market more quickly, through innovative manufacturing or operations, for example, you’ll gain a competitive advantage, says Patrick Grenier, a Senior Business Advisor with BDC.
Price has always been a central influence on marketing strategy: it can make or break your product launch.
To determine price, you need to know how potential customers value your product and what your competitors’ products and pricing strategies are. Your price should be consistent with your promotional messages, packaging, and the types of stores your product sells in.
As you raise your price, your profitability will go up—but only to a point. If you raise it too much, customers will lose interest, and profitability will drop.
Consider the pros and cons of pricing strategies like:
- Cost-plus pricing—determining the selling price by adding a specific fixed percentage to its unit cost
- Competitive pricing—adjusting your price based on what your competitors are doing
- Price skimming—starting with a high price, then reducing it as customer volume increases
- Value-based pricing—basing your price on how much you think customers will be willing to pay for the product or service
- Penetration pricing—starting with a low price to build your customer base (but read up on the risks, like unreasonable customer expectations and price wars with competitors)
Pricing decisions can affect your customer relationships. For example, price volatility has become a preoccupation for many businesses and customers. In a market hampered by supply chain issues and product shortages, available products can sell for higher prices, yet many consumers are not prepared (or cannot afford) to pay them.
Recognize that consumers can be smart shoppers with long memories. When economies stabilize, some consumers will remember all too well which businesses took part in price gouging. Consider the impact to your brand.
Marketing has always been about putting the right product out in the right place and at the right time. How and where will you provide your product to customers? What placement strategies or sales channels will you use?
Think about things like:
- where customers are likely to search for your product
- whether they are more likely to look in physical stores or online
- where your competitors sell their products and how you can differentiate yours
- whether you have (or can establish) access to the right distribution channels
During the pandemic, many companies that once operated solely in person switched to operating online (or added an online presence) to cope with potential mandated business closures and cautious shoppers.
But Grenier isn’t convinced the era of brick-and-mortar stores is over. In fact, he suggests that rather than disappearing, these physical spaces are likely to be reinvented to improve the customer experience. For some businesses, the result may be a hybrid model that makes the most of both the online and in-person customer journeys.
If you’re looking to revamp your appeal, consider improving your physical space to attract and impress customers.
Promotion is about the tactics you use to reach potential customers and distinguish your product from others.
It can take the form of traditional advertising (such as TV and radio commercials, billboards, and bench or newspaper ads), in-person sales, public relations and events, social media and email marketing, product markdowns (think “buy one, get one free” sales) and more.
The promotional tactics that are best for your business will depend on the other components of your marketing plan (such as product, price, place, target market), and may be constrained by your marketing budget. Use the insights from your plan to ensure your promotional activities align with your business goals and customers’ interests. Some tried-and-true options include:
- blogs, how-to articles, videos, newsletters and other online materials
- signs and banners on your buildings and vehicles
- news releases to attract media coverage
- employee ambassadors
Grenier believes a highly effective form of publicity today is the use of influencers—personalities with large social media followings. Businesses are increasingly using this approach because younger generations rely on social media platforms—such as TikTok, Instagram and YouTube—for product advice from people they trust.
Businesses like this method because it’s:
- cost-effective—many influencers are paid based on results
- less risky—businesses can use multiple influencers instead of having just one “face” for their brand
- authentic—by offering honest reviews, so influencers build trust with their followers
Grenier notes that influence-led advertising is not like conventional advertising. "It must feel authentic, or it will hurt your credibility,” he says.
An important caveat concerning promotion: make sure you don’t heavily promote a product that’s tied up in the supply chain; wait until it’s available.
The 7 Ps of marketing (The three new Ps)
The people who participate in your sales process are extremely important. Whether it be in a remote or face-to-face meeting, they need to be competent and credible. They need to have something that they’re prepared to say and to make customers feel welcomed. Employees can be your most important brand ambassadors.
“If the people who interact with customers don’t smile and show they care, it will negatively affect the brand,” Grenier says.
An added complication is labour shortages. Having no customer-facing talent is just as challenging as having the wrong talent: both will hurt your customer service.
Investing in your employees will help with retention, says Grenier. More than ever, they need to feel valued.
Many employees are grateful for socialization opportunities at work. Hosting seasonal events is a great way to boost morale and help your employees bring their best selves to work.
Positioning is the practice of marketing your product’s value proposition to your target market and relative to your competitors.
For many purchases, it begins the moment someone searches for your product online. First, are you showing up in their online search at all? Are you targeting the right keywords for your industry and product? Then, if a potential client finds 10 companies marketing a similar product, why should they buy yours? Your positioning should make that clear.
Most shopping journeys today begin on the Internet, and only continue into physical spaces if the online experience has been successful. Your website needs to be intuitive, pleasant and glitch-free to convert leads into customers.
Positive online reviews are another major asset. Increasingly, an ad is not going to be enough to make up someone’s mind. Consumers are looking for firsthand accounts of other people’s experiences with a product. These can include reviews by influencers.
Making a good first impression is as important as ever, whether that’s through your product’s packaging, the look and feel of your website, or how you and your employees present yourselves in front of a camera.
“If I’m in my living room during a video conference and there are construction workers with ladders and I’m looking all askew, people are going to wonder whether I’m really a professional,” says Grenier. “Employees are an important part of your packaging when you work remotely.”
A professional brand that’s uniform across all your communications will assure clients that they can trust you, says Grenier. “There’s a strong chance that they’ll buy from you instead of from your competitor.”
“It’s the same thing with your website,” he adds. “If it still looks like it was made in 1999, forget it; you’re out.”
In terms of the aesthetic—for example, when deciding if you want bold and bright packaging or something more subtle and minimalist—trends change from year to year. They can also be influenced by the product you’re selling and the mood you’re trying to create. But it’s worth putting in the effort to distinguish yourself from competitors, says Grenier.
Sustainability is also increasingly coming into play with packaging. Consumers are expressing their worry about the environment, challenging companies not only to make their packaging attractive and cost-effective, but also environmentally friendly.
“Environmentally conscious customers will choose a different product if they think yours is not sustainable,” says Grenier.
Putting it all together: The 7 Ps in action
The 7 Ps of marketing—product, price, place, promotion, people, positioning and packaging—are meant to work together.
Grenier offers the example of vertical farming, where crops are grown in vertically stacked layers in controlled environments. Vertical farms can produce, for example, oranges, which don’t normally grow in Canada. In this instance, place improves both product and price thanks to reduced transportation costs. It also influences promotion because of the opportunity to say the fruit is fresh and local—it didn’t spend weeks on a truck getting here. There may also be different, more appealing packaging options because of the reduced need for shipping.
A marketing plan will take all these different elements and put them together as a coherent whole.
Thinking through the 7 Ps can help you decide on an overall marketing approach that considers pricing and revenue models. You can also use the 7 Ps to set goals, assess risks and opportunities, conduct competitive analyses, and decide on the specific marketing strategies you will use and steps you will take.
Finally, don’t forget to review your 7 Ps throughout the year to see which of those important Ps may need adjusting.
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