Executing a successful marketing campaign starts with understanding the four Ps of marketing: product, place, price, and promotion. Learning how to leverage these components will help you create a comprehensive and effective strategy that brings in customers and increases sales.
Looking for a quick run down on the 4 Ps of marketing? Scroll no further:
- Product is the physical or digital item that you are offering.
- Place deals with the logistics of making the product available to your customers.
- Price determines how much consumers are willing to pay for the product.
- Promotion covers the tactics used to make people aware of your product and convince them to purchase it.
Understanding how these components work together can help you create successful marketing campaigns that bring in more customers and sales. Keep reading to learn more about how these components should fit into your overall marketing strategy.
The 4 Ps of Marketing, Explained
If you haven’t had the marketing mix explained to you in a bit, we’re here to help. The four Ps of marketing are long-standing elements of any advertising campaign or business model. Together, these four key elements work to identify a product that meets the needs of a target audience, get it in front of them in various ways, and generate interest, so they are ready to buy.
The four Ps align with all of the principles of inbound and the buyer’s journey. However, the four Ps of marketing were invented before the internet and were defined with brick-and-mortar stores in mind.
We don’t have to tell you that marketing communications have come a long way since then.
Stores that do really well are placed in heavily trafficked areas. Usually, there’s a sign out front promoting their products. Their prices are based on the needs of their target audience.
Other forms of media came into play over time, allowing for new forms of promotion and different types of advertising approaches. However, the store was still a physical place the consumer had to go, such as a drug store, an appliance store, or an accounting firm. The traditional marketing strategy aimed to entice people to travel to the store and buy a product or sometimes, in the case of services, pick up the phone and make a call.
Now, companies are embracing online marketing and digital migration. These tactics allow customers to easily purchase physical goods and services without talking to people. Businesses also adopt integrated marketing communications to unify their brand’s voice and ensure consistency across all platforms.
This inevitably affects your marketing strategy, but the tenets still apply. Even in the wake of all this change, it’s still incredibly important to understand the key factors that impact the buyer’s journey. This includes how your target audience will purchase from you and how to be relevant to them at the right time.
How customers will learn about your product, where they can purchase it from, how much it’ll cost, and why it's relevant to them still matter — especially with inbound. The definitions of the four Ps of marketing themselves have evolved to encompass the changes caused by technology.
Product: Understand Your Audience and Know Your Offerings
The first of the four Ps of marketing is the product. We don’t have to tell you that the diverse range of product types has dramatically increased over the years. Product marketing traditionally refers to selling physical goods like appliances and beauty products and services like cleaning or consulting. Now, it means more.
The most successful products have changed from almost exclusively physical goods or physical services to online services. Traditional products like makeup and appliances still exist, but you can purchase digital products like apps and software.
Services that used to require an in-person meeting or phone call, like consulting, can now be done virtually. Plus, new virtually-based services exist, like managed and cloud service providers. Today, a successful marketing plan works to incorporate these new services in a way that prioritizes the customer experience above all else.
Technology has also enabled successful products to evolve even after you’ve bought them. The only way to get an improved version of a traditional physical good is to buy the updated version — but products like software can be updated after you’ve purchased them.
You might think that customers will naturally buy your goods instead of a product of inferior quality, but finding success in business today is about more than simply making the best stuff. People won’t buy from you if they don’t know about you.
For starters, knowing who your target audience is a critical first step towards determining what type of product you want to offer, as they are informed by their preferences, their friends, and their budgets. You should understand the needs and wants of your customers before deciding on a particular product or service.
Additionally, it’s important to understand the competition within your industry and ensure that you have products or services that stand out from the rest. Make sure you are aware of any current trends or market changes that could also affect your product offering. Once you have a product pinpointed, you’ll want to get it out in front of the right audience.
Place: Set Prices That Reflect Your Value Proposition
Second in the four Ps of marketing is place. Today, rather than being restricted to a storefront or a location people have physically to go to, most businesses have a website to help expand their “place.”
For example, no one ever walks into New Breed’s offices asking for help on their marketing strategy, and we don’t expect them to. Typically, clients find our website first — perhaps by reading a blog like this one — and spend time on our website before reaching out to our team.
Your physical store is becoming less relevant than online marketing channels from a business standpoint. We can do business with anyone anywhere from our headquarters in Burlington, VT. With online marketing, our only limitations are time zones and language barriers. This expands our target market considerably from what it would have been if we had to meet with all our clients in person. In-person meetings still happen, but they’re less of a necessity and more of a value add.
Physical evidence of your business being replaced by websites is a complete game-changer in how you think about your marketing plan, and it’s impacting businesses that still rely on their physical location too. Consider an industry that will always have a brick-and-mortar spot: restaurants. Restaurants primarily relied on foot traffic and word of mouth to find new customers. Websites have completely changed how they reach their target audience, enable ordering, and provide information like hours of operation.
Think about the past few times you traveled somewhere. I’m willing to bet you searched for the best restaurants in the area at least once. Heck, I’ll even go online and search for the best restaurants in a random place and plan a trip around that. The point is, you may not “purchase” from a faraway restaurant online, but websites have enabled the restaurant industry to attract new customers from a wider range of locations.
Consider another industry that one would think would lean heavily on its physical store to drive sales: luxury products. A luxury brand may believe that customers seeing and feeling their products in person would make all the difference in earning their business. But in reality, consumers’ online experiences influence at least 40% of all luxury purchases. And with online luxury sales expected to triple by 2025, it’s clear that the primary place of business for today’s luxury brands is online.
Select the right distribution channels for each product or service you offer to reach your target market effectively. This includes physical stores, online shopping websites and mobile apps. You also need to ensure that these channels are cost-effective and allow customers to access your products easily.
Analyzing the buying habits of your customers will help you determine which channels are more suitable for them and where they are likely to make purchases. This knowledge can also be used to create targeted marketing campaigns that focus on those specific distribution channels.
Price: Analyze Distribution Channels to Reach Your Target Market
Next up in the four Ps of marketing is price. Prices need to be based on the real and perceived value of a product or service, with competitors' offerings being considered. That hasn’t changed, and traditional pricing and promotional marketing strategies — like punch cards and limited-time discounts — are still used by marketers.
However, one notable pricing change is in the rise of subscription services.
Subscription pricing used to be less prevalent. The traditional marketing concept would have consumers pay for the service they received at the time. Pay for the appliance, and then you own the appliance. Purchase on-premise software on a CD, and then own that software Simple, right? You purchased a product and owned it; you buy a service, like a cleaning service, and they come to your house and clean. Then you pay them, and they leave.
Consultants were the first evolutions of the subscription model where people chose to pay for keeping a consultant on retainer. This formed a subscription to that person, but you would also pay an hourly rate for consulting services.
In the modern-day marketing plan, subscription fees are more widely used. Instead of owning the software, a company sells access to software through a subscription.
Pricing Strategies to Consider
There are also new ways to approach pricing strategy due to the evolution of technology.
Many companies are adapting pricing models that allow people to “try before they buy” through demos, free trials, and freemium models. All three options allow people to use a product and see if it’s a good fit for their business.
Some companies use freemium models and are comfortable having consumers who never pay a dollar for their business but may refer business or end up moving into a new role or company and deciding to purchase because the paid product is more relevant to them now.
SaaS companies have also started to include bulk pricing in their pricing model. Historically, the more of a particular product you purchase, the cheaper the unit price of that product. If you buy organic vegan gummies in bulk from Costco, the price is lower compared to a six-count box from a grocery store. SaaS companies are pricing their products the same way, so customers are enticed to buy more for unit value.
For example, HubSpot’s Marketing Hub has different tiers with different amounts of contacts included. As you increase your tier level, the price per individual contact is less, even though the overall cost of using HubSpot is higher, so you’re getting a better value.
Video hosting platforms operate the same way, but their value proposition is the number of videos you can host. Higher prices and plans include lower per-video costs: it might cost $200 for a plan that allows 20 videos or $850 for a plan that allows 100 videos.
For software where the value offering is the amount of time it's licensed for, bulk pricing might be available in the form of annual prices instead of month-to-month rates. The software might cost $12 a month or $120 for the whole year, offering a lower cost for customers who purchase a larger quantity (in this case, the length of time they’ll use the software).
Setting the right price for each product or service you offer is critical to any marketing plan. You must ensure that you charge customers competitive prices while still giving you the most profit to cover your supply costs and deliver year-over-year growth.
Your pricing must also reflect customers' perceived value in your products or services. It should be determined by factors such as quality, features, customer satisfaction, and how difficult it is to acquire them. Whether this is accomplished through a managerial approach or multi-team effort depends on your business.
Always evaluate your competitors' prices so that they are not too low. Once you have established an effective pricing strategy, you can use methods such as discounts, special offers and loyalty programs to attract more customers to your place of business.
Promotion: Utilize Different Strategies To Maximize Visibility
To close out the four Ps of marketing, we have the promotion. Everything you do for promotion is meant to bring people to your place to purchase from you. While public relations may have been an important department in the past in driving people to your storefront, the times are a changin’.
Your online presence is likely your biggest driver of promotions and buzz in today's digital age.
Traditional distribution channels included flyers, signage, radio and tv ads, magazine and newspaper ads, billboards, and word-of-mouth recommendations that would drive people to your place.
Many of those forms are still utilized today, but digital equivalents and optimized content marketing strategies complement them. Newspapers and magazines have online forms. Social media marketing is like a digital form of word-of-mouth marketing. Banner ads are similar to billboards. And 64% of businesses today use email marketing to reach their customers, signaling a seismic shift away from television commercials and radio spots.
Implement a Strategic Approach to Demand Generation
The modern promotional strategy now works to make it as easy as possible for people to find you online. A promotional marketing strategy includes SEO, email marketing, blogging, partnerships, podcasting, and video — all things that promote your business and everything you have to offer.
Product promotion requires you to use different strategies to ensure maximum visibility. You could get started with traditional marketing methods such as radio, television, and print media, but ultimately, digital marketing should be on your company’s roadmap.
Developing a strong presence on social media can help spread the word about your offers quickly. Email campaigns and online ads can also be used to reach out to potential customers. Data-driven promotional campaigns coupled with proven SEO tactics can help your business rank higher on search engine result pages and, in turn, bring more customers to your business.
People are almost always on a device, whether they’re browsing social media platforms or working through their daily Wordle. If they’re not on a device, they can quickly access one and go online. That means the whole idea of the four Ps of marketing has shifted.
The power is now in the buyer’s control, literally at their fingertips.
This means marketers don’t have to push an offer as they did before. It’s more important to stay relevant so that when buyers plan to make that purchase, they think of you rather than trying to force a product into your target audience’s hands.
We now have access to people 24/7 through interactive digital marketing campaigns and engaging distribution channels. We can have a conversation with someone and get them to think about us through inbound methods like blogging, social media, and emails.
A marketing strategy aims to get your offer in front of your target market at the right time — but the right time is no longer confined to traditional business hours. With the proper strategic marketing plan in place, your customers can purchase whenever they want, so promotions don’t have to be right there in the store. Suffice to say, the four Ps of marketing look a lot different than they did just five years ago.
The in-the-moment criticality isn’t as high as before, which changes the way you think about the four Ps of marketing, but doesn’t eliminate their relevance.
Guido is Head of Product and Growth Strategy for New Breed. He specializes in running in-depth demand generation programs internally while assisting account managers in running them for our clients.