If you ever read a marketing book or took a marketing class, I would bet money they brought up the “4 P’s of marketing”: Place, Price, Product, and Promotion. It may seem trivial, but this is exactly how marketing works. These four things work in perfect relation with each other. When one is wrong, the whole mix comes crashing down. You should use this mix to acquire your goal, engaging your target market. Target market is everything. Don’t you dare say ‘oh everyone is my target market’. No, they are not. But target market is another blog post!
When people ask me what I do and I tell them I’m a marketer, 9 times out of 10 they get a glossy look in their eyes. “So like sales?” NO! NOT SALES! Ahem sorry. Now comes the struggle of trying to explain what I do. I always just tell them that marketers take a product and decide how it looks, where its sold, how its sold, and at what cost. “So sales then?” AHHHHHHHHHHHH!
What is the point of that story? The easiest way to explain marketing and how it works is with the 4 P’s of marketing.
This may seem like a no brainer. Is $10,000 luxury jewelry going to sell better a Kay’s Jeweler or a Walmart? Of course, Kay’s jeweler will be the best but sometimes it’s not so black and white. For example, you’re selling a new type of backpack designed for cross-country skiers. You think Walmart is a great place, it has a large outdoor section and tons of people shop there! I’m going to be rich!
Nay nay I say. Think about it more deeply. I’m selling a very niche product. Are passionate cross country skiers buying their gear at Walmart’s, or at specialty stores? Walmart appeals to bargain shoppers, is my price competitive in a Walmart? Or in a Dick’s Sporting Goods?
A good example of this is the legendary Levi’s Jeans trying to sell high end suits. Check out the amazing 30min documentary here. They planned everything, the perfect price, the right promotional advertising, an amazing product, but neglected one major factor: place. The key demographic they were targeting would never set foot in a location that sold Levi’s products. They had a great product, but the consumer just couldn’t find it. I highly recommend this video to help illustrate how important good marketing is.
Going back to our cross-country backpack example, let’s talk about pricing. When entering a new market, determining your price level can make or break your product. Do you charge less and undercut the competition but at the risk of looking cheap? Do you charge more and lose potential sales but look like a high quality/luxury product?
This goes into the world of behavior economics. In his book Predictably Irrational (which I highly recommend), Dan Ariely conducted an experiment looking at how price influences our expectations. Does a $.50 pill aspirin work better than a $.02 aspirin? To your surprise, people found that the more expensive pill worked better. This is because of the placebo effect.
Knowing that, this makes pricing even more difficult. I could go on for pages about pricing methods, but for this guide I’ll tell you to come up with your preferred pricing methods in relation to the other 3 P’s, that is what this whole article is about right?
This is ground zero for most businesses. You wouldn’t be asking yourself these questions if you didn’t already have a product (or service). The important thing to remember here is why. Why should anyone buy your product? How is it better? If it’s better, then make sure you use price, promotion, and place to make it clear that it’s better. How will your customers know it’s better?
Too often do marketing mixes fail because the product wasn’t good enough. Again, the thing to remember is your marketing will only succeed if all your P’s are in place.
This piece of the marketing mix is the biggest pet peeve of mine. Nothing drives me more crazy as a marketer as misplaced and misused promotion; mainly because promotion is often so outrageously expensive.
It is super important to keep your target market in mind when choosing your vehicle for promotion. Going back to our backpacks, you decide to buy a television commercial slot at 1:30pm. “Holy cow” you’re thinking. “So many people are going to see my ad!” While you are technically right, you couldn’t be more wrong.
Yes, your ad is going to be view, a lot, but the important question is who is viewing. Do you think the adventurous, outdoorsmen risking their health to cross vast freezing wastelands are watching television at 1:30 in the afternoon? Probably not. Another example would be you’re selling a hip new accessory to teenagers, would you put an ad in the newspaper? Because we both know how much teenagers read the paper! This P ties in pretty close with Place.
The extra P’s
While these P’s matter to products just as much a service. These additional P’s recent additions to the old tried and true 4 P’s focused more on services.
When selling services, it is very important to remember the people involved. You could be selling a great service but the person providing it is a total psychopath, your business might not get return business.
The delivery of your product or service. Think of how Chipotle or Chick-fil-a have mastered their processes. They can handle huge loads of customers and still provide excellent service. Compare that to how most fast food companies crack as soon as things get busy.
Even a service like insurance has physical evidence, like your proof of insurance. If these left over physical elements of your service aren’t great, they could leave negative lasting impressions with customers.
The 4 P’s of marketing are the foundation of any marketing campaign. If any of your P’s are wrong, the entire process will fail. So think carefully. It starts with a great product or service; without that there’s nothing to promote! The price and the place determines how your potential customers respond with purchasing decisions. Promotion drives them to your the product or service being offered. Get all your P’s right and success for your business is right around the corner.