A firm’s 4P marketing mix – key decisions regarding how a firm will position the product relative to those of competitors – is a critical part of a firm’s business strategy. However, a firm’s business strategy is broader than this external market-focused perspective. This article explores how the 4Ps connects with other key strategic decisions a firm needs to take.
What are the 4Ps: Product, Place, Price, and Promotion?
The 4Ps Marketing Mix is a fundamental framework within marketing: key decisions that firms need to take into account to effectively sell their product. The framework structures key marketing decisions in four categories – the product, place, price, and promotion decisions. Key considerations in these categories include:
- Product: What are the features of the product? Why are customers using it? What uniquely differentiates your product from those of the competitors?
- Place: What distribution channels will you use to sell the product? How are these different from those of your competitors? Will you manage these stores yourself, or rely on third-party distributors?
- Price: What price can you charge for your product? What value does it bring to the customers? What are competitors charging?
- Promotion: How will you create brand awareness for the product? What channels will you use to get your message out? What discounts will you offer on items? What approach are your competitors taking when promoting their product?
Connecting the 4Ps with your strategy
The 4Ps framework is an important way of analyzing key external environments of the firm – taking into account not only your positioning but also that of your competitors. One of the key emphasis of the 4Ps is identifying an attractive proposition to customers, different from those of competitors. This is key a key part of strategy – by identifying a different market space (or creating one with a ‘blue ocean strategy) the firm can attempt to separate itself from head-to-head competition.
However, it is also important to consider a firm’s internal resources and capabilities – the tangible and intangible parts of the company that are critical to implementation. While the 4Ps analysis is largely external focused, your ability to implement this approach is inherently dependent on your internal capabilities. Developing a high-end, differentiated approach will never be successful if the firm fundamentally lacks the ability to deliver on this positioning. Likewise, a cost-leadership approach will be impossible to implement if the firm’s resources are not aligned around this objective.
Essentially, there should be alignment between the internal competencies of the firm, and its market position. Unless the 4P’s Marketing Mix is consistent with the firm’s broader strategy, with consistent decisions being made within the firm and resource choices, successfully delivering on the 4P position will be impacted.
Can other firms imitate your market positioning: Examining your internal resources?
Considering the internal capabilities of the firm is also critical to determine whether other firms will be able to imitate your market positioning. While the 4P framework is useful in identifying a niche that you can target, with consideration for how your offering will be unique from competitors, it is hard to determine from a solely market focus the extent to which competitors will be able to reposition themselves.
Fundamental differences between your resource choices and those of your competitors can make it hard for competitors to reposition themselves to enter your market space. If for example your ability to offer specific product features is underpinned by a unique technology within the firm, it can be difficult for competitors to imitate your offerings. Similarly, if you have achieved a low-cost market position by making different strategic choices to eliminate costs from your operations, it can be hard for competitors to imitate this positioning.
The more unique and difficult to imitate your underlying resources are, the more likely you can sustain that market position without competitors being able to directly erode away your advantage.
Summary: Integrating the 4Ps in your strategy
The 4Ps should not be thought of as independent of your strategy, but a key component that needs to be aligned with your broader business decisions. While it is important to consider the Product, its Price, the Place it will be sold, and how it will be Promoted, it is also critical to consider the internal resources of the company that make this positioning feasible.
Ultimately these resources will both influence the ability of the firm to successfully establish this market position and continue to meet the created customer expectations, and also whether the firm is able to maintain its positioning without competitors responding and encroaching on the firm’s offerings.