The 4Ps Marketing Mix is one of the most influential frameworks in marketing – a way of characterizing key choices on how you are going to market your product. If you are launching a new product or analyzing the offerings of your competitors, it is critical to understand the product, the place it will be available, the price, and how it will be promoted.
Product: The item or service that you are selling
When marketing your product, one of the most important areas to examine is the product itself. Ultimately, this is what the customer is buying, and it is important to understand how your product compares with others that are available.
What are the features of the product?
One way of understanding products is to consider the features of the product. Some important features to consider include:
- Performance dimensions: How fast it goes, how long it lasts.
- Visual dimensions: What does it look like, what are the colors, what is the finish.
- Customization options: Can it be adjusted to meet the specific desires of the customer.
- Durability: How does performance change over time, how long is the product likely to last.
- Support: Beyond the physical product itself, how do you provide aftersales support to the item.
Why are customers using it?
Beyond the objective features of the product, there are likely to be specific reasons why customers are using your item. Understanding purchasing reasons may highlight which features are the most important to them (and potentially which are least influential at driving purchase decisions).
You may also discover some unanticipated reasons that are influencing purchasing decisions. Sometimes the reasons why customers opt for a particular product extend beyond the most apparent product features.
What is unique about your product?
As well as considering your specific product, it is important to analyze how it compares relative to the offerings of competitors. Identify specific features that differentiate your offering from those of other firms. Having unique features on dimensions that customers care about, provides specific reasons for choosing your offering over those of your competitors. Without unique features, you risk customers being able to easily switch to alternative companies.
Price: What you will charge for the product
What price can you charge for your product?
The price of your product or service will have significant consequences, not only to the total sales that you can expect to gain from the product, but also your profit margin and ultimate profit from the line. Striking a balance between a competitive price, that customers can justify is worth it for your product, while still having an acceptable profit margin can be a difficult task, requiring an understanding both of the value that customers will gain from your product, and also the value proposition of your competitors’ products.
What value does it bring to the customers?
To determine a price it is first important to understand the value derived from the product itself. Having a detailed understanding of your product – and the specific benefits that customers derive from using it – can help to determine their willingness to pay (essentially the maximum amount that they would be willing to pay for your product).
Determining a customer’s willingness to pay can be a difficult process. For some products – those which save the customer money – it may be possible to quantify. If for example, your product reduces waste in the client’s production line, you may be able to ascertain the value that the customer derives is the total money saved. If on the other hand, you are selling more of an experience, determining the benefit is more of a judgment, varying between individuals and harder to precisely quantify.
What are competitors charging?
Finally, it is important to consider the price that competitors are charging. While there may be additional features or specific reasons for customers to purchase your product, it is always important to consider whether the additional value that you bring is worth the premium price (or conversely, whether you have an appropriate discount relative to more premium offerings).
Place: Where the product will be available
What distribution channels will you use to sell the product?
One of the key decisions with selling your product is the distribution channel that it will be sold via. This can include both the chains of stores that you will sell into, as well as any direct to customer approaches that you have for selling online.
It is important to consider not only the total sales that you can achieve through each sales channel but also the margins that you will have. Retail chains that buy in large quantities may have significant power to squeeze your profits – large sales may be great, but if your margins are zero or negative, then gaining the sales channel may not be the big win that you were hoping for.
Where will the product be placed in the distribution channel?
Beyond the actual stores that your product will be sold, it is also important to consider the prominence of the product within these sales channels. Getting your product in more viewed store locations can make a big difference in terms of its visibility and ultimately sales.
How are these different from those of your competitors?
As with other dimensions, it is important to consider how your distribution approach will be different from competitors. Ensuring that your product is available in all the channels that competing products are is a mixed blessing: on the one hand, it provides opportunities to draw customers away from competitors’ offerings, but it also provides opportunities for customers to directly compare your product with the alternatives on the market.
While there may be key channels that are important for you to be present in (potentially going head to head with a competitors brand), it can also be useful to think broader about whether there are alternative paths to market – potentially ones that competitors are not directly exploring – that you can examine. Finding a new untapped sales channel can open the door to sales, without the customer being presented with multiple competing alternatives fighting for their attention.
Promotion: How you will drive sales
The final “P” – promotion – relates to how you will drive awareness in your product. Having the best product, at a great price, in a desirable sales channel are necessary components of marketing success, but unless you are able to drive customers to make the purchases, you ultimately won’t see the payoff.
How will you create brand awareness for the product?
One of the key parts of promotion is considering how you are going to create awareness, and then convert that awareness into sales. There are numerous different channels for creating brand awareness, including:
- Social media marketing: Using business social media accounts to generate awareness and drive sales
- Word of mouth: Whether you are able to drive sales through individuals discussing your products with their friends, colleagues, and on-line
- Paid advertising: This may include both on-line advertising (including, search ads, display advertising, or promoted social media campaigns), as well as offline advertising, such as newspaper or TV ads.
- In-store displays: Providing promotional material to stores that are selling your products
Some forms of advertising may be free (beyond the time required to manage the campaigns) – others may involve substantial financial commitments. It is critical to consider the payback that you are likely to receive from the advertising (and to monitor its success). It is easy to spend a lot of money on advertising, and without careful attention, you may not receive a positive return from the investment that you put in.
What discounts will you offer on items?
Discounting can be a key component in the sales approach, potentially helping to attract new customers, creating interest in your products and services, and driving sales in slow periods of the year. Depending on your industry, a large percentage of your product may be sold at a discount, and if this is the case, it is important to be aware of the impact that this may have on your profit margins.
What approach are your competitors taking when promoting their product?
A final consideration of promotion is to examine how your competitors are promoting their products. Similar to other components of analyzing competitors’ offerings, it is important to examine how competing products are being advertised and discounted – such actions may necessitate either similar actions on your firm’s behalf, or attempts to compete in different dimensions and step away from direct head to head positioning.
Final thoughts: It is important to connect your 4P marketing mix with your strategy
While considering your 4P marketing mix is important, it is likewise important to consider how your marketing approach connects with your strategy. How you market your product is just one component of your overall strategy, and it is important to ensure consistency between the resources and capabilities that underpin your firm and how you position the products in the marketplace.
This article explores how the 4Ps -product, place, price and promotion – connects in with other key strategic decisions a firm needs to take.
This article explores the role of promotions within the 4P marketing mix – including the purpose of promotions and different ways of promoting your product or service.
This article considers the role of the 4P Marketing Mix framework, including how it can help align various components of your marketing approach.
This article explores approaches to increase the amount that customers are willing to pay for goods – from advertisements to improvements to the products.
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This article explores the importance of word of mouth advertising and ways of encouraging your customers to share their experiences with others.
Cost leadership is one of the primary bases for competing. By focusing on reducing the cost of your operations, you can charge a lower price for your goods or services, and in turn capture the most cost-conscious customers.