What Are the 4 Ps?
The four Ps of marketing are the key factors that are involved in the marketing of a good or service. They are the product, price, place, and promotion of a good or service. Often referred to as the marketing mix, the four Ps are constrained by internal and external factors in the overall business environment, and they interact significantly with one another.
The 4 Ps are used by companies to identify some key factors for their business, including what consumers want from them, how their product or service meets or fails to meet those needs, how their product or service is perceived in the world, how they stand out from their competitors, and how they interact with their customers.
The four Ps are the four essential factors involved in marketing a good or service to the public.
These are the four Ps: the product (the good or service), the price (what the consumer pays), the place (the location where a product is marketed), and promotion (the advertising).
The concept of the four Ps has been around since the 1950s; as the marketing industry has evolved, the concepts of people, process, and physical evidence have become important components of marketing a product, too.
Understanding the 4 Ps
Neil Borden popularized the idea of the marketing mix—and the concepts that would later be known primarily as the four Ps—in the 1950s. Borden was an advertising professor at Harvard University. His 1964 article titled "The Concept of the Marketing Mix" demonstrated the ways that companies could use advertising tactics to engage their consumers. Decades later, the concepts that Borden popularized are still being used by companies to advertise their goods and services.
When they were first introduced, Borden's ideas were very influential in the business world and were developed and refined over a number of years by other key players in the industry. It was actually E. Jerome McCarthy, a marketing professor at Michigan State University, who refined the concepts in Borden's book and created the idea of the "4 Ps," a term that is still used today. In 1960, McCarthy co-wrote the book "Basic Marketing: A Managerial Approach," further popularizing the idea of the 4 Ps.
At the time the concept was first coined, the marketing mix helped companies account for the physical barriers that prevented widespread product adoption. Today, the Internet has helped businesses achieve a greater level of integration between businesses and consumers, and also to overcome some of these barriers. People, process, and physical evidence are extensions of the original 4 Ps, and are more relevant to the current trends in marketing.
How the Four Ps Work
Product refers to a good or service that a company offers to customers. Ideally, a product should fulfill an existing consumer demand. Or a product may be so compelling that consumers believe they need to have it and it creates a new demand. To be successful, marketers need to understand the life cycle of a product, and business executives need to have a plan for dealing with products at every stage of their life cycle. The type of product also partially dictates how much businesses can charge for it, where they should place it, and how they should promote it in the marketplace.
Many of the most successful products have been the first in their category. For example, Apple was the first to create a touchscreen smartphone that could play music, browse the Internet, and make phone calls. As of November 2018, Apple stopped providing public sales figures for the iPhone. However, as of November 1, 2018, total sales of the iPhone equaled $2.2 billion. Apple revealed that it had sold its one billionth iOS device on November 22, 2014. And in 2018, the company announced they were approaching selling their two billionth iOS device.12
Price is the cost consumers pay for a product. Marketers must link the price to the product's real and perceived value, but they also must consider supply costs, seasonal discounts, and competitors' prices. In some cases, business executives may raise the price to give the product the appearance of being a luxury. Alternatively, they may lower the price so more consumers can try the product.
Marketers also need to determine when and if discounting is appropriate. A discount can sometimes draw in more customers, but it can also give the impression that the product is less exclusive or less of a luxury compared to when it is was priced higher.
UNIQLO, headquartered in Japan, is a clothing manufacturer of global casual wear. Like its competitors—other famous causal wear brands such as Gap and Zara—UNIQLO creates low-price, daily-use garments.
What makes UNIQLO unique is that it creates innovative, high-quality products. It is able to accomplish this by procuring its fabric from its material manufacturer partners, securing stable, high-quality materials at low cost by ordering in large volumes, and continuously seeking the highest-quality and lowest-cost material in the world. The company also directly negotiates with its manufacturers and has built strategic partnerships with high-quality and innovative Japanese manufacturers.
UNIQLO also outsources its production to partner factories; because it doesn't own its own factories, it has the flexibility to change production partners if the best production location changes over time. Finally, the company employs a team of skilled textile artisans that it sends to its partner factories all over the world for quality control. In addition, production managers visit factories once a week to resolve quality problems.3
When a company makes decisions regarding place, they are trying to determine where they should sell a product and how to deliver the product to the market. The goal of business executives is always to get their products in front of the consumers that are the most likely to buy them.
In some cases, this may refer to placing a product in certain stores, but it also refers to the product's placement on a specific store's display. In some cases, placement may refer to the act of including a product on television shows, in films, or on web pages in order to garner attention for the product.
The 1995 movie GoldenEye was the seventeenth installment in the James Bond movie franchise. It was the first Bond movie not to feature an Aston Martin car. Instead, the British actor Pierce Brosnan got into a Z3 by BMW. Although the Z3 was not released until months after the film had left theaters, BMW received 9,000 orders for the car the month after the movie opened.4
Promotion includes advertising, public relations, and promotional strategy. The goal of promoting a product is to reveal to consumers why they need it and why they should pay a certain price for it.
Marketers tend to tie promotion and placement elements together so they can reach their core audiences. For example, In the digital age, the "place" and "promotion" factors are as much online as they are offline. Specifically, where a product appears on a company's web page or social media, as well as which types of search functions trigger corresponding, targeted ads for the product.
The Swedish vodka brand Absolut sold only 10,000 cases of its vodka in 1980. But by 2000, the company had sold 4.5 million cases, thanks in part to its iconic advertising campaign. The images in the campaign featured the brand's signature bottle styled as a range of surreal images: a bottle with a halo, the bottle made of stone, or as the outline of trees on a ski slope. To date, this Absolut advertising campaign is one of the longest-running continuous ad campaigns of all time, from 1981 to 2005.