I mentioned the 4 Ps of marketing or the marketing mix in several other posts, but today I wanted to go into more depth and show how the 4 Ps provide a framework to help you beat your competition. If the concept is new to you, the link above provides a great discussion of each element of the marketing mix, along with strategies related to each of the 4 Ps.
If you ever took a marketing class or read a marketing book, the image above containing the 4 Ps of marketing should look familiar. This framework underpins the organization of most textbooks because it encapsulates the definition of marketing (or maybe the relationships are reversed, but you get the idea).
Here’s the definition of marketing so you can compare the 2 concepts from the American Marketing Association:
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
Of course, as with almost everything in science, including social sciences, not everyone agrees on the 4 Ps of marketing as the correct construction of the marketing mix. Another version involves 7 Ps, as depicted in the image below, and there are many other versions. I even created a somewhat unique marketing mix model I called the SACK model comprised of solutions, alignment, community, and kommunication (OK, I fudged that one a little). If this sounds interesting, read the post to see how I developed this model.
The history of the 4 Ps of marketing
Whichever version of the marketing mix you prefer, the most important element is to recognize that promotion (advertising, PR, and social media) all fit within 1 element of that mix. Granted promotion is an important element of the marketing mix, it’s critical you recognize the contribution of the other elements to your market performance. Moreover, creating a seamless mix of all the marketing elements involved in meeting and exceeding customer expectations drives consumer preference for your brand over competitors as well as encourages them to become repeat customers who share their positive attitudes with others to encourage them to purchase your brand.
The product age
Arguably, the product age started first but when you consider marketing, the product orientation prevalent in the infancy of marketing, pre-1920. doesn’t really capture the current notions of product. Product orientation then primarily dealt with making products profitably rather than the products themselves.
In those days, companies focused on producing as much product as cheaply as possible, using price as a primary differentiator between brands.
Today, price is the VERY LAST factor you should consider in differentiating your product. More about this later.
The image below, while focusing on wine, shows the evolution over time in marketing concepts from the product orientation to a market orientation.
Product strategies changed in the later years of the 20th and early 21st centuries as technology allowed forms to focus on elements of products that impacted customer satisfaction, such as quality and innovation. With this came the recognition that consumers buy solutions to their problems, they don’t buy products. Thus, if I’m hungry, I buy food and if I feel depressed, I buy something that makes me feel better about myself or the world around me. Hence, solving problems drove product development, rather than engineering.
The advertising (promotion) age
Sure, in the bad old days depicted in TV shows like MadMen and others of that genre, advertising was all that seemed to matter. Craft a catchy jingle, hire an engaging actor, and spend a gazillion dollars on TV and radio spots, and your product is bound to succeed.
Right?
Wrong.
Even in those bad days of marketing, some forward-thinking marketing folks recognized a brand couldn’t fool enough suckers to survive long-term without making them happy with their purchases.
The same is true for folks who think a good salesperson or a great social media presence is all you need.
Market orientation and the 4 Ps of marketing
Customer satisfaction
Marketing is a relatively new social science and it took its early concepts from economics and psychology. Hence, the prevalence of advertising and product orientations that drove early marketing efforts by academics and practitioners. Slowly, marketers developed their own concepts, such as the product lifecycle and the role of customer satisfaction in driving demand, not just price and utility — concepts borrowed from economics.
Customer satisfaction is a function of performance relative to customer expectations. Thus, advertising that promises too much actually reduces customer satisfaction, as do products that don’t solve a customer problem reliably and consistently.
And, marketers recognized the most powerful form of advertising came from the customers themselves. If customers aren’t satisfied with your products as well as the process involved in acquiring and using the product, they tell their friends. Social media provided a platform that amplifies both positive and negative feelings about a product, either helping or hurting your brand. So, satisfying customers became a key element of your marketing.
Building relationships
Prior to the 1970s or so, marketers focused on selling a customer. Period.
After that time, marketers recognized that success hinged on keeping customers and the focus changed to building customer relationships that kept customers coming back over time. Importantly, customer relationships aren’t the same as loyalty, which involves resistance to efforts aimed at encouraging customers to switch brands. Think about your favorite restaurant or shop. Consider how some people always buy either Apple or Andriod phones. Now you get the idea of a customer relationship, which involves familiarity, comfort, predictability, and, maybe, affability.
Customer relationship marketing goes beyond delivering a quality product to involve other elements that comprise the hologram that represents the meaning of a product to a consumer.
Market sensing
Traditionally, market sensing involves collecting marketing intelligence as an ongoing activity central to the business’s future, disseminating this information across functional units and levels of authority within the organization, and analyzing the information to inform future actions by the organization.
A critical aspect of market sensing is the continuous nature of the research, as opposed to traditional market research designed to answer specific questions. Thus, rather than answering a specific question, market sensing involves an orientation toward monitoring what’s going on with customers, especially in terms of what customers value, your competition and the moves you anticipate from them in the future, and innovations in technology to impact the way you do things and the products you might offer.
A good example comes from the dramatic changes wrought by the pandemic. Firms with a continuous program of market sensing recognized the changing value consumers assigned to working out. WIth gyms closed and too much free time on their hands, consumers turned to home gyms and online classes. Companies recognized technological improvements allowed them to offer many classes to members locked inside their homes via Zoom or other meeting technologies while offering classes employing common household items to replace expensive gym equipment. By adopting these changes quickly, some gyms beat out their competition to gain new members who will likely stay beyond the pandemic lockdowns.
Integration among the 4 Ps of marketing
IMC or Integrated marketing communication became an important concept in building a successful marketing strategy a few decades ago. Integrated marketing communication is:
Integrated marketing communications is an approach to promoting a message through multiple strategies that work together and reinforce one another. For example, a company may promote a new logo, slogan, or strategy through multiple media such as print, television, web, and social networks.
Today, businesses must go beyond simply integrating marketing communication to integrating the 4 Ps of marketing. Take a brand like Rolex and you see how every element of the marketing mix fits into a neat package to reinforce the brand.
Product
In terms of product, a Rolex watch looks expensive and offers unique styling to help it stand out from the competition with diamond bevels and other fancy elements. Also, Rolex represents very high quality as seen by the many watches, like the Oyster Perpetual Submariner Date, handed down from one generation to the next.
Rolex watches also feature great technical performance combined with ease of use, two sometimes overlooked elements of product evaluations. This was the genius of Steve Jobs in crafting mediocre products like the iPod, which didn’t perform as well as a similar music player made by Microsoft, or even the early iPhone, which didn’t do a great job at making phone calls. But, his products were intuitive and easily operated without reading the directions.
Price
A Rolex not only looks expensive, but it is, as well. And you don’t see coupon discounts or sales on Rolex watches to cheapen the brand. If you must ask how expensive it is, you probably can’t afford it. As with other quality jewelry, a Rolex watch offers a certain financial security, however, as you can get a good price for one in a pinch and some even increase in value over time; making them a good investment.
Promotion
Promotion at Rolex integrates with other aspects of the product. For instance, check out this Rolex ad below.
The ads employ actors well known and respected in the rarified circles wealthy men (and their market is primarily men and women buying gifts for men) occupy, such as the opera. The ad copy hopes these buyers identify with the actors wearing Rolex watches as busy, highly sought after professionals who are leaders in their fields. Even the source of the ad, Gourmet, has a wealthy reader base compared with other magazines.
Place
You don’t find a Rolex watch at your neighborhood Walmart. You won’t find Rolex watches at your average jewelry store, either. These watches are only available in very selective retail stores where customers buying high-end watches receive the individual attention and high-quality service these wealthy buyers demand.
Some Rolex models, including the steel sports watches, occupy even more rarified retail spaces; their scarcity meaning only certain buyers have this option. If you’re a celebrity (A-list only), a captain of industry, or a high-profile politician, someone might offer to let you buy one of these watches. Even these lucky buyers may wait years for the opportunity to buy one of the highly sought after Rolex models.
Even finding a used Rolex isn’t easy and, unfortunately, the market for counterfeit Rolex watches is massive. If you’re lucky enough to be in the market for a used Rolex, don’t be fooled by individuals or scammy online retailers offering prices too good to believe. Used Rolex watches might cost double the original sales price, or even more. Only buy from reputable dealers and don’t expect any blue light specials on either new or used Rolex watches.
Speaking of counterfeits, the crooks are getting savvier and it’s harder to determine whether the watch you want is real or fake.
Conclusion of the 4 Ps of marketing
Note how every element of the Rolex marketing program fits carefully together to tell a consistent story of a brand with high quality and a high price tag. Traditional economic theory finds this difficult to understand since price should equal the utility a consumer receives from a purchase. Economic theory suggests the higher the pricetag the lower demand for a product, as shown to the left.
But, real-life doesn’t work like that. Instead, products have a non-utilitarian value that makes the price more in line with demand. Sure, Rolex could sell a ton more watches if they were $100 versus the $10,000 price tag many of them carry but they’d also lose money by dropping the price because they can’t make a Rolex for $100. Hence, Rolex earns a higher net income by selling a smaller number of watches at a much higher price. To support that premium price, everything in the 4 Ps of marketing must fit together to create a cohesive image of the brand.
Final thoughts
I hope you enjoyed this discussion of the 4 Ps of marketing. As a marketing professor for the last 25 years, I love showing off some of the basic marketing concepts that sometimes get lost in our current environment where tactics seem more important than the concepts underpinning them. I also love showing how bits and pieces we often do a bad job of integrating into a cohesive theory fit together to ensure your business success.
I’d love to hear your thoughts about the 4 Ps of marketing and whether my discussion raised any questions or generated an “aha” moment for you. Or, if you have questions I didn’t answer or are confused about anything in this discussion, please enter your thoughts in the comments below.
Also, if you’d like to see future posts on a particular topic, just pop those ideas in the comments, as well.
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