Marketing Mix: 4P Model (a.k.a.,"Marketing 101")

In large swaths of the US, the word "marketer" is synonymous with "Business Development," "Sales," or "Advertising."  This is especially true in the SMB (small- and medium-sized business) space, where there is often one person or department wearing all of these hats at once.

At it's purest, the textbook definition is pretty broad.  Stuart & Solomon in Marketing:  Real People, Real Choices define marketing as "the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational changes."  It's big, broad, and deep.

Back in the 1960s a Harvard professor named Neil Borden wrote an article called "The Concept of the Marketing Mix" in a Journal called Science in Marketing.  Soon after, he started sharing the idea in his marketing classes at HBS.  The ideas are simple and straightforward, and the academic marketing community hasn't come up with a better model since.


In short, there are four components that make up the toolbox of the marketer.  How these four components are combined make up the "marketing mix."  Sounds like we're baking a cake, doesn't it?The "4 Ps" of the marketing mix are:

• Product


• Price


• Place


• Promotion

Sometimes it's called "3 Ps and a D, since "place" is really about distribution.  Let's stay with the alliteration and keep it 4 Ps for today.

Product

Product is the actual good or service being sold.  Product includes the characteristics, design, quality, etc.  It also includes the service & after-the-sale follow up.  When the customer buys, product is what the customer is buying.

Price

Price seems simple on the surface, but can take a significant amount of time and energy to get right.  There are two considerations to price:  perception and the supply/demand curve.

First, customers often assign value to an item based on how much it costs.  An expensive item must have higher quality / have more cachet / meet my need better because it's more expensive, right?  Why else would the product be so expensive?

Second, pricing a product takes a little economics and understanding of the supply & demand curve.  Consider this:  a higher-product priced may attract fewer buyers than a lower-priced product, but the revenue (assuming costs are the same) may be greater.  Investopedia has a quick definition that might be helpful here.

Place

"Place" is the P that should be a D.  It refers to the distribution channels of a product.  From a consumer's standpoint, place is where to buy the item.    It includes inventory decisions, supply-chain management, store shelf slotting, and much more.  Optimal placement is when the customer can get the product at the very moment it is needed ("need" is an interesting concept in marketing-speak as well...will have to dig into that in another post).

Promotion

Remember "business development," "sales," and "advertising" from the top of this post?  Well, all three are examples of promotion.  Coupons fall into this category, as well as a lot of public relations work.  A large chunk of the branding work that goes on happens in the Promotion space.

It's not important to get every marketing activity into one of these four buckets.  Instead, it's very helpful to use each of these four lenses to give new perspective.

Let's not forget you, the individual, as well.  You are a product, and you can apply each of these four Ps to yourself as well.

Happy Marketing,

Bryan