by Ron Kurtus (revised 23 August 2012)
Although marketing is commonly thought of as only consisting of promoting a product or service through advertising and publicity, there is actually much more to it. Marketing is the process of establishing a product, pricing it, promoting the product and placing it for sale, as a way to make profits for the company. These items are often called the Four-Ps or the marketing mix.
Although, it is an easy way to remember the parts of marketing, it misses out on the three phases of marketing.
Questions you may have include:
- Why is promotion often emphasized?
- What are the Four-Ps?
- What are the pros and cons of the Four-Ps?
This lesson will answer those questions.
Most think only of promotion
The general public normally thinks of marketing as promotion, advertising, branding and publicity of products or services. They often lump those items together as promotion.
What they do not realize is that there are other factors that a business must consider as part of delivering their products or services to the market and selling them.
Marketing can be classified into four categories, called the Four-Ps:
These activities are also called the marketing mix. They are the variables that marketing managers can control in order to satisfy customers in the target market.
Using four words starting in "P" is an easy way to remember the items.
The product part of the marketing mix concerns determining what products or services customers want and establishing specifications for those items. Considerations include functionality, appearance and quality of the product, as well as packaging, warranty and support.
Setting a competitive price for a product or service is an important part of marketing. That price may be based on the marketing strategy of whether to give the impression of quality or to appeal to the price-conscious buyers. Supply and demand also affects pricing.
Pricing includes not only the list price, but also discounts, financing and leasing options.
The promotion part of the marketing mix concerns communicating and selling to potential customers. This includes advertising, sales promotion, publicity and personal selling. It refers to the various methods of promoting the product, brand or company, as well as the message and media to be used.
Advertising and promotion costs can be a large part of the product price. Analysis should be performed to determine the actual value of the promotion in getting new customers.
Place is the location or channel where the sale can be made. This may include geographic location and market segment. Sometimes this "P" stands for placement or distribution, which refers to how the product or service gets to the customer.
Distribution includes market coverage, channel member selection, logistics and levels of service.
Pros and cons of Four-P system
There are advantages or using the four-P concept, although it is better to include them within the three phases of marketing.
The advantage of using this marketing mix of products, pricing, promotion and place is that it is easy to remember and provides a good organization of marketing.
There are other combinations of the factors in marketing, but the Four-P classification has been the most useful is sticking in the minds of marketing students. In other words, the expression has become a "brand" for marketing.
However, the four-P mix does not address the actual steps taken in marketing:
- Definition phase
- Preparation phase
- Sales phase
The preparation phase of marketing consists of establishing the product to sell, price to charge and place to sell the product.
Then during the sales phase of marketing, the promotion and advertising is done.
Marketing is commonly thought of as only consisting of promoting a product or service through advertising and publicity. Actually, marketing consists of the process of establishing a product, pricing it, promoting the product, and placing it for sale, as a way to make profits for the business.
These items are called the Four-Ps, and they are an easy way to remember the factors of marketing. However, they should fit within the Three Phases of Marketing.
Go beyond the obvious
Resources and references
The following are some resources on this topic.
(Notice: The School for Champions may earn commissions from book purchases)
The Portable MBA in Marketing by Charles D. Schewe and Alexander Hiam - Covers most of marketing topics taught in MBA programs
Questions and comments
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