There are many possible ways to satisfy the needs of target customers. A product can have many different features and quality levels. Service levels can be adjusted. The package can be of various sizes, colors, or materials. The brand name and warranty can be changed. Various advertising media – newspapers, magazines, radio, television, billboards – may be used. A company’s own sales force or other sales specialists can be used. Different prices can be charged. Price discounts may be given, and so on. With so many possible variables, is there any way to help organize all these decisions and simplify the selection of marketing mixes? The answer is yes.
It is useful to reduce all the variables in the marketing mix to four basic ones: Product, Place, Promotion, and Price. And it helps to think of these four major parts as the "four Ps."
Some marketing managers assume that the customer is part of the marketing mix – but this is not so. The customer should be the "target" of all marketing efforts. Each of the four Ps is described below:
1. Product. The Product area is concerned with developing the right "product" for the target market. This offering may involve a physical good, a service, or a blend of both. Keep in mind that Product is not limited to "physical goods." For example, the Product of H & R Block is a completed tax form. The product of a political party is the set of causes it will work to achieve. The important thing to remember is that your good and/or service should satisfy some customers’ needs.
2. Place. Place is concerned with all the decisions involved in getting the "right" product to the target market’s Place. A product isn’t much good to a customer if it isn’t available when and where it’s wanted. A product reaches customers through a channel of dsitribution. (A channel of distribution is any series of firms – or individuals – from producer to final user or consumer.) Sometimes a channel system is quite short. It may run directly from a producer to a final user or consumer. This is especially common in business markets and in the marketing of services. Often the system is more complex – involving many different kinds of middlemen and specialists. And if a marketing manager has several different target markets, several different channels of distribution might be needed.
3. Promotion. The third P – Promotion – is concerned with telling the target market about the "right" product. Promotion includes personal selling, mass selling, and sales promotion. It is the marketing manager’s job to blend these methods. Personal selling involves direct communication between sellers and potential customers. Personal selling usually happens face-to-face, but sometimes the communication occurs over the telephone. Personal selling lets the salesperson adapt the firm’s marketing mix to each potential customer.
Mass selling is communicating with large numbers of customers at the same time. The main form of mass selling is advertising – any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. Publicity – any unpaid form of nonpersonal presentation of ideas, goods, or services – is another important form of mass selling.
Sales promotion refers to those promotion activities – other than advertising, publicity, and personal selling – that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve use of coupons, point-of-purchase materials, samples, signs, catalogs, novelties, and circulars.
4. Price. In addition to developing the right Product, Place, and Promotion, marketing managers must also decide the right Price. In setting a price, they must consider the kind of competition in the target market – and the cost of the whole marketing mix. They must also try to estimate customer reaction to possible prices. Besides this, they also must know current practices as to markups, discounts, and other terms of sale. Further, they must be aware of legal restrictions on pricing.
All four Ps are needed in a marketing mix. In fact, they should all be tied together. But is any one more important than the others? Generally speaking, the answer is no – all contribute to one whole. When a marketing mix is being developed, all (final) decisions about the Ps should be made at the same time.