The 4 Ps of marketing are used to fill in and create the marketing mix. This is an important part of the strategic marketing plan . A marketing mix gives direction to the marketing strategy of a company. Every part is equally important to make the entire strategy succeed. In order to create the marketing mix, you have to carry out extensive market research. You can do this by discovering the wishes and needs of the target group. Then you fill in the 4 P’s of marketing to respond to the target group and market. This model can be filled in for example:
- Offering services
- Selling products
Below is explained how you can create and fill in the marketing mix. This can be useful for your thesis and marketing plan. In addition, there are some examples, so you get a clear picture of the 4 P’s of marketing.
What is the marketing mix (why do you make the 4 P’s)?
The marketing mix is used to describe the marketing policy of an organization. With this strategy, you can play the target group and market. By forming the right strategy you can achieve the sales goals. To make this model you need to carry out extensive research. These analyzes are an important input for the marketing mix. Some analyzes are:
- Internal analysis
- External analysis
The marketing mix is generally made in the implementation plan. This is a plan in which you indicate in concrete terms which actions a company must take to achieve the objectives. Organizations generally call this an action plan. Students from the study of Commercial Economics , for example, call this an implementation plan. This is a compulsory part of a thesis.
The marketing model was developed by McCarthy in 1960. Since the four marketing tools all start with a ‘p’ it is also called the 4Ps. Changing one of the instruments can have consequences for the other three Ps. All 4P’s of marketing are in connection with each other and that is why an adjustment in some cases can result in a completely new marketing mix. The maketing mix consists of:
- Product
- price
- Place
- Promotion
Components of the marketing mix (4 P’s of marketing)
The marketing mix consists of 4 parts which must be completed. This can only be done after extensive research, in which you have charted the market and target group. This can be done with the DESTEP model , for example. Below you can see which parts of the marketing mix exist with a brief explanation. In the next section, we will go deeper into completing this marketing model for your thesis or research.
Product
In this section, besides the product itself, the aspects that add value for the buyer are mentioned. This is, for example, the packaging, quality, service, warranty, brand name and product design. The P of Product is probably the most important part of the marketing mix. The product must meet the wishes and needs of the customer to make it as attractive as possible.
price
This is about how much is requested by the organization for the product or service. Think not only of the selling price, but also, for example, the cost price or discounts that are offered. There are various pricing strategies that a company can use for its producers or services. We will discuss this later in this blog.
Place
This marketing tool describes how the product or service reaches the customer. This concerns which channels and how many channels are used. In marketing terms, this is also known as the ‘distribution channels’. Brands such as Gucci and Prada use a selective distribution policy.
Promotion
Attention is paid to how the product or service is promoted. Here is described which promotional tools are used and why this is done by the organization. Examples can be:
- Mass communication (internet, radio, television)
- Direct marketing (personal sales over the phone for example)
The disadvantage of direct marketing is that it generally takes a lot of time and money to be able to approach everyone. Many companies therefore also opt for mass communication. Thanks to the arrival of the internet, the promotion possibilities are endless. SMEs can easily promote their services or products through advertising through the attractive costs. This can be done, for example, on social media (Facebook and Instagram).
How do you fill in the marketing mix? (example of the 4 P’s of marketing)
In the marketing mix, each marketing tool is described separately below. Examples of components that are described are shown below.
1. Product
The P stands for product in the marketing mix. This indicates both a product and a service. The matrix makes no distinction in this. For example, a product is a telephone and a bicycle. Examples of services are, for example, website makers and insurers.
When you apply the marketing mix for a service, you can use the 6Ps instead of the traditional 4Ps. For a service you can add the following components to the marketing mix:
- Process
- Staff
Product levels for the product or service
When a product or service is examined, various product levels can be looked at. These are a total of 3 different levels which can be entered in the marketing mix for the P of product. These three levels are the parts of the product. According to Philip Kotler there are three product levels to describe, namely:
1. Core product
The core product is the function of the product. With a drilling machine, the core product offers the possibility to make holes in a wall. You can see it as the solution to a problem. A drilling machine solves the problem, for making holes in walls. In short, the core product is what is not tangible.
2. Tangible product
The tangible product is about the product itself. These are the properties and functions of the product or service. In addition, the packaging, design, quality and brand name also belong to the tangible product. Below an example of soft drink giant Coca Cola:
- Function: sweet refreshing thirst quencher for everyone
- Quality: taste guarantee and consistent quality (always the same taste)
- Brand name: Good sounding name and easy to remember
- Design: packaging is recognizable with an innovative log
3. Extensive product
The extensive product includes all the extras that are offered, such as the service, guarantee and for example home delivery or installation of the product. These are all the advantages that are offered when purchasing the product or service.
For this reason, organizations often offer a long warranty period or favorable payment terms. You can think of ‘paying afterwards’ at many web shops. For example, Coolblue offers a free installation when purchasing washing machines or clothes dryers. Companies often use the ‘extended product’ in the marketing mix to distinguish themselves from the competition on the market.
2. Price
The P stands for price in the marketing mix. With this marketing tool, the sales price of the product or service is of course described. In addition, attention can also be paid to other price-related aspects of a product. Marketers also describe this component as the ‘price policy’. Consideration is given among other things to the price in relation to the target group.
Below are the various pricing strategies that can be considered in the marketing mix. As described above, your focus is not only on the selling price of the product, but also on other factors of the price. You can, for example, think about payment terms and seasonal discounts.
The asking price of the product or service
Besides mentioning the asking price, it is also interesting to know how consumers or how the target group looks at this price. They find it a good price in relation to the product or not. Various questions you can ask yourself are:
- What is the price we want to ask for the product or service?
- Is the target group willing to pay a high price?
- Do we use discounts for regular customers, for example?
- What is the price segment in which we want to profile ourselves?
- Do we do temporary actions?
- Which payment options do we use?
Cost
price Calculating the cost price is important to calculate when a product or service can become profitable. Costs that can be described are variable costs and constant costs. In short, you calculate how much it costs to develop the product or perform the service.
Discounts
Discounts can have an effect on the turnover of a company. It is possible that by means of discounts there will be more sales of a certain product. This can also have an adverse effect. After all, you get fluctuations in the demand of the product. The target group waits until the company gives a discount again, as a result of which they do not spontaneously buy the product. Albert Heijn is an example of a company that regularly offers discounts. They regularly work with temporary actions and price reductions of products.
Below are the various discounts that can be offered.
1. Seasonal discount
This is offered to better distribute the sale of season-sensitive products throughout the year.
2. Quantity discount
A quantity discount is given on large orders. The discount percentage increases as more is purchased.
3. Payment discount.
This discount is given when a payment is paid in cash or within a certain period.
Price
strategy The pricing strategy is an important part of the product or service. In this section you can indicate how you want to use the price in the market. You can choose from a variety of pricing strategies, but this often depends on which image the product or service should receive. Below are two important pricing strategies that can be used:
Skimming strategy
The product or service is placed on the market at a high price. This strategy is also often used to recover the costs of a product in a quick way. In most cases, the price will drop when there is more competition on the market.
Companies can also use this strategy to show exclusivity to the target group. There are products and services that consumers buy when it has a high price. You can think of exclusive brands like Chanel and Gucci.
Penetration price strategy
The Penetration Price Strategy is the opposite of the skimming strategy. Here, a product or service is put on the market for a very low price. This is done to create brand awareness and quickly gain a large market share. This can also work very well to convince doubting buyers.
3. Place (distribution)
The P stands for the marketing mix. This part of this model provides answers to the connections between the product and the end customer. In short, the entire distribution of the product. You can use the following question:
- In which way does the service or the product come to the customer?
A company can use various strategies regarding the distribution policy. First of all, it must be checked how a product is put on the market. You can choose between, for example, ‘intensive distribution’ or ‘limited distribution’.
1. Intensive distribution
Intensive distribution means that the product is available in many places. The consumer comes into contact with the product in many stores. You can think of sweets (Haribo), shampoo (Andrelon) and soft drinks (Coca-Cola).
2. Limited distribution
If you decide to use a limited distribution strategy you can choose from the following options:
- Selective distribution
- Exclusive distribution
Selective distribution
In a selective distribution, a certain brand chooses the sales points. This can be done on the basis of a number of (quality) criteria. This is often done by brand products such as clothing and photo cameras. Only companies that meet certain criteria may be eligible to include the brand in the assortment. You can think of the quality of the staff and reputation of the store.
The advantage of this is that not every store can simply include the product in the assortment. For the brand, this can be a good strategy to protect the image of its products. They can thus develop a better brand image.
Exclusive distribution
With limited distribution you can ensure that the product becomes exclusive through exclusive distribution. This means that the product is available at only one or a limited number of sales outlets in a specific geographical area. In general, this strategy is used for products with a higher investment. You can think of an exclusive car or clothing brand.
In an exclusive distribution there is generally one point of sale in a large area. With a selective distribution, a brand chooses a relatively small number of sales outlets.
Distribution
channels In addition to the aforementioned distribution strategies, consideration must also be given to the way in which the product or service reaches the customer. A part that needs to be described here is the distribution channel in the marketing mix. There are different types of distribution channels. These are described below.
1. Direct channel
In this case there are no intermediate links, the product or service is delivered directly from the products to the consumer.
2. Indirect channels
In indirect channels there are intermediaries. The products end up with the consumer through multiple links. A channel can be longer by using, for example:
- Agents
- Wholesalers
Below are several distribution channels. Below are both direct and indirect channels depicted.
4. Promotion
The P stands for promotion in the marketing mix. This is also called marketing communication. In this section you describe the marketing activities that the company uses to reach the target group. Strengthening the image is also part of this. In the promotion policy you process in which way and with which message the target group is approached.
There are many ways in which promotion can be made for a product or brand. In the promotion policy you clearly indicate which means you will influence the target group. The different types of promo strategies that distinguish Marketingscriptie.nl include:
- Advertising (television, internet, and newspaper)
- Public Relations (working on a good image through sponsoring, for example)
- Sales promotion (discount, savings actions and free samples)
- Personal sales (face-to-face, by telephone or via a chat session)