Investopedia / Julie Bang
The four Ps are the key considerations that must be thoughtfully considered and wisely implemented in order to successfully market a product or service. They are product, price, place, and promotion.
The four Ps are often referred to as the marketing mix. They encompass a range of factors that are considered when marketing a product, including what consumers want, how the product or service meets or fails to meet those wants, how the product or service is perceived in the world, how it stands out from the competition, and how the company that produces it interacts with its customers.
Since the four Ps were introduced in the 1950s, more Ps have been identified, including people, process, and physical evidence.
Neil Borden, an advertising professor at Harvard, popularized the idea of the marketing mix—and the concepts that would later be known primarily as the four Ps—in the 1950s. His 1964 article, "The Concept of the Marketing Mix," demonstrated the ways that companies could use advertising tactics to engage their consumers.
Decades later, the concepts that Borden popularized are still being used by companies to advertise their goods and services.
Borden's ideas were developed and refined over a number of years by other key players in the industry. E. Jerome McCarthy, a marketing professor at Michigan State University, refined the concepts in Borden's book and named them the "four Ps" of marketing. McCarthy co-wrote the book Basic Marketing: A Managerial Approach, further popularizing the idea.
At the time the concept was introduced, it helped companies breach the physical barriers that could hamper widespread product adoption. Today, the Internet has helped businesses to overcome some of these barriers.
People, process, and physical evidence are extensions of the original Four Ps and are relevant to current trends in marketing.
Any successful marketing strategy should be revisited from time to time. The marketing mix you create is not intended to be static. It needs to be adjusted and refined as your product grows and your customer base changes.
Creating a marketing campaign starts with an understanding of the product itself. Who needs it, and why? What does it do that no competitor's product can do? Perhaps it's a new thing altogether and is so compelling in its design or function that consumers will have to have it when they see it.
The job of the marketer is to define the product and its qualities and introduce it to the consumer.
Defining the product also is key to its distribution. Marketers need to understand the life cycle of a product, and business executives need to have a plan for dealing with products at every stage of the life cycle.
The type of product also dictates in part how much it will cost, where it should be placed, and how it should be promoted.
Many of the most successful products have been the first in their category. For example, Apple was the first to create a touchscreen smartphone that could play music, browse the Internet, and make phone calls. Apple reported total sales of the iPhone to be $71.6 billion in Q1 2022. In 2021, Apple hit the milestone of 2 billion iPhones sold.
Price is the amount that consumers will be willing to pay for a product. Marketers must link the price to the product's real and perceived value, while also considering supply costs, seasonal discounts, competitors' prices, and retail markup.
In some cases, business decision-makers may raise the price of a product to give it the appearance of luxury or exclusivity. Or, they may lower the price so more consumers will try it.
Marketers also need to determine when and if discounting is appropriate. A discount can draw in more customers, but it can also give the impression that the product is less desirable than it was.
UNIQLO, headquartered in Japan, is a global manufacturer of casual wear. Like its competitors Gap and Zara, UNIQLO creates low-priced, fashion-forward garments for younger buyers.
What makes UNIQLO unique is that its products are innovative and high-quality. It accomplishes this by purchasing fabric in large volumes, continually seeking the highest-quality and lowest-cost materials in the world. The company also directly negotiates with its manufacturers and has built strategic partnerships with innovative Japanese manufacturers.
UNIQLO also outsources its production to partner factories. That gives it the flexibility to change production partners as its needs change.
Finally, the company employs a team of skilled textile artisans that it sends to its partner factories all over the world for quality control. Production managers visit factories once a week to resolve quality problems.
Place is the consideration of where the product should be available, in brick-and-mortar stores and online, and how it will be displayed.
The decision is key: The makers of a luxury cosmetic product would want to be displayed in Sephora and Neiman Marcus, not in Walmart or Family Dollar. The goal of business executives is always to get their products in front of the consumers who are the most likely to buy them.
That means placing a product only in certain stores and getting it displayed to the best advantage.
The term placement also refers to advertising the product in the right media to get the attention of consumers.
For example, the 1995 movie GoldenEye was the 17th installment in the James Bond movie franchise and the first that did not feature an Aston Martin car. Instead, Bond actor Pierce Brosnan got into a BMW Z3. Although the Z3 was not released until months after the film had left theaters, BMW received 9,000 orders for the car the month after the movie opened.
The goal of promotion is to communicate to consumers that they need this product and that it is priced appropriately. Promotion encompasses advertising, public relations, and the overall media strategy for introducing a product.
Marketers tend to tie promotion and placement elements together to reach their core audiences. For example, In the digital age, the "place" and "promotion" factors are as much online as offline. Specifically, where a product appears on a company's web page or social media, as well as which types of search functions will trigger targeted ads for the product.
The Swedish vodka brand Absolut sold only 10,000 cases of its vodka in 1980. By 2000, the company had sold 4.5 million cases, thanks in part to its iconic advertising campaign. The images in the campaign featured the brand's signature bottle styled as a range of surreal images: a bottle with a halo, a bottle made of stone, or a bottle in the shape of the trees standing on a ski slope. To date, the Absolut campaign is one of the longest-running continuous campaigns of all time, from 1981 to 2005.
The four Ps provide a framework on which to build your marketing strategy. Think through each factor. And don't worry when the factors overlap. That's inevitable.
First, analyze the product you will be marketing. What are the characteristics that make it appealing? Consider other similar products that are already on the market. Your product may be tougher, easier to use, more attractive, or longer-lasting. Its ingredients might be environmentally-friendly or naturally sourced. Identify the qualities that will make it appealing to your target consumers.
Think through the appropriate price for the product. It's not simply the cost of production plus a profit margin. You may be positioning it as a premium or luxury product or as a bare-bones lower-priced alternative.
Placement involves identifying the type of store, online and off, that stocks products like yours for consumers like yours.
Promotion can only be considered in the context of your target consumer. The product might be appealing to a hip younger crowd or to upscale professionals or to bargain hunters. Your media strategy needs to reach the right audience with the right message.
Product, price, promotion, and place form the four Ps of the marketing mix. These are the key factors that are involved in introducing a product or service to the public.
The focus on the four Ps—product, price, place, and promotion—has been a core tenet of marketing since the 1950s. Three newer Ps expand the marketing mix for the 21st century.
The model of the 4Ps can be used when you are planning a new product launch, evaluating an existing product, or trying to optimize the sales of an existing product.
A careful analysis of these four factors—product, price, place, and promotion—helps a marketing professional devise a strategy that successfully introduces or reintroduces a product to the public.
The four Ps of marketing—product, price, place, promotion—are often referred to as the marketing mix. These are the key elements involved in planning and marketing a product or service, and they interact significantly with each other. Considering all of these elements is one way to approach a holistic marketing strategy.
Neil Borden. "The Concept of the Marketing Mix."
E. Jerome McCarthy. "Basic Marketing: A Managerial Approach." Richard D. Irwin, Inc., 1960.
Apple. "Condensed Consolidated Statements of Operations (Unaudited) Q1 2022," Page 1.
Apple Insider. "At 2 Billion iPhones Sold, Apple Continues to Redefine What Customers Want."
Harvard Business School: Technology and Operations Management. "UNIQLO: What’s Behind the Low-Cost High-Quality Casual Wear?"
Smart Insights. "Campaign of the Week: The Longest Running Print Ad Marketing Campaign in History."
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Investopedia / Julie Bang