I was a mature student. Supposedly, anyway, as I went back to university at 26. This is kind of like being described as an “elderly” mother for having your first baby over the age of 35. In both cases the label both doesn’t fit, and yet simultaneously does. You find yourself rubbing your knees after buckling the baby seat or envying the wide-eyed excitement of your fellow students on their first trip to the local “alternative” shopping district. It doesn’t prevent you from staying up late partying; it does mean though that your regret is just so much more nuanced and bitter the following day.
I’m pretty sure that was the kind of day I was having when I was introduced to the concept of the Marketing Mix in the first year of my business degree. Our lecturer explained to us about the four P’s – Product, Price, Place and Promotion. In a moment of clarity, I immediately knew this was going to be one of those concepts where in an exam you can remember three items straight away, then spend twenty minutes trying to recall the last one. Persistence? Perception? Prepayments and accruals?…. Nope, wrong subject.
The four Ps concept was apparently created by a chap called E. Jerome McCarthy in the 1960s. Given that name, I assume maybe he didn’t also create the idea of re-branding, though then again I suppose it depends on what the E may have stood for. No one can argue with the success of the four Ps however which, as per my experience, seem to be considered ‘Marketing 101’ when studying business. There were also 4 C’s and apparently another 3 P’s you can take into account. How much alliteration can one person take after a night out?
The first P is Product. I remember doing a first year project where we had to discuss how companies should be marketing-led, so identify a need and then develop a product to meet that need. In practice that works up to a point. If you own a factory that makes boxes, identifying a need for a new social network isn’t going to help you much. But identifying what sizes of boxes people like, what colours they prefer, and how strong they expect them to be will definitely help.
The next P is Price. Do people want to buy a higher quality box for a higher price, or a cheaper version that still does the job they need it for? How much does it cost you to make the box, and what profit margin is needed to make it worthwhile? Also, how much do people actually expect to pay? Not always as little as possible. Sometimes a price that’s too low can send off the wrong signals about quality. If looking for a branded, luxury product to give as a gift, you will expect to pay more. But pricing too high will obviously put people off. To justify a higher price, your product needs quality features that set it apart, whereas if it’s similar to many others that are available it can be more difficult to justify. Whatever price level is best for your product, it also needs to cover not only the cost of making it, but also the cost of sale. Which brings us to….
Promotion. People can only buy things they know about. They have to be told about what products are available, and why they might choose one over another. So you advertise your product, and also spend money defining your brand, to create a sense of familiarity, trust and quality. To entice people to try your product for the first time, or stock up on it, you might provide special offers or price promotions. To clear excess unpopular items, you might have a sale. Media advertising, leaflets, direct mail and a beautiful shop window, all with their own pros and cons. These are relatively easy to grasp methods that have been used for decades.
In more recent years, promotion online has become increasingly important, in line with the importance of the internet in people’s daily lives and habits. This can be less intuitive, and feel more complicated, especially for those of us who remember when internet access was new and exciting, rather than routine and everyday. The range of possibilities and options available, across social media marketing, search engine marketing and email marketing, make it easier than ever to spend quite a lot of money on advertising, but not get very much back in return. So it’s important to also invest time researching or seek expert advice to make sure that spend is targeted precisely to get the best results. Online promotion is not an area where just throwing some money in will work.
The day I was ruefully massaging my aching head, adrift in a sea of clear-eyed, perky teenagers, the lecturer’s discussion of Place as the final element of the marketing mix only touched on the internet. Place was primarily about physical store locations, deciding where was a good place to locate your shop given how many people and who might be walking past. If you wanted to sell remotely, paper catalogues were needed and perhaps a network of agents to help distribute products. The internet hasn’t automatically replaced older elements, but what it has done is add a new dimension to what Place means. Often people will visit a physical store, or recieve a paper catalogue but then head to buy online. Or they may look at products online before heading to a store to make their final selection. Agents remain popular, often because they promote within their own personal networks both on and offline.
This complexity can make it difficult to identify exactly which elements are most important for each particular business. People all have their individual preferences for how they like to shop, and different types of product can further vary those preferences. Online, a customer can see images of what the product looks like, but they can’t smell it, or feel the texture and weight. However, there is a general expectation now that a shop will have a website, and not doing so can have indirect impacts. Not having a good online presence can give the impression of lack of success, which in turn can create unfair perceptions of service or quality. So it’s about more than simply the potential additional sales that can be made online.
All in all, the four P’s continue to be central to marketing today. The elements almost seem like common sense, but the framework the concept provides makes us consider each in a structured way, so that important considerations are less likely to be missed. The one big difference that’s arisen over the last twenty years is how much more complex the options are since the internet became an important channel for sales. This brings huge opportunities, but also the need for understanding and advice to make the most of them.