The four Ps of marketing—product, price, place, and promotion—serve as a framework for marketing success. Sometimes referred to as the marketing mix, the four Ps help guide businesses in the creation of winning business ideas that deliver what customers want, where, and how they want it at a most appealing price.
Building a solid marketing plan structured around the four Ps can help you increase awareness for your brand and its products or services, drive sales and achieve overall stronger bottom-line results.
What Are the Four Ps of Marketing?
The idea of a marketing mix was first popularized in the 1950s by Neil Bordon, a Professor of Advertising at Harvard. Drawing from Bordon’s work along with the work of other prominent marketing and business leaders, E. Jerome McCarthy introduced the four Ps of marketing in his book Basic Marketing: A Managerial Approach.
You may recall from your Intro to Marketing college course that product, price, place, and promotion are the four Ps of marketing. While the four Ps have been around for decades, the concept is just as relevant to businesses today as it was when the four Ps were first introduced.
The First P: Product
The first P in the four Ps of marketing is the product. A product can come in a variety of forms, such as a physical product, digital product, service, event, or experience. The product is the actual item you are selling; the features or attributes you include or build into your products can help you differentiate your offerings from your competitors.
There are many dimensions that you must consider when deciding which products to develop and sell. Does your product solve a problem? Or does the product fulfill consumers’ wants and desires? Why would someone want to buy it? Product quality, design, packaging, variety, adaptability, sustainability, safety, and production must all be considered.
Your marketing plan should outline the key features of your product, what makes it unique, and who your target audience is for that product. This will help ensure you meet the needs and desires of your ideal audience.
The Second P: Price
The second P in the four Ps of marketing is price. Naturally, you need to price your products in a way that allows you to operate profitably. However, pricing is far more complex than calculating the cost of goods and adding on an additional amount that will let you meet your desired profit margin. How you price a product will convey its relative value and quality.
Walmart uses low-cost pricing to attract a broad audience of value-driven shoppers, while Saks Fifth Avenue sustains much higher prices, which is common among luxury goods sellers who target wealthy buyers. If you decide to serve different types of customers, you’ll need to develop a customer segmentation strategy, which will include pricing strategies for each segment you serve.
There’s also a psychological factor in product pricing, which is why products are often priced at $9.99 rather than $10. Products with prices ending in .99 seem cheaper than those that end in zero, and hence more shoppers are drawn to the $9.99 price tag.
The Third P: Place
The third P in the four Ps of marketing is place, which refers to the channels or locations where you sell your products and services.
You may want to sell products via a brick-and-mortar store or at less permanent physical locations, such as special events, fairs, pop-ups or temporary markets. Or, you may prefer to list your products for sale via an e-commerce platform—by either building your own e-commerce website or by selling through popular online marketplaces such as eBay, Amazon or Etsy.
Where you sell your products will influence how you manage product inventory and product transportation or shipping. The location also influences the relative size of your reachable market. Some businesses find they can optimize sales by offering goods and services via multiple outlets.
The Fourth P: Promotion
The fourth P in the four Ps of marketing is promotion, which is how you get the word out about your products and what tactics you use to convert prospects into buyers. Your promotion strategy may include advertising, public relations, social media marketing, content marketing, direct marketing, and influencer marketing, as well as the discounts and special offers you extend to generate sales.
Even the best product in the world doesn’t stand a chance if you don’t have a strong promotion strategy behind it. While some promotional tactics can be done on a shoestring budget—such as do-it-yourself blogging and social media—others can be costly. It’s important to factor anticipated promotional costs into your product pricing strategy.
Examples of the Four Ps in Marketing
Understanding the four Ps is the first step in creating a strong marketing mix. Knowing how to execute the four Ps correctly is key to achieving success. Let’s look at examples of how different organizations use the four Ps in different ways.
Examples of Product
The music industry offers many examples of how related products are sold in different formats––from physical products to digital downloads to digital streaming to live events.
While compact discs—a physical product—are no longer the norm, they are still available in some brick-and-mortar locations as well as in online marketplaces. Vinyl albums are making a comeback among certain audiophiles, which is a reminder to consider your audience’s specific interests when designing your product.
The popularity of various product formats can change as new technologies emerge. There was a time when you needed an Apple iPod or similar device (i.e., “product”) to listen to music online. Now you can use just about any internet-enabled device to purchase music via digital downloads, or you can subscribe to popular subscription-based audio streaming sites such as Spotify, Pandora, and Apple Music, which grant you access to millions of songs.
Live performances are another popular music product—just ask any Taylor Swift mega-fan about the magic of scoring a ticket to one of her sold-out concerts. Of course, when you attend a live event, you will find there is plenty of physical music merchandise to purchase—from T-shirts to pins to caps and hats to collectible programs.
Examples of Price
You can buy a watch for under $100 or spend $100,000 or more; both watches will tell you the time. The price a person is willing to pay for a watch says a lot about their means, interests, style and quality preferences, and what they value in a timepiece.
Chanel, Dolce & Gabbana, Versace, and Armani all sell high-priced clothes, jewelry, and accessories. Yet, what these brands are selling is a luxurious lifestyle. The premium prices these luxury brands charge reflect quality and exclusivity; their target audience has the means to purchase the products and the desire to live a rich life.
Old Navy, meanwhile, targets budget-conscious shoppers with its everyday modest prices and regular promotional discounts. Dollar Tree is an example of a brand that appeals to lower-income consumers and those seeking extreme values. Dollar Tree, which has had to raise average product prices from $1.00 to $1.25, has seen profits surge in recent years.
No one magic price range will produce exceptional results for all product lines. When pricing your product, you must consider not only the cost to produce the item but who your ideal buyer is and what they’re currently spending on the products they purchase.
Examples of Place
Today’s businesses have more options and flexibility in places to sell their goods and services. The best point-of-sale (POS) systems and credit card readers let you accept payments from nearly anywhere.
You used to need a brick-and-mortar building to open a restaurant, and now budding restaurateurs and bakers can sell their edible creations via food trucks, pop-up events, or shared kitchens.
Artists and crafters can sell their goods via their galleries or display their works at others’ galleries. Artists also sell art online via their own websites or popular online marketplaces such as Creative Market, Etsy, Amazon Handmade, and Fine Art America. Art and craft fairs are growing more popular, as are festivals and pop-up markets that invite artisans to showcase their work.
Many businesses start by selling their products online or via a retail location and then expand to other outlets once sales grow. A multi-location strategy is often the best way to boost your product sales.
Examples of Promotion
If you want your business to be successful, you must find ways to promote your business effectively. Some promotional efforts—such as national paid advertising—require a relatively large promotional budget, which is feasible for mega-brands like McDonald’s, Amazon, and Toyota, but can be difficult for smaller businesses.
Examples of promotions that work for small businesses include creating a business website where you offer discount coupons and promote current sales. You can also ask customers for their email addresses and use email marketing software for ongoing business promotion. If you have a brick-and-mortar business, consider placing attention-grabbing banners, flags or a blow-up character in front of your business to draw the attention of those passing by.