Product, Place, Price and Promotion – why the 4 Ps are still relevant today
The concept of the 4 Ps may have come from a 1960s text book by Neil Borden but they are still relevant today. Most Marketing courses continue to be based around the simple ideas of Product, Place, Price and Promotion. These categories have now been widened and many different concepts, processes and strategies formulated for each. Some marketing texts also add further Ps such as people and processes to incorporate many of the current business models and approaches to business management. However no matter how complicated we get about the details of the 4 Ps they remain a great simple way to structure your approach to marketing.
The way we communicate may be changing all the time and the geographical reach of our business enterprises knows little bounds, but the essentials of business have not changed. Unless you have a product that people want to buy, at a price they are willing to pay for it, available to purchase somewhere accessible to them and promoted so they can find out about it then you have the building blocks for any type of business.
Products can be actual manufactured items or services but whatever your product it needs to have a potential customer.
Place is all about making sure your product is accessible to your customer base. This seems easier in the internet age where people can order items and services at the click of a mouse but for the business owner it is essential to be available in the right place for your customer and to keep the costs for shipping your products or services in proportion with the product’s cost.
Pricing should always be calculated from your fixed and variable costs. Once you have a break even point established you can decide on a pricing strategy but you need to know exactly what to charge in order to make a profit. As part of your decision about pricing strategy take a look at your competitors prices and do some research regarding what potential customers might be willing to pay. If you have a range of products there may be opportunities to balance your profits across the business allowing you to discount some products from time to time.
Promotion has to be in scale with the profits you make. You can spend endlessly on promotion so you should have a marketing strategy, stick to your promotion budget and make your promotional activities work hard for you. There are a wealth of promotional opportunities as a result of new methods of communication but try not to be swept along by the “next big thing” in advertising. Instead take a structured approach and use your resources wisely. There are many opportunities for free promotion but you may need to free up some of your time to capitalize on them.
Marketing has become a complex, multifaceted, multimillion dollar industry so it is not a surprise that a simple concept like the 4 Ps still holds value for small businesses trying to make an impact, and a profit, in an increasingly competitive business world.