Understanding the Four P's of Marketing

As complex as marketing may seem, at its core it comes down to four P's: product, price, promotion, and place. As new technologies have developed and more advanced tactics have become available, the principles never change. Thus the importance of understanding them.

While marketing has several "principles" to understand, these four P's are the most widespread and taught in every college marketing textbook. If you ever took one of those classes you may remember having to do this as an essential step of the marketing plan. For those of you who never did, take some notes. This will help, I promise.

Product

This is a tough one to figure out (just kidding on that one), but it really is just the products you sell.

Granted, it may seem simple, but you can get much more detailed with your product selection.

Marc Lore, the founder of diapers.com, had one of the best product strategies I have heard of. Essentially started with an online store selling diapers, he would go to Costco and buy diapers for $10 a box and sell them online for $9 just to get a price advantage over competitors. It might seem crazy, but his choice to sell several other baby-related products paid off big time. Amazon recently bought his company for $585 million.

As you can see product choice does matter, and even if you make no money on certain products, it can lead to up-sells and return customers for other more profitable items.

You should also go a step further and think about how you can make your product stand out. This Is where things like product packaging and other offerings such as warranties come into play. After all, if you aren't able to compete on price, what are other ways to get the customers to buy your product?

Price

Price is on a simplistic level, just what you sell your product for.

At the same time, you can't set any price you want unless the value is there. You have to know what your market supports in order to maximize profits.

Different tactics of discounts and timing should be applied in this area as well. You could operate like JC Penny and have discounts every week, or go more of an Apple route and rarely offer discounts. It just depends on the type of customers you want to attract.

Finally, you may want to look at different payment options. You could have monthly recurring services, or maybe a one-time flat fee. But if your product is fairly expensive you may have more luck offering different payment options.

Formerly, I worked for a used car dealership. My boss was a penny pincher kind of guy, so he always priced his cars a few thousand above market value. The same car you could buy anywhere else for $8k, he was selling for $12k. What is crazy though, he offered no credit financing and no one ever seemed to care about the price of the car as long as it was a nice car. He was the only guy financing used Mercedes and BMWs in the area so most people went there for a car. High risk but high reward, and he wouldn't have made that money without alternate financing options.

Promotion

Once you have a product and a price, how does anyone know it exists?

The promotion part of this is probably what you think of when you think of marketing.

How are you going to sell this product?

What strategies, platforms, and advertisements are you going to use to build awareness?

Promoting your product is simple, creating a consistent brand message and showing as many people as possible. On average, someone has to see your ad 7 times before they are convinced to buy. So you have to make sure they are seeing something they like first off, and secondly, make sure they keep seeing your brand.

If you want to read more about branding, check out my article on Building a Brand.

Place

In order for someone to buy you have to have the right product at the right place at the right time.

Now in this new world of the internet, the place is no longer just a 15-mile radius around where you live.

The place can literally be anywhere in the world, you can define that however you want. Now at the same time, you must define how you are going to be able to sell to those places if they aren't local.

You must also consider your business limitations. Restaurants can't really ship food, but you may be able to sell T-shirts online. This goes along with your product selection. It really is up to you how you define it.

This should help you develop a stronger marketing plan, and as always if you have any questions feel free to add me on LinkedIn or visit my website at jacobtheceo.com.