The 4 Ps: Product, Price, Promotion, and Place Maybe call this What are the 4 Ps rather than repeating the chapter title 

by Richard Hochhauser

The 4 Ps are used as a description of marketing in general, an outline or sections of a marketing plan, or as a description of the marketing mix. They are:

Price – the amount charged for the good or service (offering), and what impact this has on the brand

Product – an offering that’s for sale

Promotion – sellers telling about and selling the offering to prospective buyers

Place – where the product is made available, sold, and delivered

This initial view of the marketing mix was described in 1960 by Jerome McCarthy in his book Basic Marketing: A Managerial Approach and is shown in Figure 1.1.

There have been clarifications and changes to the 4 Ps model since then, though one could argue that most of those changes can easily be incorporated into the definitions of each of the 4 Ps, as shown below:

• Price – the amount charged for the good or service (offering)
• Product – an offering that’s for sale
• Promotion – sellers telling prospective buyers about the offering
• Place – the way the offering is delivered

One new way of thinking about the 4 Ps came in the form of a revised terminology for the B2B sector as shown in the third column of Figure 1.1. These are helpful constructs and expand the definitions of the 4 Ps. They also apply to the world of B2C as well as B2B. The authors refer to their approach as S.A.V.E. (Solutions, Access, Value, and Education).

Let’s do a deeper dive into each of the 4 Ps.

1. “Price” has been defined as:

• List price and discounts
• Timing
• Allowances
• Payment terms
• Competition pricing
• Shipping costs

Adding “value” to this list does not require creation of a new acronym.

2. The term “Product” has been described by its features, brand, quality, functionality, labeling, services, and packaging.

Adding the term solution to the definition seems appropriate, and one could argue that B2C marketing can also be solution oriented.

3. “Promotion” has been defined by such terms as advertising, public relations, direct and database marketing, sales force, sales promotion, communications, and messaging.

Over the past 20 years, the internet has been added as a promotion vehicle. The purpose of many of these is to create awareness, interest, desire, and action (AIDA buyer behavior model). One way to achieve these goals is to educate—thus, it’s already part of the existing definition.

4. Finally, “Place” is often described as distribution.

Other descriptors have been channel, location, coverage, and sometimes even inventory, warehousing, and logistics systems. E-commerce is one of the recent additions to the definition. Access is an important component of Place both for B2B and B2C and should be added to the definition.

The Forbes Magazine article by Ahmad Kareh “Evolution of the Four Ps: Revisiting the Marketing Mix” (1/3/2018) suggests that another “P” be added entitled “Process.” The argument is that strong processes allow such companies as Walmart and Amazon to charge less money and gain market share. While it’s hard to deny this, I’m not sure why “Place” can’t cover this as it already includes many of the process elements. This article also points out that “People” be added as another “P.”

It supports the people argument with inside-out thinking—what the company needs to do to have the right people in place. While that’s important, the outside-in approach may be more important—then the focus will be on the customer, that is, who the prospective target customers are and what they care about. Human capital or “people” are part of each of the 4 Ps, but this dimension is the strongest candidate for a fifth P.

Let’s look at the applications of these 4 Ps. Questions to ask about Price are:

1. How do perceptions change with different price points?
2. What pricing strategy works for the product vis-à-vis competition?
3. While the cost to produce should not be the determinant of price, it is an important element correlated with profitability.
4. What is price/demand elasticity—the extent to which a change in price impacts demand?
5. What is the perceived value (= benefits/price)?

For Product, seek answers to these questions:

1. What will someone do with the service or product? How will it be used?
2. Where will the client use it?
3. What features are really important and help differentiate the product or service?
4. What needs are met and not met by the product or service?
5. How is the brand supported?

For Promotion, the questions relate to communication and the audience:

1. What channels are available to send communication to prospects and customers?
2. What channels are used and preferred by prospects and customers?
3. Has the audience been segmented to identify targeted prospects, loyal customers, etc.?
4. What message works best for each of the segments?
5. What are competitors doing to promote their product?

For Place, ask the following:

1. Where do customers try to find the product? Where do they prefer to buy?
2. How are different channels accessed and are you making it convenient?
3. Is there an opportunity for inbound marketing (e.g., website) as well as outbound?
4. Can barriers to purchasing be removed?
5. Are partners needed to distribute the product?

Here are some examples of the 4 Ps for three different cleansing products: Label as a Figure 1.2?

Source: Lumen Chapter 13 https://courses.lumenlearning.com/wmopen-introbusiness/chapter/marketing-mix-introduction/

In summary, the 4 Ps are used in developing a marketing plan, and are needed to do the following:

1. Identify a strategy of differentiation.
2. Understand and ultimately meet the needs of customers and prospects.
3. See the interactions between the elements of the 4 Ps.
4. Develop a unique selling proposition (USP).
5. Understand the competition better.
6. Develop a communications plan.
7. Establish marketing goals and budgets.
8. Better understand the partners needed to achieve marketing objectives.
9. Understand the products and services that can be offered to customers.
10. Assess marketing effectiveness and ROI (return on investment).
11. Allocate resources.

The 4 Ps are an invaluable tool for marketers to both plan and execute. Its focus on the customer sets the stage for a winning organizational culture.

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