When it comes to creating your marketing strategy and writing a marketing plan, the marketing mix is ideal to describe how you’ll use your marketing tools. In the 1960s, the original marketing mix was made up of 4 Ps – product, price, place, and promotion. However, because the market has changed vastly since the ‘60s, various alternative models arose: the 6P, 7P, 4C, and the SIVA model.
But what’s the model that matches your business affairs best? In this article, we’ll go through the 3 different P models, which are primarily useful for product- and service-oriented organizations. However, if your business model is more customer/client-oriented instead, make sure to read this article, which discusses the 4C and the SIVA models of the marketing mix as well.
The 4P Model
The variables product, price, place, and promotion have a dynamic relationship, which means that changing one of the variables will have consequences for the other variables. In other words, by changing any of the 4Ps, you’ll get an entirely new marketing mix. When it comes to analyzing your Ps for a marketing strategy, they are further subdivided.
There are 3 levels of your product that you can offer value to consumers with:
- Tangible product: the actual tangible product for sale, which can be distinguished through quality, design, branding, packaging, etc.
- Core product: the non-tangible advantages of the product; what is it that the product facilitates or enables the consumer?
- Extended product: benefits that convince on a psychological level such as warranty, free delivery and installation at home, free returns, etc. These added benefits usually come in the form of price, place, and promotionalmarketing tactics.
There are 2 price strategies to market your product with:
- Penetration means entering the market with a low price, and raising it after the consumer is familiar with the product. The advantage of this strategy is that a cheap product easily sells itself without really investing in advertising.
- Skimming, conversely, involves entering the market with a high price in order to exude exclusivity. Think of exclusively marketed products such as Louis Vuitton bags and Apple laptops. When skimming, you’ll slowly lower the price so that you can increase your market share and introduce new products to the market at a high price again. Keep in mind that this strategy requires you to invest in advertisement and branding geared toward creating an exclusive product image.
For place – or distribution – there are 3 ways that you can go about it:
- Exclusive distribution is when one or a few retailers sell your product. This is primarily effective for very expensive products that require expert knowledge, such as cars, or products with a huge selection, such as paint. In general, this works well for specialty products and B2B sales.
- Intensive distribution is the opposite of exclusive distribution, meaning that you sell your product at as many places as possible. This is primarily effective for convenience products such as snacks, candy, standard cooking ingredients, and instant meals.
- Selective distribution is the middle ground where you select your retailers according to a limited amount of criteria, such as customer service quality, assortment, management, business facility image, and location. This is particularly useful for shopping products such as carpet, electronics, clothes, and products where after-purchase service is essential. If you select this distribution strategy, make sure to select facilities with good revenue, profit, and turnover rate.
For the last P, promotion, there are 2 marketing segments:
- Below the line: this marketing is direct and personal, focused on individual consumers.
- Above the line: marketing to the masses, via mass media such as TV, internet, radio, and billboards.
While below the line marketing is quite easy via the internet these days, you have to consider your type of product here. Is it suitable for the masses? Or is it geared toward a specific demographic? In the latter case, consider how big this demographic is, and how you can best reach that demographic. Some demographics such as old people are still better targeted via above the line marketing instruments.
6 Ps for the service industry
When the service industry exploded in the 1980s, marketing had to adapt. In the 6p model for service marketing, the two Ps of personnel and process are added to the other 4 Ps of the original marketing mix.
Since the service providers – the personnel – play a large role in the delivery and experience of a service, they are important factors to take into account if your company operates in the service industry. Your marketing, accordingly, relies on the performance of your personnel, which you can improve through extra education or incentivizing rewards, for example.
Where the personnel part of the marketing mix is focused on the person, the Process part is focused on all the procedures of the actual service itself. These procedures, however, do include the communications and interactions between the service provider and the customer/client through personnel.
So, in order to improve your process marketing, it’s important to first map out all the procedures involved in the service that your company offers. Then, you analyze the ways that these are currently handled to see where and how you could improve them.
The 7th P: Physical Evidence
The final P added to the P model of the marketing mix, physical evidence, refers to the environment that a service is delivered in combined with tangible objects that add value to the customer/client. This could be your brochure, website, reviews, quotations, personnel clothing, and the interior design of your business, for example.
All this physical evidence factors into the judgment and experience of the customer regarding your company and the product/service that you deliver. Hence, improving upon any of them can improve the overall customer experience and can therefore feature as part of your marketing plan.
The best P model
One P model is not necessarily better than the other, it really depends on your business model and vision, and how many of the Ps are relevant for this. If you’ve got the time, we recommend you to see if you can analyze all 7 Ps in your organization, and then determine to what degree every one of them is relevant and/or of influence to your marketing dynamics.
From there on you can decide whether to build your marketing mix for the actual marketing plan out of 4, 6 or 7 Ps. Keep in mind, though, that taking more Ps into account means that you’ll have more complex marketing dynamics, for in the marketing mix everything always influences everything else.
Once again, if your business model is more customer/client-oriented than the product- or service-oriented, make sure to read our marketing mix article on the 4C and the SIVA model!