4Ps analysis – the most important marketing tool every devised
The 4Ps business tool is a great favourite, especially among marketers. If you combine a SWOT analysis with a 4Ps analysis, your marketing plan is well on its way.
The 4Ps is a mnemonic which is easy to remember – product, price, place and promotion. The term was coined by Edmund McCarthy, an American marketing professor who sought to bring structure to marketing as befitted his training as a statistician a mathematician. In 1960 he launched the business tool in his book entitled Basic Marketing: A managerial approach.
Business tools are dynamic and are constantly being changed. For some people the 4Ps have become the 7Ps with the addition of people, process, and physical evidence (the latter referring to the physical environment which could be part of the offer – such as the width of the aisles in a supermarket).
The starting point for the 4Ps is to establish your target market. Once this is determined it makes sense to ensure that the product, the most important part of the marketing mix, is something that people will find appealing.
Price sets the value of the offer and it has to be right. It has to be a bargain from both the customer and the supplier's points of view.
Now we need somewhere to sell the product. This is "place", better understood nowadays as the channel through which people can obtain the product.
And finally, people have to be aware of the product and its availability and they need to be convinced of its value. For this we need promotion.
Getting the right product, at the right price, in the right place, with the right promotion, is the essence of Edmund McCarthy's model.
In 2013 an article in the Harvard Business Review, under the title "Rethinking The 4Ps", argued that the original 4Ps model isn't suited to the business to business world. The article suggested an improved framework under the acronym SAVE. This stands for solution, access, value and education.
Solution – rather than product, the word solution places the emphasis on solving problems. Companies buying products or services from other companies are not buying them for their own sake but for the solutions that they provide.
Access – rather than place, the word access emphasises the importance of reaching customers wherever they are and whatever they are doing. For many companies, the internet may be a more important means of access to customers than bricks and mortar.
Value – rather than price, people care more about what they get for their money. It is value that matters.
Education – rather than promotion, education puts the emphasis on trust and reputation which are important in B2B markets.
Consider using the 4P analysis or the SAVE model when developing a marketing plan. It is particularly useful when entering a new market, launching a new product or developing a new customer segment.