Learn It 14.3.2: The Marketing Mix

The 4Ps of Marketing

4Ps of marketing

The 4Ps of marketing are the key things you need to consider when selling something: What you’re selling (Product), how much it costs (Price), where and how you sell it (Place), and how you tell people about it (Promotion).

Instead of continuing with a theoretical discussion of the marketing mix and the 4Ps of marketing, let’s examine the 4Ps using an example of a product you probably already own—a backpack.

Product

Remember, product refers to a good or service that a company offers to its customers. In terms of product, marketing analyzes the needs of consumers who buy backpacks and decides if they want more and/or different bags. For example, marketing will analyze what features consumers want in the bag. Do they want a water bottle pocket, padded shoulder straps, reflective tape, a padded laptop sleeve, or organizer pockets?

Armed with market research knowledge, marketing then attempts to predict what types of backpacks different consumers will want and which of these consumers they will try to satisfy. For example, are you selling bags to adults for their children’s use? Are you selling them to young adults who might want more (or different) graphics on the bag? Are you selling to adults who will use these bags for work or for school?

Marketing will then estimate how many of these consumers will purchase backpacks over the next several years and how many bags they’ll likely purchase. Marketing will also estimate how many competitors will be producing backpacks, how many they’ll produce, and what types.

Purple hexagon with the following text in the center: Product: What solution does the customer want and need. Outside the hexagon, to the right, is a list of considerations: features, design, user experience, naming, branding, differentiation
Figure 1. Part of marketing a backpack is analyzing which features consumers want.

Price

Price is the amount consumers pay for a product or service. There’s a delicate balance here. On one hand, marketers must link the price to the product’s real or perceived benefits while at the same time taking into consideration factors like production costs, seasonal and distributor discounts, and pricing product lines and different models within the line.

Marketers attempt to estimate how much consumers are willing to pay for the backpack and if the company can make a profit selling at that price. In the case of our backpack example, the company wants to determine two things:

  • What’s the minimum price that the company can charge for the backpack and still make a profit?
  • What’s the maximum price that the company can charge for the backpack without losing customers?

The “correct” answer usually lies somewhere in between those points.

Orange hexagon with the following text in the middle: Price: what is the cost to the consumer? Outside the hexagon, at the right, is a list of considerations: value to buyer, price sensitivity, existing price points, discounts, competitor pricing
Figure 2. Marketers need to determine what price consumers are willing to pay and whether the company can make a profit at that price.

Place

Place considerations focus on how and where to deliver the product to the consumer most likely to buy it. Where did you buy your backpack? Did you buy it in a big box store, online, in an office products store, or perhaps even the school bookstore? Once again, through market research, marketers determine where potential customers will be and how to get the company’s backpacks to them.

One important factor to note about the importance of place in the marketing mix is that it doesn’t refer to the location of the company itself but rather to the location of the customers or potential customers. Place deals with strategies the marketer can employ to get those backpacks from their present location—a warehouse, for example—to the location of the customers.

Turquoise hexagon with the following text: Place: how does the customer act or buy? Outside the hexagon, at the right, is a list of considerations: location of purchase, ease of transaction, access to distribution channels, sales force, competitor approaches
Figure 3. Marketers must determine the best locations for consumers to buy the product.

Promotion

Promotion includes advertising, public relations, Internet and social media advertising, and trade shows. A company’s promotional efforts must increase awareness of the product and articulate the reasons why customers should purchase their product. The goal of any promotional activity is to reach the consumers at the right time and the right place.

In terms of our backpack example, marketing now needs to decide which kinds of promotional strategies should be used to tell potential customers about the company’s backpacks. For instance, should you use TV advertisements to make customers aware of the backpack? If so, you’ll want to run your commercials during programs that your target audience watches. For example, if you’re selling backpacks to children (or trying to entice them to badger their parents to purchase them), children’s cartoons may be the most cost-effective avenue to reach your target market. If your backpacks are designed for work or school, you’ll likely decide to advertise on television programs that target younger adults.

Perhaps you will use Internet advertising (sometimes known as online advertising or digital advertising). If you’re going to go the digital route, what types of internet advertising will you use? Search engine marketing? Email marketing? Social media ads? TikTok videos? Your choice depends on which platform your research shows your target customers are most likely to use.

Green hexagon with the following text in the center: Promotion: What is the dialogue between customer and company? Outside the hexagon, to the right, is a list of considerations: Message; method of delivering message, timing of delivery; communications by customers and influencers; competitor promotions.
Figure 4. Promotion is what communicates why consumers should buy a certain product.

Netflix, Jansport, and Stranger Things

An example of promotion is the brand partnership between Netflix and JanSport, the backpack company. These two companies collaborated on a Stranger Things–branded backpack with the launch of the fourth season of the show Stranger Things on Netflix in 2022. This collaboration created five backpacks inspired by the characters on the show.

Competitors and the Marketing Mix

The challenge of getting the right marketing mix is magnified by the existence of competitors, who exert market pressures using strategies defined by their marketing mix alternatives. Remember, the purpose of the marketing mix is to find the right combination of product, price, promotion, and distribution (place) so that a company can gain and maintain advantage over competitors.