What is the marketing mix? What are the 4Ps ? This is an useful definition: “The marketing mix refers to the actions a company takes to market its product(s) and/or service(s). Typically, it acts as a framework for breaking down the four key components of marketing — product, price, place, and promotion”.
For those in marketing, it’s the tools, the available “levers” that you use to influence and condition the choices of customers, both actual or potential.
The advent of digitization has led to significant changes not only in marketing, but more broadly in society, consumer behavior, and communication. Despite these changes, the 4Ps of the marketing mix theory remain valid; in the digital age, McCarthy’s 4Ps are now 7. In this post, we’ll look at this expanded model and understand their value within a business strategy.
The 4 fundamental Ps of the marketing mix
First, let’s take a look at the original 4Ps of the marketing mix. The approach, which was proposed by E. Jerome McCarthy, was made popular by Philip Kotler. In it, the 4 levers: Product, Price, Place, and Promotion are used by the company to define the elements of their marketing mix.
For more than 50 years, in fact, companies have been using this approach to define the entire marketing strategy, using these elements to influence the decisions and actions of the target audience and to discover the market itself, the competitors and their strategies, the factors that then push you to reflect on the challenges and potential of your company within it.
What questions does the marketer ask himself when using these decisive levers? Knowing what the marketing mix is in itself is not enough to sufficiently know how to apply it; instead, we must ask ourselves about the task of each single lever. Behind these basic tools lies intricate reasoning. It is not enough to apply them, we need to understand the “why” behind their function in order to fully exploit their potential. Let’s start by asking ourselves questions about the 4Ps of marketing mix set out by McCarthy.
After a careful market analysis that enables an understanding of consumer preferences and the product characteristics of competitors, the company must analyze the entire product life cycle. The marketer must study how his product is perceived by the potential customer, understand the shape that the product must have, the packaging that must contain it, what it should be called, and the characteristics it should have.
The questions to be asked at this stage are essentially how and where the customer can use the product, and why it can be evaluated as different from any existing competing products: “What are consumers looking for when they buy products like ours?”
The perception of the quality of the product is influenced by the price. In addition to considering the cost necessary to produce the good in question, above all, you’ll want to try to understand the price that potential customers would be willing to pay, i.e. the value they would give to the product and the benefits they would derive from its use.
With the third variable we refer to the choice of product positioning in the sales channel and supply chain. The objective is to ensure that the product is well distributed and easily accessible to potential customers. Following the market analysis, the marketer knows that when choosing the sales channel, he must first ask where potential customers would go to look for the product and which distribution channels competitors are currently using.
How will marketers make the product known to the market? Today, the answer to that question is e-commerce. Retailers are increasingly favoring the integration between the physical and digital environment, where retailers are using an “omnichannel” strategy to meet customers’ needs. The current scenario is driving companies to make the consumer’s shopping experience “liquid”, through the interconnection of all channels that “touch” shopping: point of sale, e-commerce site, digital devices, direct email, social networks, contact centers, etc. (theinnovationfactory.it).
Marketing has three objectives: to inform, to persuade, to remember. What is the best channel to make the product known to the right target? When is the right moment to communicate the features of the product and how? The ultimate goal is to stimulate the purchase. The main tools of promotion are sales, advertising, sales promotion, public relations, and direct marketing.
The promotion, or rather communication, is necessary to make the customer aware of the benefits that would be gained from purchase, to convince him to try the product, and to address any misperceptions about the product, all in order to build loyalty, strengthen the impression, and to support the various forms of promotion.
The marketing mix goes digital
As technology advances, market dynamics have changed, which means that companies need to adapt to the new needs of society. Although the 4Ps, the cornerstones of the marketing mix still remain valid in the business process, digital transformation — in the form of the widespread use of smartphones and the rise of e-commerce — has introduced new aspects related to the ways customers find and purchase products .
In light of these evolutions, it’s important to note an important change in the rules at stake: the consumer is no longer a passive in their choices, but more selective and demanding, and very active in the search for information about the products and services he intends to buy. Web marketing leads to a re-evaluation of the product itself, moving from a company-centric to a consumer-centric perspective.
Looking at the product through the eyes of the consumer means directing the company’s choices towards its needs. Kotler believes that, through an in-depth analysis of 4Ps of marketing mix from another perspective, one can assume that the product is not entirely customer-oriented, but rather as output generated by a company and conveyed to the market. The customer is at the center of the analysis but up to a certain point. In fact, Kotler believes that the four traditional levers are elaborated to satisfy the customer, but that they are still too company-oriented. From this observation comes the evolution to the “4C” model: Customer value, Change, Convenience, Communication. In the new model, the focus is shifted from the brand to the customer. In other words, all of the actions of the marketing mix revolves around the consumer, and all sales activities are organized around this. The customer’s perceptions influence the value of the product, and the success of the product’s sales depends on achieving consumer satisfaction and loyalty.
It then becomes necessary to raise awareness of the traditional 4Ps of marketing mix model by expanding it by three additional variables proposed by Booms and Bitner.
An important aspect that is often forgotten is recognizing the company’s human value. This means remembering that it is the people who make up the company, from every department, and that their behavior, management choices, determine the functioning of the company itself. Here, it’s about the value of people and their involvement in company activities. Making them aware of the quality of their contribution, encouraging their participation is the path that leads to the real and original goal: to generate added value for people and humanize the company. Behind the perception of a good product there are the people who have participated in its creation, and this is an additional audience in which the company will invest.
Organizing the process in an optimal way helps promote efficiency and it affects how customers perceive the quality of the service offered. As the sixth element of the marketing mix, it encompasses all business processes, from the production cycle to the sales funnel. Focusing on the customer’s perception of the company and the product at the highest level means ensuring that every part of the process is implemented in the best possible way. If the product or service responds well to market needs, but there is some lack of customer care or an error during delivery, this could impact the perceived value.
Last but not least, the seventh variable in today’s marketing mix is physical evidence. It refers to the perception that the end consumer derives from the service provided. The customer’s assessment of the product or service received is essential to convey a positive image of the company. In the digital age, people look for evidence in the form of reviews, case studies, and any kind of feedback before they make a purchase. Taking care of this aspect becomes crucial to acquire new potential customers. In fact, a good review creates a positive ”word of mouth” between people with similar needs. This evidence helps build solid Brand Awareness. Through feedback, the company can communicate with the customer, implement their suggestions, respond to their needs. This also creates a positive perception by the customer in the brand as an attentive and reliable company.
The value of personalization in the marketing mix 4.0
The 4Cs theory is, as we have seen above, is made for the digital age, and here, marketers must focus on two new aspects emerging in the digital economy: content and community.
We live in a connected world, where customers need to have quick access to the products and services they are interested in through the immediacy of new information channels. This is the principle on which activation through the community is based.
In this new economy, promotion is no longer one-way: social networks allow customers to respond to companies’ promotional messages and comment on them, creating a two-way communication flow and an interactive space for sharing.
By shifting the focus from the company to the customer, the new product development strategy sees the involvement of customers at an early stage in the design process; in this way companies can increase the chances of success for new products. Today, this is a very important part of the process. Customers want to feel part of a personalized interaction, calibrated ad hoc, one that is able to create a positive connection between the customer and the brand of interest. Such an approach makes the difference: you can develop a sense of community and, at the same time, of personal recognition.
Now that we better understand the marketing mix, how it has evolved, and who is involved over time, we just have to deepen the theme of personalization in our business strategy in order to make the most of its potential and advantages.