The Four Ps of marketing

In the 1960s, the Harvard Business School discovered a number of company actions that influence the decision to buy goods or services. They suggested that the actions are a “Marketing Mix”, containing four elements: product, price, promotion and placement.

Product: The product aspects of marketing cover the specifications, and how they relate to the end-user's needs and wants. The scope of a product normally includes supporting elements such as warranties, support and guarantees.

Pricing: This covers the process of setting the best price for a product, including discounts. The price does not necesarily need to be monetary - it can be what’s exchanged for the product or service - time, energy, or a measure of attention.

Promotion: This covers web advertising, sales promotion, publicity, and face-to-face selling and branding, and refers to the various methods of sales promotion.

Placement (or distribution): covers how the product or service gets to the customer eg distribution or retailing. This fourth P is also called Place, referring to the channel through which it is sold (eg online or retail etc), which region or industry and which market segment (eg teenagers, families, business people etc).

These four marketing elements are often called the marketing mix, which can be used to create a marketing plan. The four Ps marketing model is useful for B2B both products and services. High-value consumer products require refinement to this model. Services marketing must also take account of the unique nature of the services.

B2B marketing must also take into account long-term agreements typically found in supply chain contracts. Relationship marketing attempts to accomplish this by looking at all aspects of marketing from a long-term relationship-building angle rather than looking at individual transactions.

Five ways to determine good prospects

All prospects are not created equal; some are more likely than others to turn into sales. To avoid wasting resources, you need to weed out the poor prospects and concentrate your efforts on prospects who will yield a return on your investment of time, money and resources.

The following five steps will help you determine good prospects from bad prospects:

1) Define your target market very precisely. Break your market down by demographics ie geography, industry, company employee size etc. This will enable you to focus on the prospects that match your target audience.

2) Assess need, budget and the prospect’s buying authority. Ask basic questions that will allow you to determine whether a prospect is ready, such as:

What's the time frame for this project?
Who else is involved in making the decision?
What's the budget for this type of product or service?
How will the decision be made?
Is your company ready to buy if the right product or service is found?
If you decide that our product or service meets your needs, what will the next step be?

3) Ask for a “yes” or "no." Conventional wisdom says that as long as the prospect hasn't said "no," then the sale is still possible. However, when it comes to rating prospects, get a decision, even if it's no. It’s better to find out sooner rather than later that the chances of closing a sale are slight.

4)  Evaluate financial position. Creditworthy prospects are better than high-risk customers. Stable prospects are better than customers going through widespread changes. A company that is merging or downsizing may delay buying decisions.

5) Develop a scoring system. Rate prospects by a letter or number grade, based on the possibility of closing the sale. Concentrate on A prospects, and upgrade or downgrade the other prospects as circumstances change.