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.

B2B and B2C marketing

The differences between B2B and B2C marketing may seem obvious, but there are subtle distinctions between the two with substantial implications. B2B marketing generally entails shorter and more direct channels of distribution.

While B2C marketing is aimed at large demographic groups through mass media and retailers, the negotiation process between the buyer and seller is more personal in B2B marketing. Many B2B marketers commit only a small part of their promotional budgets to advertising, compared to B2B marketers.

Marketing to a business (B2B) trying to make a profit as opposed to an individual for personal use (B2C marketing) is similar in terms of the fundamental principles of marketing. In both B2C and B2C marketing situations:

Match the product/service strengths with the needs of a definable target market

Position and price to align the product/service with its market, often an intricate balance

Communicate and sell it in the fashion that demonstrates its value effectively to the target market.

Select the best channels for selling

These are the fundamental principles of the 4 Ps of marketing (the marketing mix) documented by E. Jerome McCarthy in 1960.

Business customers fall into four categories: companies that consume products or services, government organisations, institutions and resellers.

The first category includes original equipment manufacturers, such as car manufacturers, who buy components to put in their cars, and users, which are companies that purchase products for their own consumption. The second category, government organisations, is the biggest.

In fact, the UK government is the biggest single purchaser of products and services in the country. But this category also includes state and local governments. The third category, institutions, includes schools, hospitals, care homes, churches and charities. Finally, resellers include wholesalers, brokers and industrial distributors.

A B2C sale is to an individual. That individual may be influenced by other factors, but it’s a single person that pulls out their wallet. A B2B sale is to an organisation. And with that simple difference lies a web of complications that differ because of the organisational nature of the sale and which vary widely by firmographic (“demographic” for segmenting businesses) such as business size, location, industry and sales revenue.