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.

Customer focus

Very many companies today have a customer focus, otherwise known as market orientation. These phrases imply that the company focuses ll of its activities and products on consumer demand. There is the customer-driven approach, the market-change approach and the product innovation approach.

With the consumer-driven approach, the consumer wants brcome the strategic marketing decisions. No strategy is developed until it undergoes consumer research. Each aspect of a product, including the nature of the product itself, is affected by the needs of consumers. The starting point is the consumer. The reason for this approach is that it's pointless spending R&D budget developing products that people will never buy. Looking at the past, many products were commercial failures despite being technology breakthroughs.

The formal approach to customer-focused marketing is known as SIVA (Solution, Information, Value, Access). The SIVA system is basically the four Ps renamed and reworded with a customer focus.

Using the SIVA Model generates a demand or customer-centric alternative to the traditional 4Ps model (product, price, place, promotion) of marketing.

Product → Solution
Promotion → Information
Price → Value
Place → Access

The revised four elements of the SIVA model are:

Solution: is the solution appropriate to the customer's need?

Information: is the customer aware of the solution? and do they know enough to make a buying decision?

Value: does the customer know what it will cost, the benefits and their reward?

Access: Where can the customer purchase the solution? and how easily can they buy it and get delivery?

The SIVA model was originally proposed by Chekitan Dev and Don Schultz in the press, the Marketing Management Journal of the American Marketing Association. It was then presented in Market Leader, the journal of the Marketing Society published in the UK. In essence, the model focuses on the customer and how they, the prospect view the potential transaction.