The 4 Ps of marketing have become the whipping boy for the latest fads in the marketing reboot in the last 5-10 years. But that’s only because everyone wants to be cool–the 4 Ps are still where the real action is.
First off, let’s make sure we’re all on the same page about what the heck the 4 Ps are:
- Product–this is the whole product, including services, extras, warranties, packaging, upgrades, the whole kit and caboodle–everything that someone gets when they do business with you. Everything.
- Place–the way customers get the product from you. You might sell directly, maybe you have retailers or wholesalers, you might use distributors. Place is the set of channels you have to get your product or service to the market.
- Promotion–all the tactics you use to get visibility for your product or service. Includes social media, advertising, public relations, email, your website, and anything you do to get the word out, including events, speaking, and networking.
- Price–this is what you charge that captures all the value you can that gives you an incentive to stay in business.
The only thing missing from this is market segmentation. That’s a fancy way of describing how you’re going to narrow your focus so that you can actually appeal to a part of the market and put all your resources behind your efforts. If you don’t narrow your focus, well, you can read about that in 3 Ways to Dramatically Improve Your Marketing Results. Then meet us back here again… we’ll wait.
Ok. Let’s continue.
Why the 4 Ps are Really Where the Action Is
Take a look at that list above again. Seems like just a laundry list of marketing junk, right? It can be, unless you have some context for how these 4 Ps actually leverage each other into results.
Here’s the sequence of using the 4 Ps that makes all the difference:
Reason Number One the 4 Ps Really Matter
First, you have to know whose problem you’re solving, and a problem they’re willing to pay to get solved. That’s your target market–and that’s the DRIVER for everything… yep, everything. Not your product idea–that’s not a driver, that’s an idea or a hobby. The DRIVER for a business is always the set of customers, the target market, the market segment (I don’t care what you want to call it), the people who will pay you so that you can be in business to get them the solution to their problem.
Reason Number Two the 4 Ps Really Matter
Once you have real clarity on who those people are, then the NEXT up is the product. The product is the SOLUTION to the problem. It’s everything those people had hoped for–that’s the ideal.
Once you have this equation down–which is what the Lean Startup process is all about by the way–then the rest of your work won’t waste a ton of your time and resources. Let me say that the other way around: if you don’t get this equation down, you’ll spend a lot of time throwing money out the window and you’ll be frustrated and poor.
Reason Number Three the 4 Ps Really Matter
The THIRD step is to use your product/market equation and figure out how to get that product into your market in the cheapest, fastest, most wonderful way possible. That’s place or channel. You can’t figure that out until you know your basic building block equation of product/market. Because how will you know where they’ll buy? And who will carry this product or who will deliver this service? You don’t until you know the basic equation.
Reason Number Four the 4 Ps Really Matter
FOURTH: time to figure out how to get the world to know about your offering. Promotion–but this includes inbound marketing as well as outbound marketing, traditional ads as well as online advertising, and social media, email, direct mail–whatever is the best match for the product/market AND the place/channel. If you do this without knowing all of that first, you’re still throwing money away…
And Extra Reason Number Five that the 4 Ps Really Matter
FIFTH is when you figure out how much value your market perceives your solution to create for them. Then you’re going to set a price that captures as much of that value as possible. That’s when you make money–which keeps you in business and keeps them having the solution to the problem they have. If you do this before the other steps, you’ll be leaving money on the table. Perceived value is greatly impacted by the quality of your promotion–it’s up to you to let them know the wonderful ways your solution improves their lives. If they don’t know that stuff, they’re going to pay less, that’s all there is to it. You have to do some work to get a good price, and that means understanding very well what’s of value to your market so you can make that clear to them in relation to your solution.
And that’s the 4 Ps PLUS target segment. What doesn’t that cover? EVERYTHING is in that sequence. So would you rather be cool? Or make money?
