Marketing 101: The 4 Ps and the 7 Ps

Let’s take a common, everyday activity - cooking. Think of your favorite recipe. Now, close your eyes and quickly list out everything you need to bring it to life. There's quite a bit on the list, isn’t it? Even the simplest recipe you can imagine - our good old Maggi - needs water, the noodles, and the tastemaker, right? This mix is crucial to making the Maggi perfect. Much like this, there’s also a mix of elements that companies need to make their marketing strategy a success. This leads us to the concept of a marketing mix. Let’s find out what this phrase means, and more importantly, what the 4 Ps and the 7 Ps are.

What is a marketing mix?

A marketing mix is a list of ingredients that are required to create the right marketing strategy. The ingredients here refer to certain concepts, practices and procedures. Tracing back the history of the marketing mix, we find ourselves in the 1960s. That’s when American academic and professor Neil H. Borden recognized a total of 12 variable marketing elements. According to Borden, if these elements were applied and controlled correctly, they held the potential to make a business operation profitable.

Then, Jerome McCarthy, another American professor and author, streamlined Borden ’s marketing mix and condensed it into 4 broader categories. Today, we know them as the 4 Ps that make up the marketing mix.

But the evolution of the marketing mix did not stop there. In 1981, two modern academics - Booms and Bitner - extended the 4 Ps of marketing to include three more elements. Today, this alternate composition of the marketing mix is accepted widely as the service marketing mix, and it consists of the 7 Ps of marketing.

Here’s a visual representation of how the marketing mix has progressed from Borden’s time up until now.

What are the 4 Ps?

The 4 Ps of marketing are the product, the place, the price and the promotions made to the product (or service, in case of the 7 Ps) visible to the public eye. Companies can make use of these four factors to identify what their consumers expect from them, and recognize how an existing consumer base reacts to the products or services that the company offers.

To be successful, every marketing strategy needs to be revised and tailored to meet new requirements from time to time. A strategy developed using the 4 Ps is not a static idea. It is dynamic and fluid, and it must be adjusted and adapted to the company’s journey over time.

Breaking down the 4 Ps: What are they all about?

To understand how the 4 Ps of marketing work, it’s important to understand each of them, one by one. And that’s just what we’re going to do in this segment.

1. Product

We always talk of products and services, right? But what is a product, anyway? Simply put, a product is a good that companies offer their customers. There are two basic kinds of products - one that fulfills an existing demand among the customer base, and another that makes customers believe they need to have it, thereby creating artificial demand.

For instance, salt is a product that meets an existing demand. A premium smartphone, on the other hand, is a product that creates an artificial demand and meets it. Product development and marketing works best when it is centered around a niche product or product range. For example, The Hershey Company has specialized in creating a range of signature chocolates, which is the product set that it is always associated with.

Every product has a definite life cycle that goes through four stages:

• Introduction
• Growth
• Maturity 
• Decline

Successful marketing strategies meet the varying needs of a product through the various stages of its life cycle. For instance, when a product has just been introduced, marketing efforts generally need to be directed at increasing penetration. Meanwhile, if a product is nearing its maturity stage, innovation needs to be the central point of the marketing strategy.

2. Place

This element of the marketing mix refers to the geographical location in which a company should market, and eventually sell, its product. The goal is to identify the place where the product is most likely to be a success. And this depends on figuring out the geographical area where the target audience is most likely to be interested in the product of a company.

To generate the maximum value from a product, it is important for a company to market the right product in the right place. The Starbucks menu is a great example of how marketing can be tweaked according to the place the product is being sold in. The menu from the coffee chain is different in each country, with some standard products remaining constant, and others being unique drinks offered across the world. In Canada, for instance, the Starbucks menu is curated to include flavors like caramel, toffee and maple syrup. In China, on the other hand, Starbucks offers a variety of beverages with tea as the base. Like this, the menu is slightly modified to accommodate local preferences in countries like South Korea, Japan, UK, India, and others.

3. Price

The next key element in the marketing mix is the price of the product. And it’s a big one. The price that a company charges for a product must reflect its true value. At the same time, it also needs to meet the expectations that consumers have, regarding how much the product is worth. In a bid to reflect its true worth, if a business prices its product too high, it may not correlate with the consumer expectation, thereby resulting in a loss of market share. Conversely, if a business prices its products too low in order to attract and retain customers, it could make the product a loss-making component of the business.

The trick is to toe the fine line between these two segments. Coca-Cola’s competitive pricing strategy is an excellent example of how getting the price right can make all the difference. In order to penetrate the market and expand its consumer base, the soda company resorted to charging its customers the same rate that its competitor Pepsi charged. Needless to say, it has worked out well in the company’s favour.

The price is also generally considered as a key indicator of a product’s status. A product with a high price tag is mostly considered as a luxury item, while a low price tag can indicate that the product belongs to the affordable segment.

4. Promotion

Promotion is a no-brainer. It refers to everything that a business does to increase the visibility its product enjoys in the market. Furthermore, it also pertains to how a business showcases the product in the target market. While promotions were entirely offline earlier, today, they have become hybrid practices that involve both offline and online channels.

To give you a better idea of what promotions are all about, here are some of the best promotional strategies that companies often resort to:

• Free samples of their products
• B1G1 or Buy One Get One Free offers
• Lifestyle discounts
• Cashbacks
• Flash sales
• Free shipping 
• Loyalty programs
• Referral discounts

If you use Swiggy regularly, you’re no doubt familiar with a number of these promotional tactics. The food delivery giant offers discount coupons, cashbacks, B1G1 offers and more. And needless to say, these are all highly popular with Swiggy’s customers.

What are the 7 Ps?

The 4 Ps are ideal for product marketing. But services often need a tad bit more. After all, unlike products, they are not tangible and easily quantifiable. Remember from earlier in this chapter how Booms and Bitner expanded McCarthy’s marketing mix to include three other elements? That gave rise to the 7 Ps of marketing, which are as follows:

1. Product
2. Place
3. Price
4. Promotion
5. Physical evidence
6. People
7. Processes

Of these, we’ve seen the first four already. Let’s take a look at the other three.

Breaking down the 7 Ps: What are they all about?

5. Physical evidence

Physical evidence is easy to identify for a product. The packaging, the parts and the product itself - all make up the evidence. But just like we’d mentioned earlier, services are not tangible. So, physical evidence in case of service deliveries is not only tricky, but also highly relevant and necessary.

The physical evidence in case of services includes the ambience in which the service is provided, the design, the layout of the environment in which the service is provided, and any other aspect that customers see, hear, feel or otherwise experience in some form.

For example, take Domino’s Pizza. The signature colors, the trademark layout of the brand’s outlets, which are always elevated from the ground level, and the general ambience are all part of the physical evidence.

6. People

Delivering a service involves a host of people. From the people involved in creating the concept for the service to the personnel in-charge of distribution and delivery, services are run by people. The best example of how the people make up a major part of the marketing mix is the Taj chain of hotels. The people involved in providing the hospitality services as a part of the chain leave a lasting positive impression on the people. This is a clear allusion to how the right people can elevate the quality of a service.

7. Processes

A service also involves a number of interconnected processes. Take the Naturals salon chain, for instance. To provide any one of their services - say hair styling - they need to account for various processes like procuring the styling products needed, ensuring they have sufficient stock of the same, training their personnel, and setting up a smooth billing process. If even any one of these processes fails or performs inadequately, the entire service may be jeopardised.

Wrapping up

So, all in all, these 7 Ps make up the marketing mix. Paying sufficient attention to each aspect allows businesses to craft and adhere to a solid marketing strategy. There’s more to marketing though, beyond these mixes. And that’s what we’re going to explore in the coming chapter.

A quick recap

• The marketing mix is a list of ingredients that are required to create the right marketing strategy. The ingredients here refer to certain concepts, practices and procedures. 
• In the 1960s, Neil H. Borden recognized a total of 12 variable marketing elements. According to Borden, if these elements were applied and controlled correctly, they held the potential to make a business operation profitable. 
• Then, Jerome McCarthy, another American professor and author, streamlined Borden ’s marketing mix and condensed it into 4 broader categories - the 4 Ps.
• These were product, place, price and promotion.
• In 1981, two modern academics - Booms and Bitner - extended the 4 Ps to include three more elements. 
• Today, this alternate composition of the marketing mix is accepted widely as the service marketing mix, and it consists of the 7 Ps of marketing. 
• They include the 4 Ps and three other elements, namely physical evidence, people and processes.