Marketing is one of the most important disciplines for small businesses to master. Successful marketing campaigns can be the difference between lasting success and swift failure. They depend on the right marketing mix.
To that end, it’s important to understand and utilize the main principles of marketing to establish a solid strategy. When used well, you’ll be in a better position to gauge and establish demand, create marketing collateral, and attract your target audience.
In other words, when you learn the principles of marketing, you give yourself a better chance at success.
What is the marketing mix?
The marketing mix is all the tools and activities a brand uses to achieve its marketing objectives. It originally included the 4 Ps of marketing but was later expanded to the 7 Ps.
Beyond the ‘Ps’ it’s the approach a business takes to market its products and services. It includes the channels used, the way each of the ‘Ps’ is implemented, and human resource allocation. It’s an essential concept that plays a large role in whether or not marketing campaigns are successful.
4 Ps vs 7 Ps in your marketing mix
There are two main philosophies that make up the marketing mix. The first one is called the 4 Ps and is older. An expansion of the 4 Ps is the 7 Ps. Neither one is better than the other but they do have advantages and disadvantages.
What are the 4 Ps of marketing
The 4Ps of marketing are part of an overall marketing mix that includes the product, price, place, and promotion. E. Jerome McCarthy coined it in 1960, but the main concepts were created by Neil Borden and have been used by a large number of organizations since inception.
The way you utilize and make decisions related to the 4 Ps is greatly influenced by the internal and external environmental factors affecting your business. For example, if you’re marketing to a low-income audience, you may reduce the price but increase it for an affluent audience without changing the product too much.
One thing to keep in mind is that the 4 Ps are better suited towards product businesses as opposed to service businesses. That’s because they don’t take into consideration the intangible aspects of service delivery.
What are the 7 Ps of marketing
The 7 Ps of marketing were created in 1981 – about 20 years after the 4 Ps – by Booms & Bitner. It adds people, processes, and physical evidence which expands its usefulness for businesses that don’t sell physical products.
Though it was created to expand the philosophy to include service businesses, it’s recommended that every brand use all 7 Ps in their marketing mix. This is true whether you have a service-based business or a product-based business.
In the end, whether you use the 4 Ps or the 7 Ps, it’s more important that you create a marketing mix that serves your business. Let’s look at the individual Ps and how they’re used.
Elements of the marketing mix explained
A rundown of the 7 Ps. The first four are considered the 4 Ps and all of them together are the 7 Ps.
Product, in this instance, can also be substituted for service. It’s any good that you seek to sell to a market that meets an existing demand. Conversely, it can also be a good that you develop in order to meet the demand that you intend to create.
The second scenario is more difficult and usually requires a large number of resources and intimate knowledge of demand generation techniques. Most small businesses will create products and services to meet existing demand which is perfectly alright.
To be successful in the product stage, it essential to understand the Job To Be Done associated with the product. For example, someone pays for service to send fax from emails but the job that’s getting done is communicating with customers to produce sales.
Another factor that should be considered by marketers and business owners is the product lifecycle which includes:
How will you handle each stage and slow down the decline process? How will the product itself and the messaging change along the way?
Price is one of the most important principles of marketing and will impact the type of customer you attract, the number of customers, and even the messaging you use to promote your product. Price is determined by the type of product you have but, more importantly, the real and perceived value of the product.
The power of perceived value is illustrated best in the fashion industry. A white t-shirt from a brand like Louis Vuitton (LV) can sell for hundreds of dollars while one that’s not too different in quality can sell for $10 at Target. The perceived value is vastly different but the LV shirt appeals to a much smaller customer base.
There are many pricing strategies to choose from but there are a number of factors to always take into consideration:
- Positioning in the market
- Price of your competitors
- Cost of raw materials and labor
- Fixed cost
- Number of units you can sell
A price sensitivity survey can help you make the most of this process. Keep in mind that the pricing strategy you adopt at the beginning of the product lifecycle can be different from the one at the end of the product lifecycle.
The internet has made it possible to open an online storefront and sell products and services all over the world. This has reduced the emphasis on place in marketing decisions. With that being said, it’s often an advantage to choose an initial geographic region to service and expand from there.
This may be due to government regulations, testing your business model, or simply limited resources. Whatever the case, place – as a principle of marketing – includes the geographic region as well as placement in ads, in display shelves, in stores, catalogs, etc.
Wherever it’ll be easiest for your target customer to locate and purchase your product is where it should be placed.
The promotion ‘P’ includes all the activities you engage in to get the word out about your product. While building awareness, you’ll also be instilling buying beliefs and making the case for why people should pay a certain amount for your product.
When the 4 Ps and 7 Ps were invented, there were limited promotional channels available for marketers. Print, television, billboard, and radio advertising were the most popular.
Today, there are many more options to choose from, such as PPC ads, social media marketing, influencer marketing (learn more here), sponsored content on publications, a company-owned blog, etc.
In the digital world, sponsored ads, product reviews, and programmatic paid advertising are a few examples of things that have replaced newspaper and magazine advertising of the past. Your product, budget, and price point all play a role in the promotional channels you choose.
This marketing principle deals with your internal environmental factors. The people at your organization, the skills they have, and the weaknesses. Understanding these things will make it possible to fill gaps in competency and also avoid the wrong marketing channels based on your current abilities.
It goes beyond the people on your marketing team. Everyone at your organization from the customer service reps and to the CEO has a role to play in selling your products and retaining customers. If they’re poorly trained or don’t meet the needs of the customers even the best marketing campaigns will fall short.
Processes are the activities you engage in to deliver a product or service to your customer. They can be visible to the customer like when someone is getting a tattoo or invisible to the customer like when you ship goods from a warehouse.
When you audit your process as part of your marketing mix, you’re looking at two things:
- Can it be made more appealing to the customer
This is usually applicable to service businesses. The goal is to understand their experience and make it more enjoyable or seamless. For example, can you improve new client onboarding? Is there a way to communicate more often without increasing your workload? Would structured client education be beneficial to your outcomes?
- Are there any areas you can make it more efficient
This applies equally to service and product businesses. For example, can you get better rates on shipping or reduce shipping times? Can you negotiate a better payment processing fee and pass on the savings to customers (or keep them for yourself)?
In the end, you’re looking for ways to minimize costs on your part and maximize the benefits for your customers and clients. Not all processes can be optimized but that’s not necessarily a bad thing. For example, if you create hand crafted leather goods, the fact that it takes time and is unique may be a reason to charge more for your products.
Physical evidence includes everything your customers see when interacting with your brand. It doesn’t have to be physical at all – it can be digital as well. The goal of physical evidence is, in part, to establish that you’re a real business entity – whether you’re online or offline. Another goal is to confirm a transaction took place.
What counts as physical evidence?
- Brand collateral like logos, designs, customer imagery, etc.
- The design of your office or physical storefront
- Business cards
What an individual may consider physical evidence is arbitrary. You may accept a website as physical evidence but another person won’t be convinced until they see an active social media feed. The bottom line is that you should check off all the boxes – as any legitimate business would – by creating a cohesive experience.
Final word on the 7Ps of the marketing mix
The marketing mix, also known as the core principles of marketing, is an important concept that forces you to analyze a market objectively. When used properly, it can help you launch effective marketing campaigns that grow your brand faster. The marketing mix includes:
- Physical evidence
Each one works in tandem with the others so it’s not advisable to prioritize one and ignore the rest. They’re all pieces to a single whole. Let me know how the marketing mix has impacted your business or if you have any questions in the comments and don’t forget to share.