The Four Ps of Marketing: Strategy, Theory, and Practice

Introduction: The Customer-First Philosophy

Schewe and Haim (1998) provide an overview of the field of marketing, tracing its roots and development through the end of the 20th century. This era set much of the foundation for how marketing works today, although the modern marketing organization leverages technology in ways that were unavailable to practitioners at that time. Schewe and Haim make the case that marketing is a critical element of business success, but that the marketing function need not be the exclusive work of a marketing department. They argue instead that the core essence of marketing lies not just with attracting new customers, but also with ensuring the satisfaction of existing ones.

The inherent logic of this argument is fairly straightforward: marketing is about revenue generation. There are two components to revenue — new business and repeat business. To take a holistic view of marketing is to recognize this reality and build strategy around it. Evidence shows that the cost of retaining an existing customer is much lower than the cost of attracting a new one. A customer relationship is inherently a valuable one — a company must continue to deliver value to the customer in order to continue earning revenue (Buchanan & Gillies, 1990). Customer satisfaction often comes down to marketing principles — the same appeals made explicitly during the marketing and sales processes continue to be made on an implicit level once someone becomes a customer (Rust & Zahorik, 1993).

This is what Schewe and Haim mean when they say "customer first, last and always" — marketing is always about the customer. All efforts of the company are, in one way or another, about the customer, and thus all should be carried out with a marketing mindset.

Who Is the Market? Segmentation and Buyer Behavior

Schewe and Haim provide a framework for understanding the market. They explain how marketers typically break the market down into manageable, understandable segments and describe the process of profiling customers — this allows marketers to work with target markets or personas as a means of understanding who the customer is and gaining a better sense of buyer behavior. They outline what are essentially six types of buyers based on behavioral style: the initiator, influencer, decider, buyer, consumer, and evaluator. For many transactions, these roles might be filled by the same person, but that is not always the case.

In general, when a purchase is larger or requires a greater level of deliberation, many of these roles will be filled by different people. In a B2B transaction, there are almost always at least these six — if not more — people involved in the buying process, and the buying cycle can take months as a result.

Another element that Schewe and Haim analyze is culture. In their view, variables such as culture and social class can matter significantly, and these are variables that are relatively easy to understand because they relate to data derived from the census. The key takeaway from this discussion is that the roles marketers must be aware of are unique to each product and transaction — it is of utmost importance that the marketer understand which roles apply to their specific transaction and set out a marketing strategy accordingly.

The Four Ps: Product and Positioning

The four Ps of marketing are product, position, price, and promotion. These form one of the most fundamental concepts in the field. Schewe and Haim (1998) discuss positioning in terms of understanding the target market. First, a marketer should know who the target market is and develop a sense of that market's behaviors. Then, the marketer can begin to think about what positioning to adopt. In a sense, the product will dictate that. But there is also a role here for the Product Marketing Manager — a position that specifically takes information gained from marketing efforts and helps product teams translate it into new products or enhancements to existing ones. An example of positioning for a target market, as Schewe and Haim discuss, would be an airline that launches a budget division. The airline might be satisfied with its core business but recognize an opportunity for a budget division offering slimmer margins and higher volumes — and risk losing customers if it fails to offer this option. The airline is then designing a product specifically for a new target market, one for which it presumably has no current offering.

Kawasaki (2006) argues that one of the best approaches to the product side of the marketing mix is to develop disruptive products. This is more difficult than it sounds, but the underlying principle is sound. A company that markets products offering little that is distinctive will typically struggle to win customers away from established competitors. The product aspect of the marketing mix needs to be disruptive in some way, and that is really just the starting point for marketing excellence.

Ries and Trout (n.d.) argue this point on several fronts. First, they contend that leadership is the best approach to marketing — being the innovator in a category, or at the very least finding something that the company does better than the competition, whether that is the product itself, the pricing, or the promotion. Some element of the marketing mix should be a genuine strength. With product leadership, there is at least something around which the marketing team can build, and it will be difficult to succeed without some form of competitive advantage. They follow up this argument with the observation that just because a company or product is the market leader does not preclude a strong number-two competitor. Often there will be a weakness in the leading product, and a company can succeed by exploiting that weakness. However, as Trout and Rivkin (2006) point out, there must be genuine differentiation in order to carve out this niche; without it, a company will have a much more difficult time succeeding in the market.

Promotion: Influence, Buzz, and Word of Mouth

Cialdini (2009) discusses the promotional aspect of marketing at length in Influence. He argues that there are several different sources of influence, including social proof, liking, authority, scarcity, commitment, and reciprocation. On a broad level, he is essentially saying that humans are influenced by other humans. If a company can cultivate this influence, it will be more successful in its marketing efforts. A great deal of marketing promotion — particularly with respect to messaging — is about creating influence. Consider the timing of a new product launch: the goal is first to get early adopters on board, and if that is achieved successfully, it lays the foundation for broader adoption. In the social media age, a company can release a new product, generate some initial social media activity, and then seek the attention of known influencers in the field.

Take a microbrewery as an example. If the brewery wants to release a special beer, it can leverage influencer dynamics to great effect. It would start by bringing in local beer bloggers, reviewers, and the operators of well-regarded bars and bottle shops that enthusiasts frequent. These are the influencers — they might actually purchase very little of any single beer, but they will influence thousands of consumers. A few dozen people receiving a complimentary bottle can influence thousands because they carry credibility. If some of them write about the beer online, that generates social proof and authority. Combined with scarcity, that beer might never be highly profitable on its own, but it can increase the brewery's prestige in ways that carry over to its other, higher-volume products. And this is achieved through just one element of the product launch — one that costs very little — simply by understanding the roles that different consumers play in the promotional process and shaping the messaging and strategy accordingly.

Cialdini rightly points out that marketing has a large psychological element, and it is worth noting the sociological dimension as well. The psychology of the buyer is rooted in being convinced by arguments, but Cialdini does not fully address that these arguments are often sociological in nature — so many times it is people convincing other people, and usually indirectly. If a marketer can successfully influence the influencers, there is enormous power in that dynamic.

Schewe and Haim (1998) also contribute to the discussion about promotion. Much of their discussion focuses on the enterprise domain and on advertising. They note the need to cut through the noise — companies must create unique and memorable advertisements that resonate with people. An interesting addendum to this view of advertising as the primary vehicle for promotion is the role that social media plays in the modern environment. Contemporary marketing practitioners discuss extensively how companies use blogs and social content to attract customers. Advertising as a form of promotion still thrives in platforms like Google, but the emergence of inbound marketing has introduced modern forms of promotion that also deserve consideration. Modern promotion taps into the core of what promotion has always been — getting your name out there and conveying a company image — while also driving traffic to a website and using that website to sell directly to consumers.

Rosen (2006) discusses the role of word of mouth in a promotional plan. Word of mouth is one of the most unpredictable phenomena in marketing — you cannot control exactly how it will flow, but you seek it out and want as much of it as possible. Marketers therefore try to create conditions that encourage it, and develop proxies such as testimonials and trust marks that help generate it. When Rosen discusses buzz, he is really talking about creating evangelists — customers who will promote a product or service on the company's behalf. When that occurs, the cost of acquiring new customers tends to drop, and the positive buzz produces an amplification effect on the rest of the marketing program.

Godin (2006) elaborates further on this concept, and it circles back to product. The often-overlooked P in marketing is that it genuinely helps to have a great product; you can do so much more with something that is innovative and effective. Godin points out that the goal is to make a product that people will actually talk about, rather than simply claiming to make a remarkable product. There is a difference, and that difference places real emphasis on marketing and messaging — ensuring that the product genuinely lives up to what is being communicated about it.

Conclusion: Aligning the Marketing Mix

There are many important takeaways from the marketing literature reviewed here. One that stands out — as much for its relative absence from the literature as for its importance — is place. The distribution function is not perfunctory; it can legitimately add value and serve as a competitive differentiator. Because of this, it should not be given short shrift. Promotion is undeniably engaging — it is visible, creative, and present in consumers' daily lives — but it is equally important not to overlook the other elements of the four Ps, each of which carries significant strategic value.

Each element of the marketing mix is critical to ensuring successful marketing outcomes. The central challenge is aligning these different elements with one another. There is also a need to remain attentive to modern techniques, including internet-based and inbound marketing strategies, which have transformed how companies reach and engage their audiences. At its core, the four Ps framework remains a key organizing principle of marketing strategy, and the various considerations within each element — from product differentiation to distribution excellence — are what give that framework its practical power.

References

Buchanan, R. & Gillies, C. (1990). Value managed relationships: The key to customer retention and profitability. European Management Journal, 8(4), 523–526.

Cialdini, R. (2009). Influence. HarperCollins.

Godin, S. (2006). The purple cow. In The Marketing Gurus. Penguin: New York.

Kawasaki, G. (2006). Drive the competition crazy. In The Marketing Gurus. Penguin: New York.

Raphel, M. & Raphel, N. (2006). Up the loyalty ladder. In The Marketing Gurus. Penguin: New York.

Ries, A. & Trout, J. (n.d.). The 22 Immutable Laws of Marketing. In possession of the author.

Rosen, E. (2006). The anatomy of buzz. In The Marketing Gurus. Penguin: New York.

Rust, R. & Zahorik, A. (1993). Customer satisfaction, customer retention and market share. Journal of Retailing, 69(2), 193–215.

Schewe, C. & Haim, A. (1998). The Portable MBA in Marketing (2nd ed.). John Wiley & Sons: New York.

Trout, J. & Rivkin, S. (2006). Differentiate or die. In The Marketing Gurus. Penguin: New York.