In 1960, Edmund Jerome McCarthy proposed the four Ps of the marketing mix in his book Basic Marketing: A Managerial Approach. His four Ps were price, promotion, product, and place. In 1980, Philip Kotler’s book, The Principles of Marketing expounded on McCarthy’s proposition.
Since then, several marketers have proposed a fifth P. Some have proposed “people” as the fifth P, others have suggested “personalization,” and Kotler himself is rumored to call his fifth P “purpose.” A brave few have even recommended “profit” as the fifth “P.”
I love the original four Ps, and I think “people” is a fitting fifth P. But only because I’m not a misanthrope, so don’t take my word for it. So if you’re still reading this after my indisputable bias, let’s dive in.
Without a product, there won’t be any marketing. Talk about a marketing mix would be wishful thinking at best, and a hallucination at worst. And products here apply whether you’re a manufacturer or retailer.
Consider some quotes from business experts to support this:
“Price is rarely the most important thing. A cheap product might sell some units. Somebody gets it home and they feel great when they pay the money, but then they get it home and use it and the joy is gone.”Tim Cook
“A market is never saturated with a good product, but it is very quickly saturated with a bad one.”Henry Ford
“Don’t find customers for your products, find products for your customers.”Seth Godin
Granted, if you’re willing to do some research, you’ll find other great quotes on why promotion, people, price, or place are the most important “P” in the marketing mix. It’s like performing a Google search for “the most important finger.” Just so you don’t run off to check, here’s an overview:
Some say it’s the pinky finger, others say it’s the index finger, some say it’s the thumb. And you know the best part? Some of these are based on studies or expert opinion.
But do you need an expert to tell you that all your fingers are important and you’d rather not have any chopped off? Yeah, I thought so too.
When you create an excellent product people need and are willing to buy, it simplifies the other Ps in the marketing mix for you.
For example, people buy luxury cars because of their build quality and overall consumer experience. And let’s admit it, sometimes they buy it to show off.
When you’re creating or selling quality products, the price will not deter your customers, but more on that later.
For now, research your market to identify what problems your products solve better than the competition. That will help you decide features of the product that are most valuable to your customers. Additionally, you’ll determine how to make it better than the competition and endear your customers to it.
Whatever you do, don’t skimp on creating a great product. You’ll be happy you didn’t.
The price of your product determines what type of people will be drawn to it. And by extension, if they’ll buy your product.
The right price for your product also enables you to decide what additional features, if any, will be made available at a particular price point or with a particular plan in the case of Saas businesses.
These are the details on the pricing page for the popular project management tool Trello.
Though the free plan is useful and usable, it has limited features when compared to the business class plan or enterprise plans.
For software or most subscription-based businesses, their price will often be determined by the features or value you’ll get from your subscription. For manufacturing companies, I like to think that the prices differ because of the components used in creating the product.
Often, in the real world, it’s supposed to go this way:
High-quality products=high prices
Low-quality products=low prices
Unfortunately, that isn’t always the case.
Because some businesses can consistently maintain low production costs, so they can efficiently compete with other businesses on price. Again, this isn’t a reason to underprice your products if you’re sure they’re valuable.
For example, the average cost of producing the iPhone 11 pro max released in 2019 was an estimated $490. But the phone, depending on its storage size and whom you’re buying from, sells for anywhere between $1,099 to $1,449. So while they only control 14.5% of the global smartphone market share, they took home 66% of the profit.
“Quality in a product or service is not what the supplier puts in. it is what the customer gets out and is willing to pay for. A product is not quality because it is hard to make and costs a lot of money, as manufacturers typically believe.”Peter Drucker
Still, I know, you’re not Apple Inc., but when you’re pricing your products, always realize you don’t need to be cheap even if your cost of production is lower than the competition.
And remember that no matter what you sell, there’s always going to be someone who charges more for an inferior product or service. Or just charges more for the same products or services. Sometimes way more.
I once had a client who paid an agency $20,000 monthly for content marketing services for three months. At that price they got eight blog posts of 1,500 words at most, and one lead magnet in the three months.
No strategy. No promotion. No SEO. Nothing else.
Well, on the plus side, I learned that I was seriously undercharging for my services. But at my current rates, I’m still not charging $1.67 a word—at least not yet.
Think of a pricing strategy that’s most fitting for your product. Sometimes you can just simply model your base price after your competitors. That’s probably why Moz, Ahrefs, and SEMRush all have their lowest plans pegged at about $100 per month if you’re paying monthly.
Regardless, not all SEO software is priced this way. So don’t copy your competitors just because you feel like doing it, or you feel they’re doing the right thing. Test different price points to determine what works best for your business.
Before you create your product, you likely may know what roles other people will help you play in your business. Think manufacturers, developers, engineers, salespeople, marketers, customer service reps, contractors, freelancers, etc.
For example, if you’re launching a new product, you may need more customer service reps to handle the influx of calls and messages you’ll get from customers and prospects.
This doesn’t necessarily require hiring more customer reps per se, because other members of the team who are less busy during the launch can often pitch in to help. But this will vary from business to business.
It reminds me of this excerpt from a post I wrote:
“Sometimes your competitors are not doing better than you are because of the tools and software they’re using or the blogs they’re reading; they’re doing better because they have a better team.
If you have a mediocre team, even if you use all the tools and software your competitors are using, you’ll still get terrible results. And this applies whether you’re working with an agency, freelancers, or in-house employees.”Iniobong Eyo
Research from PWC (opens as PDF) shows that customers are willing to pay up to 42% more for a friendly, welcoming experience. And 32% of customers will stop doing business with a brand they loved after one bad experience.
Hire the best people. Keep them happy. You’ll have happy customers. And they’ll keep coming back to you.
There are a gazillion ways you can reach your customers including but not limited to:
- Content creation
- Referral programs
- Organizing contests/giveaways
- Public relations
- Word of mouth
- Influencer marketing
- Talking about other businesses
Your target prospects (people) will play a large role in what types of marketing activities you’ll use to reach them.
According to Rakuten Marketing (opens as PDF), four out of five consumers have “made a purchase recommended by an influencer through clicking on a link or image that was shared.”
That doesn’t necessarily mean you need influencers, or using them will work for you. What works largely depend on your goals.
If you want brand awareness, for instance, you can use blog posts, infographics, original research, and even guest blogging. Using influencers works well for brand awareness too. With brand awareness, you’re looking at metrics like reach, traffic, content impressions, comments, and mentions.
On the other hand, if you’re after direct response, the metrics will be different. You’ll be thinking clicks, conversions, downloads, leads, subscribers, and ultimately sales. With this goal in mind, advertising, influencer marketing, and sponsored content may be your best bet.
Apart from “people” and your promotion goals, your tactics will also largely depend on your budget. As an example, for 19% of marketers, their influencer marketing budget is $1,000 to $10,000 annually. For 18% of marketers, their influencer marketing budget is somewhere between $100,000 to $500,000 per annum.
Ask yourself: how much can I spend on a particular marketing or promotion strategy that will still leave some money for executing other parts of my marketing strategy?
Understandably, some people will spend most of their budget on a particular marketing strategy that works or they think will work for them. But they’ll always leave room in their budget, no matter how little, for other marketing activities. Or they won’t. But that’s their choice.
Place here refers to the target geographical location of your customers. Realistically, you can target people in your city, state, country, continent, or even the world.
Additionally, “place” also refers to where your customers can purchase your products. For Saas and ecommerce companies, that place is online. Some manufacturers sell products directly from their store or distribute to retailers.
Whether you’re targeting local customers or international customers, you must realize that unless your product is sold online exclusively, you may need to open stores in other parts of your city, state, or country.
While this will depend largely on how much your business grows; for successful businesses, there may be at least some local expansion—the need to open another branch in the same city. Some questions you can ask yourself before you choose a physical location for your business include:
- Is there a large population my business can thrive on for starters?
- Can the people in the area afford my products? Or are they my target demographic?
- Do I share the same values with members of the community?
- Will government regulations allow my business to operate here?
- Can I find local workers to help me run my business?
- Can I bear the costs of running a business in this location?
- Is this location safe for me and my employees?
There are more questions you’ll consider, depending on whether your business is online or offline. However, one thing is sure: Choosing the right location for your business can make or break it.
Why you should care
If you read carefully enough, you’ll notice that there are several reasons why you should care about the five Ps of marketing. But I believe all these reasons can be summed into one: you should care because you want your business to succeed. It’s that simple, and difficult.
Understand that none of your decisions about these P’s will be set in stone. That’s because:
- For your products, you may add or remove some features, or you can create entirely new products
- You can test different price points for your products
- Your ideal employees and vacant roles will change as your business grows
- You will never completely focus on only one marketing or promotion channel for your business
- Your business’ location will change as you grow—whether on the web or offline
But when you grasp the fundamental concepts behind these five Ps, you’re set for long-term business success against the odds.
Since you’re here
My content marketing services can help you with “promotion” in the marketing mix. If you liked this post, you’ll probably enjoy working with me too.