The 4 Ps of Marketing

During PriSim’s business simulation courses we ask participants to think about the future of their company and where they want the company to be at the end of the exercise. This leads participants to ask, “Who is our customer?” and more importantly, “What does the customer value?”[1] To help them answer this last question we suggest participants use the 4Ps of Marketing. The 4 Ps framework, also referred to as the “Marketing Mix”, focuses participants on 3 elements that create value for the customer[2]:

  • Product (or Service) – What is being sold that satisfies the customer’s wants/needs.
  • Promotion – How/what is communicated to the customer regarding the product/service.
  • Placement – Where/how the product/service will be sold/distributed.

The final element of the 4Ps is:

  • Price – How the value generated to the customer is captured by the firm. It is the amount charged for the product/service.

 

The 4 Ps framework states that the customer is willing to pay a price less or equal to the value created by the Product, Promotion, and Placement.
4 Ps of Marketing

The goal is to create enough value to command a price that covers the costs of the product/service and thus generating a profit for the company.

The 4 Ps are easy to remember but nothing says that there are only 3 value creating activities for the customer that can be accounted for. Many have called for an expanded framework[3].

For example, the 4Ps for an Insurance Brokerage might look like:
4 Ps Insurance Brokerage

 

For an Aerospace and Defense company it might look like:
4 Ps A&E

The 4 Ps remind participants that at the heart of the business is the customer and what they value. It drives home the point that you aren’t in the business of pleasing everybody but deeply pleasing your targeted customers. What are the 4 Ps of your company?

 

 

 

 

 

[1] Two of “The Five Most Important Questions You Will Ever Ask About Your Organization” by Peter Drucker

[2] Dolan, R. J.2014, “Framework for Marketing Strategy Formation”, Harvard Business Publishing, pp. 6.

[3] https://en.wikipedia.org/wiki/Marketing_mix#cite_note-:0-

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