What are the 4 Ps of Marketing? Everything to know in 2024)

The four Ps of marketing are Product, Price, Placement, and Promotion. In the marketing terminologies, these four P’s are collectively known as Marketing Mix. Nevertheless, many people still have questions like what are the 4 Ps of Marketing?

These 4 P’s are major factors impacting the sales of any product and getting positive response from the customers. If you are a product-based business owner or planning to operate a product-based business, you must first understand these 4 P’s in marketing. This marketing mix provides a framework that any company can use to leverage their marketing strategies and overall sales.

In this article, we have explained almost everything that businesses need to know about the 4 Ps of marketing. Remember that this Marketing Mix remains constant in both digital and physical marketing strategies.

Basic Introduction to the 4 Ps of Marketing

In 1960, an American marketing professor and author E. Jerome McCarthy first proposed the concept of 4 P in marketing. However, its popularization started once Phillip Kotler wrote about this in one of his books.

Since then, the 4 P’s theory has become popular as the major pillar of marketing throughout the world. Almost every brand and business in the world started managing their inventory and stocks based on the Marketing Mix. Let us take you through all the P’s in this section:

Product

The first P amongst the four Ps of marketing is Product. Creating a campaign, and starting a business, The first step towards Marketing is coming up with a product that has the potential to solve the problems of the people or make their lives easier.

Can you imagine marketing if you do not have a product in the first place? Well, that’s not practical at all. So, to step foot into any marketing strategies (both physical and digital), a company must have the product they want to sell.

Here are a few questions about products that we recommend companies ask while creating or finalizing any product:

Who are the potential users of that particular product?
What features will the product offer to that group of users?
Are there any competitors selling the same or similar products?
If there are competitors, does your product have the features to compete with the existing product?

Once a company lists these questions, discusses them with the internal staff, and analyzes the answer, the product is ready to be dropped. Only then can the company move forward with the other three P’s of marketing.

Price

Once a company has finalized the product, the company needs to set a certain price for customers to purchase the product. This is also one of the most crucial factors to determine whether your product sustains the market or not. Marketers must be aware of every aspect of their products before setting a selling price.

Here are a few major things that companies must be clear of before pricing their product:

Calculation of the production costs, labor costs, supply costs, and all the other expenditures they have done for the creation of that product.
For what price are the competitors selling similar products in the Market?
Will the targeted customers spend that specific amount of money for that specific product?
Does your product have the quality that can justify the pricing you have thought of?

These questions will help the company come up with a profitable yet reasonable pricing for the product. Moreover, this also helps in another P of the marketing, Promotion. There are several strategies that companies use to set prices for their products.

Let’s check them out here:

Price Penetration

In this strategy, the company sets a relatively lower price to penetrate the market. This happens in cases where bigger competition already exists for selling the same or similar products. Due to this strategy companies can quickly grab the attention of huge market share and increase the customer acquisition rate.

In the context of Nepal, let’s take an example of Hyundai’s Ioniq 5. At first, two variants of this electric vehicle were launched in Nepal by the Laxmi Hyundai Group with a price tag of 80.96 lakhs and 81.96 lakhs. This helped this electric vehicle catch the eyes of several car lovers and enthusiasts in Nepal and gained many customers. However, after a few months of sales, the Hyundai Ioniq 5’s cost increased by a whopping 44%, and the new price was set to be 1.16 Cr.

There are so many other examples of price penetration because this certainly is one of the best ways to lure customers to your products and know your brand.

Price Skimming

Price Skimming is a strategy where the product’s price is set high at the time of introduction. This strategy targets the group of people who are ready to pay a high amount of money for the goods that they want. Therefore, Price Skimming is also a great opportunity to establish a brand as a luxury brand with prices set a little higher than the regular ones. As time goes on, the company can opt for lowering the price to target even the price-sensitive group of people.

For Price Skimming, we can take a hypothetical example of Apple’s iPhone. When Apple launched their first iPhone back in 2007, they priced it for $599, which was significantly higher than any other smartphone in the market. This helped Apple to tap the market of people who are into premium products. With the price skimming strategy, Apple was able to gain a huge profit margin from the iPhone. This gave Apple an identity as a premium brand and also helped them gain loyal customers.

There are several other examples of how price skimming has helped brands establish a premium reputation. However, remember that this tactic only works for the brand trying to establish itself as a premium and high-end brand.

Competitive Pricing

You might have understood the concept of this pricing strategy just by the name. In this strategy, companies tend to set the price based on the price of the same product set by their competitors. Here, if the competitors are selling a certain good for Rs. 100, the company sets the price slightly lower than that. In this way, the company can gain the attention of regular buyers. This helps the new entrants gain the customer acquisition rate as they prefer buying the same product at lower pricing.

Let’s take a hypothetical example of this strategy. Imagine that a person named A plans to start a furniture showroom. For that, he first does some market research and finds out the price set by his competitors. Now, he has decreased his profitability to set a price lower than that of his competitor. This strategy helps him attract more visitors and establish a brand for furniture items.

Using this pricing strategy, businesses can leverage the number of customers to attract their competitors’ customers and gain their trust.

Placement

After you have finalized the product and its price, the challenge is to place the product so that it catches the eyes of the targeted customers. Customers will also buy the product if your product is placed right in front or at least close to their vision. Without placing your product at the correct place, you cannot expect the customers to search for your product specifically when they can get so many similar products.

Let’s take an example of a shopping mall like BigMart. As we enter BigMart, we see chocolates right in front of the counter, placed at the lowest height. That is because the targeted consumers for chocolates are the children. Also, the essentials like rice, flour, etc are kept at the end of Big Mart. The strategy is to lure people to add more products to the cart while they reach where rice and flour are kept.

Remember that customers and consumers are two different things. A customer is someone who pays for your product and buys it. However, a consumer is someone who actually uses or takes advantages of your product. For example, in the case of chocolates, the parents who pay for the chocolate are the customers but the children who actually eat the cholocates are the consumers.

With this strategy, companies can put their products in front where customers notice them and tend to buy them if they need similar products.

Promotion

The final P of the 4 Ps of marketing is promotion. Promotion simply means running advertisements, campaigns, and branding to help your product knock on the doors of potential customers.

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Promotion means communicating different aspects of your product, brand, and the motive for launching that specific product. With marketing and advertisements, companies can let potential customers know about the benefits and the value of their product. In simple words, promotion covers a range of activities to raise awareness, generate interest, and ultimately drive sales.

How to Utilize The 4 Ps of Marketing for your business’s growth?

Now that you have understood all the 4 Ps of marketing, you must also know how to use these to get better results and generate higher revenue. For that, we have listed out a few ways to utilize all 4 of this marketing mix: