A business’s marketing plan is a living, breathing thing. Even after you’ve come to a consensus on the best course of action for your business’s goals, it’s essential to evaluate and reassess your organization’s activities continuously. To properly develop and refine your business’s strategy, you need to understand the 7 P’s of marketing. These pillars help you to prepare, measure, assess, address and achieve the goals you’ve set out for your business.
In the following sections, you will be introduced to the marketing mix, the 7 principles of marketing, how the 7 P’s affect your marketing plans and how you can use these elements to create the best marketing mix for your business.
The 7 P’s of Marketing
Collectively, the 7 P’s of marketing are product, price, promotion, place, people, process and physical evidence. At their core, they are the building blocks needed to establish a marketing plan capable of helping your company achieve the business and marketing objectives you’ve laid out for a specific period of time.
E. Jerome McCarthy initially introduced the 7 P’s in the early 1960s as the 4 P’s. These were later expounded upon by Bernard H. Booms and Mary J. Bitner in 1981 to be more inclusive of service-based businesses.
The Traditional Marketing Mix
The Extended or Services Marketing Mix
|E. Jerome McCarthy, 1960||Bernard H. Booms and Mary J. Bitner, 1981|
What is the Marketing Mix?
The marketing mix is a tool businesses and marketers use to determine the go-to-market strategy for a brand, product or service. The marketing mix originally consisted of only four elements known as the 4 P’s—product, price, place and promotion. These elements focused primarily on businesses operating in a B2C (Business to Consumer) industry.
Today, the term marketing mix includes three additional marketing P’s—people, process and physical evidence—covering companies operating in the B2B (Business to Business) space, as well as incorporating new technologies, measurement and other customer centricities.
Product is the combination of any goods and/or services provided by your company to your intended customer. When it comes to product, your task is to objectively determine whether or not the product or service you are evaluating is right for both the business and your customer.
During this stage, you need to anticipate any and all challenges the product may face before it has been delivered to the customer. Asking questions like, “Is this product appropriate for our customer right now?,” “How does this compare to what our competitors offer?” and “How would I feel as a consumer interacting with this product or service?” help you accomplish this task. Your objective is to troubleshoot any issues before your customers ever have the chance to experience them.
Price is the cost asked of a customer in exchange for a good or service. While your goal is to make a profit on a product or service to manage the preparation costs of these items, you need to consider the value perceived by the customer. The needs of both parties will dictate how you approach your marketing strategy.
One way businesses attract new customers and increase volume is by lowering prices. While the intended goal may be reached, the price decrease may also reduce the perceived value of the product, ultimately preventing your business from seeing the same type of sales volume once you inevitably raise prices in the future.
Establishing a price is a delicate balance. With so many variables at play, your business needs to be aware of, and adaptable to, the number of customer needs, market factors and industry trends that impact each pricing decision. The best approach is to be open with your valuations and keep an eye on your competitions’ actions.
Promotion is the inclusion of every tactic your business leverages to inform consumers about your goods and services and to encourage potential customers to buy these products. These promotional tactics include, but are not limited to, advertising through traditional (television, radio, billboards, print and transportation media), digital media (Google, Facebook, Twitter and display advertising) and public relations.
The goal of promoting your business is to invest funds upfront to see a return on your investment later in the form of increased sales. As you establish your marketing strategy, it’s important to remember that as time goes on, the tactics that bring the highest ROI today may not work in the not too distant future. The ability to develop new promotional strategies that evolve with your market will help you generate sales regardless of medium.
Place is representative of both the facilities you use to create and distribute a product as well as the outlets where it is sold. There are countless places where your product can be sold. If you sell physical goods, selling your products in a boutique shop makes sense, as does making them available online.
Services, on the other hand, are more effectively promoted in places where your ideal customer spends a considerable amount of their time. For example, if you operate a mobile dog grooming business, it would be wise to drive your vehicle to a local dog park to potentially entice pet owners to groom their dog onsite—this is also a great way to promote your business.
People are the most significant element of any service or experience your company provides. In the 7 P’s, people are categorized as any human who is involved in part of the product handoff or influences the product journey. This includes your employees, customers and any other consumers who may impact the greater public’s opinion of the product itself. Regardless of their role in the process, people interact with every single aspect of your business and must, therefore, be given the kind of attention they truly need.
Because you are unable to control the way consumers in the market will react to your business, it is essential that you do everything in your power to find the right people to carry out your business’s goals. As Jim Collins writes in his best-selling book, Good to Great, you need to “Get the right people in the right seats on the bus,” to truly succeed. With the right people—combined with the right training and the right tools—your business will have the best chance to accomplish each goal you set forth.
Anything that influences how the product is delivered, developed or directed is part of the process. Process accounts for any method of operation that gets a product from conception to the consumer, covering every element of the 7 P’s.
While process may be most commonly associated with production flow, each part of your business benefits from having a proper methodology in place. These measures are designed to ensure the optimal experience for customers and employees, no matter where they fall in the product lifecycle.
Roughly half of the 7 P’s of marketing we’ve reviewed are intangible concepts. Physical evidence, however, is clear in what it truly is—physical. Physical evidence contains anything that is used or needed to deliver a good or service. This includes your website, business cards, signage, dinnerware at a restaurant, packaging as well any type of receipt.
Ultimately, physical evidence is proof that a service or good was delivered. One of the best examples of physical evidence is the way Apple delivers their products. When a consumer opens a new product, each part of the unboxing experience is taken into consideration. How it is presented tells a story to the user, building excitement with each element until the device is revealed. Whether you’re a manufacturing company or a grab-and-go cafe, how you allow the consumer to “remember” you is heavily supported by physical evidence.
How to Determine Your Business’s Marketing Mix
Identifying your marketing mix is one of the keys to generating sales and establishing the right customer base. To do this, you’ll need to understand your sales funnel beginning with identifying your target customer, setting your goals, confirming the tactics that you’ll use and how you’ll measure success.
1. Describe Your Ideal Customer
Write a one- or two-sentence description of your target customer detailing key demographics—age, location, occupation, etc.—and any other specifics that are important to your business.
2. Outline Your Goals and Budgets
Outlining your goals starts with one simple question: What results do you need from your marketing strategy? These results could be as simple as generating 10 new leads a week or as ambitious as increasing email sign-ups by 400 percent. During this step, you will need to establish your objectives and set your advertising and marketing budget.
3. Choose Your Tactics
Once you’ve set your goals, you need to decide how you will reach your targets. There are plenty of channels where you can reach your customers, including online advertising (Google Adwords, Facebook and display advertising), email marketing, direct mail and traditional advertising (television and radio). Select tactics that put your business in the best position to reach your target customers. Choose tactics that are cost-effective and can scale with you as you grow.
4. Establish Your Metrics
After deciding which tactics best fit your marketing mix, determining “what success looks like” is vital. Remember, each tactic needs to align with a goal and fit within your budget. While a direct mail campaign might look spectacular during the design stage, it’s not worth anything if you can’t apply tangible results to your efforts or if it exceeds your financial allocations.
How You Can Use the 7 P’s
By using the 7 principles of marketing methodically, you can create a terrific framework for developing a marketing plan that shields your business from strategic stumbles. To properly apply this approach to your business and determine whether your marketing mix is appropriately balanced, ask yourself the following questions:
|Product||How can the business improve its products or services?|
|Price||What changes can we make to our pricing model that would increase sales and perceived value?|
|Place||How—and where—can we enhance our customer’s experience through new areas of distribution?|
|Promotion||How can we augment our current combination of paid, owned and earned media?|
|Physical Evidence||How can we reassure our customers through our employees, facilities and branding materials?|
|People||How can we continue to improve the skills our people have to better the customer experience?|
|Process||How can we improve the systems and methods in place to create more efficiencies and increase profitability?|
Putting the 7 P’s to Work For You
Your business is constantly reevaluating your marketing needs based on your results. By understanding the 7 P’s of marketing and the marketing mix you are in a better position to address and achieve your business’s goals.
The 7 P’s inform every function of your business and provide a pathway to success. By matching each of your goals to one of the P’s, you stand to be better prepared for the opportunities ahead.