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The Marketing Research Mix

Planning an effective research process.

By the Mind Tools Content Team

To develop a great new product, you need a thorough understanding of your market. This helps you design something that customers really want to buy.

You develop this understanding by conducting market research. But, how should you approach this?

In this article, we'll look at the Marketing Research Mix, a simple checklist that you can use to plan an effective market research project.

What Is Market Research?

Market research is the process of gathering and analyzing information about a target customer group, so that you can develop great products, and then plan a sales and marketing approach that fits the needs of these customers.

You can use the Marketing Research Mix to plan your research.

About the Model

Nigel Bradley developed the Marketing Research Mix in 2004, and he explained it in his 2007 book, " Marketing Research ." Bradley's four stages – his 4 Ps – are:

• Population.
• Publication.

You can use the 4 Ps to design a research project; to organize the results of your research; and to challenge research, so that you can assess its quality.

You can use the Marketing Research Mix with a similar-sounding tool, the Marketing Mix .

Both tools have steps that form four Ps, but, aside from this, the tools are very different. You should use the Marketing Research Mix first, to design your research process. You can then move on to use the Marketing Mix, which helps you market your product to your audience effectively.

Applying the Four Ps

Below, we've outlined each of the four stages in the Marketing Research Mix. The steps are more effective if you follow them sequentially.

Before you start your research, you need to clarify why you are doing it. What do you ultimately need to achieve?

Write a hypothesis – a statement or assumption that you want to test as part of your research. For example:

"Customers in this market are willing to pay a premium for a product branded as 'luxury.'"

Use your hypothesis to design your research process. Aim to be able to accept or reject the hypothesis at the end of your research.

2. Population

This part of the research process focuses on who you will approach.

Think about the following questions:

• Which groups make up this market?
• Which groups will I be able to address in a sufficiently cost-effective way?
• How can I best access different groups' views?
• Who are the major players or the most likely buyers in these groups?
• How should I select research participants?

(See our article on Market Segmentation for more on identifying potentially-profitable segments of your market.)

3. Procedure

The next step is to decide on the research approach that you will use. You'll need to make this decision based on your knowledge of your market, and on the resources available to you.

Think about whether there are "secondary sources" that you can use. Have other teams in your company, or other organizations (including your competitors), carried out research in these areas? What conclusions did they draw?

And have external consultancies or researchers explored these areas? What did they conclude? (Buying this research – or accessing it through a business library – can save you a lot of time, effort, and expense.)

You'll probably also want to use primary research techniques to test your hypothesis.

These are often more expensive than secondary research methods, and they include questioning (using surveys or personal interviews), observation (using focus groups or blind studies), and experimentation (conducting business experiments ).

4. Publication

The last stage in using the Marketing Research Mix is to decide how to share the results of your tests and experiments.

Who needs to see this information – for example, leaders in your organization, sales managers, or your team members? How will you present it to them? And how can you protect your findings from your competitors?

While this stage is quite simple, it can involve a lot of work.

Nigel Bradley developed the Marketing Research Mix and published it in his 2007 book, "Marketing Research." The stages are:

You can use these stages to design and plan an effective marketing research project.

Bradley, N. (2007). ' Marketing Research ,' Oxford: Oxford University Press.

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How to Develop a Successful Marketing Mix Strategy [+ Templates]

Updated: July 28, 2021

Published: July 02, 2020

One of the first things you're taught in your Introduction to Marketing class is that marketing can be best explained using the marketing mix – also known as the four Ps.

They are – and say 'em with me because if you took that class, you know these four words by heart:

However, once you're in your first marketing internship or job, you learn that marketing entails so much more than can be simplified in a four-section marketing mix matrix.

Still, there's an undeniable benefit of marketing teams organizing their work into the marketing mix framework.

When you stray too far away from the four P's, it can be easy to lose focus on your purpose as a marketer.

Marketing truly is about teams and individuals working together to promote a product in the right place at the right price point. Efforts beyond this scope are essential, but they do all stem off of this foundation of the marketing mix.

Here, we're going to dive into what a marketing mix is and how to develop a successful marketing mix strategy for your own company.

What is a marketing mix?

The marketing mix refers to the actions a company takes to market its product(s) and/or service(s). Typically, it acts as a framework for breaking down the four key components of marketing — product, price, place, and promotion.

The marketing mix helps companies organize their marketing initiatives by task and department for more process-driven and impactful marketing campaigns.

This framework has roots dating back to the 1940s and has been evolving ever since. While some elements have been added or tweaked over the years – most notably for the modern digital age – the core elements of the marketing mix (i.e. the four P's) have remained consistent for decades.

Featured Resource: Marketing Mix Templates

Need a way to visualize your marketing mix to share it with your employees or investors? Use these four marketing mix templates to organize your initiatives and activities by the right section. Click here to download them now .

Marketing Mix Elements

When perfected and synchronized, the core elements of a marketing mix provide a well-rounded approach to marketing strategy.

Product refers to what your business is selling – product(s), service(s), or both. The bulk of the work in this element is typically done by product marketers or managers.

Nailing the product element of the marketing mix means doing extensive research and development, understanding the need for the product, developing a product launch plan and timeline, and educating customers and employees – especially salespeople – on the product's purpose.

Price refers to the price point at which you'll sell your product(s)/service(s) to consumers. Arriving on this dollar amount requires consideration of multiple pricing strategies, analysis of similarly priced products in your market, and insights from consumers through surveys and focus groups.

Price speaks to positioning in the market, the speed at which you want to penetrate your market, and your company's revenue goals and profit margin.

In the marketing mix, place refers to where your product or service will be sold. For tangible products, this will include physical locations such as your own store, or a retailer where your product will be resold.

It can also include the other methods where your products can be purchased, like online or over the phone.

4. Promotion

Promotional activities are those that make your target market aware and excited about what you're selling.

While this does include paid initiatives like commercials and advertising, promotion also entails organic initiatives like word-of-mouth marketing, content marketing, and public relations.

Other Elements

While the marketing mix can often be simplified down to the 4 P's, the expansion of the scope of marketing in recent years has resulted in more P's added to the list.

For example, Smart Insights includes the following elements in its marketing mix definition:

• Process , or the large internal initiatives taken to support a product launch, such as including salespeople in goal setting.
• People , which can refer to your buyer, market, and target audience, or your internal team responsible for a launch.
• Partners , or who you'll be working with outside of your company, such as distributors or co-marketing partners.

Some of the other P's can include:

• Payment , or how transactions will be held and processed.
• Physical evidence, or anything tangible pertaining to your product or service, like any materials needed to complete your service or deliver your product.
• Packaging , or anything pertaining to the physicality of your product, like how it looks or how it's packaged.

These other marketing mix elements should be utilized as you see fit for your projects. However, every good marketing mix should rely on a thorough exploration of those first 4 Ps.

Marketing Mix Templates

Fill out the form to get your templates, marketing mix examples from real businesses.

Fintech companies are everywhere, but how many of them focus on organic and non-GMO agriculture?

As sustainable agriculture becomes more top of mind, brands like Mercaris help support agriculture companies looking to stay ahead in the market. Beyond delivering a service, the company identified a niche and launched a business with few direct competitors.

They offer a monthly subscription-based service that arms agricultural companies with the market intelligence needed to compete in the space. This includes detailed reports on food production, commodity prices, and market shifts.

Not long after Airbnb launched, users filed complaints of racism from their hosts and expressed reluctance to use the platform's services. The company implemented measures to appease these concerns. However, it brought attention to an important issue.

It's this uncertainty that allowed Noirbnb to enter the market. The brand tapped into people of color's desire to feel safe and welcomed in their temporary home while traveling – then, they used it as their unique selling position (USP).

The brand even plays on Airbnb's name – which is now a household one – to indicate that they offer a similar service that's been adapted to cater to travelers of color.

Warby Parker

This online retailer of prescription eyeglasses and sunglasses is known for its stylish yet affordable glasses. Warby Parker 's pricing, which starts at $95, undercuts many of its competitors, making it a popular go-to for consumers.

The brand's pricing strategy is based on public perception. In interviews, the founders revealed that originally, they were going to price their frames as low as $45. However, after considering how low prices for items like glasses can be perceived as low quality, they doubled the price to settle at a number that was still competitive.

A brand's pricing strategy can have an important role in how it's perceived in the market. So, it's important to consider what that perception is and if it's the one you want to put out there.

When Canva entered the market, it was every small business owner's dream. You could design any marketing material you wanted for FREE, what more could you ask for?

Eventually, the brand introduced premium versions of its platform. Catering to businesses ranging from small to enterprise-level, they added features like high-quality stock visuals, social media publishing tools, marketing campaign management, and large cloud storage.

Hu , short for "Get Back to Human," is a dessert company that specializes in making organic, paleo chocolate bars free of the junk ingredients we find in big-name products.

The brand has made its products available from multiple major retailers, including Walmart, Target, and Whole Foods. They also have a virtual storefront on Amazon. If stock ever runs out there, you can always purchase their products through their website.

Hu has made its product accessible through multiple channels, maximizing its earning potential while expanding its brand awareness.

The Lip Bar

Vegan beauty brand The Lip Bar leverages influencers and celebrities to promote its products and increase its brand awareness. Recently, the brand partnered with beauty influencer Raye Boyce to announce its expansion into Walmart stores and its nine latest products.

The Lip Bar places women of color at the center of its products and collaborating with a Black influencer known for her love of lipsticks is in perfect alignment with the brand's identity.

Beyond a robust social media presence, the company also has a blog on its website with content that appeals to audiences across the buyer's journey.

Avant-Garde Vegan

Some brands launch a product then promote, while others promote then launch.

Avant-Garde Vegan , an online brand created by UK-based chef Gaz Oakley, grew his business on social media – namely YouTube. Oakley gained popularity posting recipes for healthy, vegan dishes and soon became a go-to resource for new and established vegan consumers.

Eventually, Oakley released his first product, a cookbook. Now the brand sells both cookbooks as well as merchandise.

The reason why this strategy works particularly well is that it focuses on adding value instead of selling. Oakley gained his audience's trust and loyalty through consistent and quality posts on social media.

Once he introduced a product, many of his followers were ready to make a purchase. It's a long-term strategy that can have a big payoff if executed well.

How to Develop a Marketing Mix Strategy

Because the marketing mix incorporates elements from across your department – and even your company – it's imperative to establish a marketing mix strategy for each product you launch, or for your company as a whole. For a fully fleshed-out marketing mix, follow these steps.

1. Engage in market research and product development.

The success of your marketing work is first and foremost contingent on your product. Make sure it's well developed and your team can speak to its benefits and the story behind it.

Best practices in this step include:

• Engaging in market research to understand your buyers' needs.
• Speaking to your current customers to uncover their pain points and see which needs to address in your current product or service line.
• Monitoring industry trends to identify a potential demand in your market.
• Examining the competition.
• Collaborating with your product team during product development to ensure it meets your buyer personas' needs.
• Having your product tested by current customers to see how they're using the product or service and if it's actually solving for their problems.

Taking these actions ensures you're making every effort to understand and solve for your customer, providing a solid foundation for your product to launch successfully.

Featured Tool: Market Research Kit . To make your R&D more impactful, use these free market research templates so you can better understand your customers and competitors.

2. Determine your pricing model.

A lot goes into choosing a price point – so much so that we wrote an entire guide to pricing strategies .

Luckily, you'll be able to refer to much of the work done in the previous section. Thanks to your understanding of your market through research, you'll have answered most of the necessary questions in this section. You'll also need to take your costs into account so you can maximize unit sales and profit.

During this stage, make sure you do the following.

• Speak to customers (or refer to previously completed market research) to determine the ideal selling price.
• Work with the product team to ensure the product can be developed in a cost-effective manner that would ensure profitability at your target price point.
• Meet with financial experts to determine aggressive yet realistic sales forecasts to contribute to the company's bottom line.
• Collaborate with your sales team to determine discounting strategies.
• Determine how you'll adjust price and revenue forecasts when selling through resellers.

Lastly, don't forget to factor in the perceived value by the customer. Even if your product or service doesn't cost a significant amount to make, you'll be able to mark up your product more if you face little competition and provide an irreplaceable benefit to your customers.

Featured Tool: Pricing Strategy Calculator . If you need help selecting your pricing model, use this template to compare different pricing strategies and see which will yield your company the most profit and revenue based on your forecasts.

3. Choose your distribution channels.

The "place" part of the marketing mix answers where your product will be sold. Keep in mind, this can be any combination of your store, a distributor's store, or online. You'll want to address the following points before moving onto the promotion stage:

• Determine if your product will fare best in your physical location, a store of another retailer, on your website, on another company's website, or some combination of these locations.
• Think about geographic location – make sure your supply meets regional demand, and plan for whether or not what you're selling will be available in a certain city, a state, the country, or worldwide.
• Come to an agreement with retailers and resellers on margins, markups, and manufacturer suggested retail prices (MSRP).
• Figure out how many salespeople will be needed to ensure you meet your goals.
• Set goals for retail, third-party sellers, since you may be sharing shelf space or search results with a competitor or two.

4. Select your promotion tactics.

Finally, it's time to promote your product. While this is probably the element most associated with marketing, it's crucial that this element be completed last, because you need the foundation of product, price, and place before determining promotion tactics.

Think about it – shouldn't you know what you're promoting, why you're promoting it, and where it's available before actually promoting it? It's tempting to jump right to this step, but your promotion will be much better off if it's done after everything else in the marketing mix.

Once you do have that understanding, consider the following promotional channels and choose the one(s) that makes the most sense for your product, its buyers, and its price point:

• Content marketing efforts, such as blogging, content creation, and building a website.
• Public relations and working with affiliates and/or influencers.
• Social media marketing – both organic and paid – on channels such as LinkedIn, Facebook, and Instagram.
• Search engine ads on sites like Google and Bing.
• Ads to air on video streaming sites like YouTube, or on TV.
• Event marketing, including attending industry events or hosting your own event.
• Customer marketing and utilizing referrals.
• And more – There are countless promotional ideas you can use to spread the word on your product, service, or business.

Featured Tool: Marketing Plan Template . If your promotional tactics are multi-faceted enough, consider documenting your plans in this customizable template.

Every company's marketing mix is different, placing emphasis on certain factors over others.

Some businesses use their marketing mix for a single product, while others adopt a company-wide marketing mix. However, good marketing mixes should tie in all the elements without neglecting one.

All elements of the marketing mix are important, so don't be quick to overlook any of them, and find ways for different elements of the mix to overlap and share goals.

With so many activities happening to support a single initiative, it's helpful to organize everything in a single template for easy reference. Here are a few examples of marketing mix templates your marketing department can use, in addition to when they might make sense to reference.

1. Simple Marketing Mix Template

Download this Template

This template is a great starter for organizing a marketing mix. It's ideal for one product and for the marketing mix's maker to get an understanding of all the elements involved in the marketing of a product.

2. Company Marketing Mix Template

For a marketing mix that applies company-wide, this template is a perfect fit. You can outline the initiatives that apply to most or all of the products and/or services in your suite.

3. Structured Marketing Mix Template

For when you need to get right to the point with a more organized, actionable visualization, use this structured, bulleted template for quick reference and clarification.

4. Production Marketing Mix Template

Finally, a production marketing mix template is best utilized for internal reference. This template answers questions on the go-to-market efforts for products and services that you're selling.

Mix It All Together

Whether you're a student just learning to understand everything that marketing entails or a CMO hoping to clearly convey the work that your team is doing to your fellow employees, the marketing mix framework is an essential tool to help you get the job done.

Don't forget – if you need to organize your marketing initiatives into a central location, try using HubSpot's Marketing Mix Templates to document your activities in one place.

Don't forget to share this post!

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Marketing Mix

• First Online: 07 September 2022

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• Marc Helmold   ORCID: orcid.org/0000-0001-9759-9002 2  

Part of the book series: Management for Professionals ((MANAGPROF))

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Marketing strategy and marketing mix are closely related elements of a complete marketing plan. While marketing strategy is concerned with setting the direction of a company or product line, the marketing mix is primarily tactical in nature and is employed to carry out the overall marketing strategy (Kotler & Amstrong 2018). The marketing mix refers to the tactics (or marketing activities) that we have to satisfy customer needs and position our offering clearly in the mind of the customer (Opresnik & Hollensen, 2020). It involves the 7Ps in Fig. 9.1; product, price, place and promotion (McCarthy, 1960) and an additional three elements that help us meet the challenges of marketing services, people, process and physical evidence (Booms & Bitner, 1981).

The best advertising is done by satisfied customers. Philip Kotler

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Booms, B. H. & Bitner, M. J. (1981). Marketing strategies and organization structures for service firms. In: Marketing of services, American Marketing Association, Chicago (pp. 47–51).

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McCarthy, E. J. (1960). Basic marketing. A managerial approach . Homewood, IL: Richard D. Irwin.

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Opresnik, S., & Hollensen, M. O. (2020). Marketing: Grundlagen und Praxis: Ein managementorientierter Ansatz. 4. Auflage. (Opresnik Management Guides 24). Opresnik Consulting. Kindle.

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Helmold, M. (2022). Marketing Mix. In: Performance Excellence in Marketing, Sales and Pricing. Management for Professionals. Springer, Cham. https://doi.org/10.1007/978-3-031-10097-0_9

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Marketing Research Mix (MR Mix)

Marketing Research Mix: this article provides a practical explanation of the Marketing Research Mix . After reading it, you’ll have a better understanding of how to conduct market research.

What is a Marketing Research Mix?

The Marketing Research Mix or the ‘MR mix’ was made in 2004 and published in 2007 by Nigel Bradley . He’s a university professor of marketing at the University of Westminster in London.

This type of research was designed as a framework to help researchers design or evaluate marketing research studies. Like the marketing mix , the Marketing Research Mix also has four Ps. However, unlike the marketing mix, these elements are consecutive and belong to the most important phases that have to be observed. These four Ps are purpose, population, procedure, and publications.

Purpose refers to the goals . The term population encourages the researcher to consider the target audience , customer, or player.

Procedures refer to the means to record, process, and then analyse data. This can be desk research, or you can use primary methods. These can be qualitative or quantitative, as well as personal, by phone, by post, or even online. Publication refers to the communicating of results using written reports and verbal presentations.

Marketing research consists of four phases. One example of these is:

Bradley proposed four Ps and called these the marketing research mix. The four Ps help researchers to conduct market research. In his book, ‘Marketing Research: Tools & Techniques’ he expressly explains that the four Ps below must be used consistently and correspond to the most important phases of the research.

Why use the Marketing Research Mix?

By researching a potential or existing market, you can identify your consumer or understand which products would yield high profits for your business. You will find out which product your target market needs or wants, or who your potential customers are.

If your company is already in business, marketing research can be used to identify the limitations or shortcomings of your product(s) or your customers’ expectations. With marketing research, you can determine what the best price is for your product(s) or at what price you would make a profit. It can give you important information about your competitors, so you can set a fair and competitive price. You can also use the results of the research to reduce costs and increase your profit margin .

Investing in market research enables you to reach your target audience. You can promote your company or communicate more effectively and efficiently with your customers.

The Marketing Research Mix can offer you the solutions you need to face different challenges, such as:

• How trends affect the company;
• How to increase market share;
• How the customers or potential market make their purchase decisions;
• How does your customer service compare to that of the competition;
• How can you attract and land new customers;
• What is the best marketing strategy to reach the target audience and increase the company’s profitability.

Getting started with the Marketing Research Mix

Purpose: define the purpose of the marketing research mix.

The purpose of Marketing research mix is the reason why it’s being conducted. The first step is to define the null hypothesis , abbreviated to H0. It’s usually meant to be rejected. Another carefully worded hypothesis is the alternative hypothesis or the H1; this is actually called the ‘research hypothesis’. When these are defined, the researcher can design a research programme to test the hypotheses.

When the results come in, they are compared to the null hypothesis’s prediction. The basic idea is to use this possible explanation and then look for data that support the explanation (or don’t).

It’s best to spend as much time as possible on the hypothesis: it’s the research question and determines how the research is conducted. It determines the topic because it defines the problem.

Population: determine the sample audience

When considering a market sector, you have to ask the following questions: Who is involved with this market? Who are the players? Who should be the focus of the research and where can they be found? This part looks at the target audience, customer, or player; the users or non-users. Who will be the respondent or informant? Should we contact all players or just a few?

An important concept for primary research is sample taking. That means the interviewing or observing of people of which you think they can provide you with the information that will solve your problems. Therefore, when deciding your research method, you have to consider who will be selected and how. In the case of qualitative research this can be a small group. You need a large group for quantitative research.

Procedure: decision about the methods to conduct the research

When determining the procedure, the key question is: How should the research be conducted? Will it be qualitative or quantitative? This part also covers the issue of timing; when will the field work be done?

The best studies start with looking at secondary data. The two main sources: internal (within an organisation) and external, published from a person outside the organisation. These have become more accessible in recent years.

When secondary data doesn’t resolve the problem, look for original data (primary data). It’s useful to think of different primary methods: we can ask people what they’re doing; we can observe them or find out what they have done by counting, or we can manipulate certain variables to discover the effect. This creates three categories: asking questions; observation and experimentation.

Primary techniques for data gathering can be divided into: interviewer administered or respondent administered; direct or indirect; personal or impersonal. Processing of the data, analysis, and interpretation are essential parts of the procedure. Detailed research should be done regarding suitable instruments that can be used for data gathering.

Publication: defines the requirements for how and when the research will be presented. The most important questions under the header ‘Publication’ are: Who is the audience for the results? What needs to be communicated? When and how does it need to be communicated? Research won’t be useful if findings are kept within the research team. At the same time, commercially sensitive information won’t give you a competitive edge if it’s shared publicly. Choices will have to be made about how to publish.

Now it’s your turn

What do you think? Do you recognise this explanation of the marketing research mix, or do you have anything to add? When do you think market research can be effective? What do you believe are success factors that contribute to the practical application of this theory?

Share your experience and knowledge in the comments box below.

More information

• Borden, N. H. (1964). The concept of the marketing mix. Journal of advertising research, 4(2), 2-7.
• Bradley, N. (2007). Marketing research: tools & techniques. Oxford University Press , USA.
• Hair, J. F., Celsi, M., Ortinau, D. J., & Bush, R. P. (2008). Essentials of marketing research. New York, NY: McGraw-Hill Higher Education .
• Zikmund, W., & Babin, B. (2006). Exploring marketing research. Cengage Learning.

How to cite this article: Sari, J. (2020). Marketing Research Mix (MR Mix) . Retrieved [insert date] from Toolshero: https://www.toolshero.com/marketing/marketing-research-mix/

Published on: 03/11/2020 | Last update: 03/25/2022

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Jessie Sari

Jessie Sari is a content writer at ToolsHero. Jessie studies Trade Management in Asia at the Hogeschool van Rotterdam. As part of her education, she focuses on building fundamental skills, including marketing, importing and exporting products and services in Asia, economy, finance, management, consultancy and project management.

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How to Prepare a Sales Plan

Importance of a marketing strategy in an organization, how to identify the appropriate price strategy.

• A Business Plan for Advertising and Promotion
• How to Increase Sales & Revenue: 5 Essential Strategies

Creating a marketing plan takes creativity, but relying on your instincts and gut feelings can lead to assumptions that don’t pan out when you open your doors. The marketing mix consists of interrelated product development, pricing, promotions and distribution strategies that should be based on thorough research. Conducting the right kind of research to analyze how the marketing mix applies to your product or service will help you pursue the right strategies for your company.

Identify your product’s unique selling benefit and research how important it is to consumers. Look at other products and services that offer the same benefit and how successful they are. Conduct surveys and focus groups of your target customers to confirm their demand for your benefit. Examine how your product or service provides its benefit and test-market it with consumers using focus groups, product demonstrations and free sampling. Use your research to finalize your product or service features.

Collect data on what your competitors are charging for what you offer. Look at prices, discounts, rebates, warranties and guarantees. Compare price levels for high-end and bargain versions of products and services that deliver your unique selling benefit. Talk to your distribution partners and ask their opinions as to what you should charge, and if you need to offer incentives, a warranty or specific customer service.

Analyze your distribution options, looking at where your customers buy, your costs of sales for each and potential sales volumes. Survey your target customers, and look for industry research that shows where people buy products or services like yours. Seek out peers in geographic locations where you don’t compete for their feedback. Ask potential customers their impressions of different distribution channels you might use to determine if any will enhance or damage your brand.

Collect media kits from newspapers, magazines, TV and radio stations, websites and outdoor advertising companies. Compare their audience demographics to see which best match your target customer profile. Read trade publications or trade association research papers to learn which promotional methods companies in your industry report work well. Use free data from companies such as Quantcast and Alexa to research your target customers’ use of the Internet so you can develop a social media strategy. Create print, broadcast or Internet ads and test them with focus groups. Include competitors’ ads in your presentation to learn which your potential customers respond to best. Develop a brand message based on the feedback you get from potential customers.

Analyze your findings regarding your product, pricing strategy, distribution options and promotional choices as they relate to each other. For example, if your brand strategy positions you as a high-end product or service, set your prices, choose your advertising media and select where you’ll sell your product accordingly. Finalize your marketing plan to ensure all four aspects of the marketing mix support and complement each other without conflicting.

• MindTools: The Marketing Mix and 4 Ps
• Purdue University Extension: Marketing’s Four P’s: First Steps for New Entrepreneurs
• QuickMBA: Marketing Plan Outline

Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.

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How to write a pricing strategy analysis, challenges in marketing products, how to identify characteristics of a good marketing plan, how to appeal to customers of different ages, how to target marketing needs in distribution channels, how to market a skin product, how to select a distributor for your product, pre-launch marketing checklist, how to create marketing plans depending on customer insights, most popular.

• 1 How to Write a Pricing Strategy Analysis
• 2 Challenges in Marketing Products
• 3 How to Identify Characteristics of a Good Marketing Plan
• 4 How to Appeal to Customers of Different Ages

12.1 Pricing and Its Role in the Marketing Mix

Learning outcomes.

By the end of this section, you will be able to:

• 1 Define pricing.
• 2 Explain pricing and its role in the marketing mix.
• 3 Explain the psychology of pricing.

Pricing Defined

Anytime anything is sold, a price is involved. Recall that during the exchange process, a seller is offering something of value to a buyer in exchange for also something of value. This value to the seller is often referred to as price. The practice of pricing is not a new concept. Some of the oldest records of prices ever discovered were found on clay tablets with symbols in Uruk, located in modern-day Iraq. The records are written receipts of exchanges of sheep, beer, and barley and date back to 3300 BCE! 5

You may recall that price is one of the 4Ps of marketing, or one element in the marketing mix. Once a product has been developed, marketers must determine at which price the product or service will be offered to the target market. Today, pricing is one of the more difficult decisions that marketers must make in the marketing mix because it directly impacts the perception of value from the customer as well as the company’s bottom line. Poor decisions in pricing can have immediate and catastrophic effects on profits that are difficult for companies to recover from. Price decisions must be linked to a product or service’s real and perceived value while also considering competition, supply costs, and when discounts should be offered.

Simply put, price refers to the exchange of something of value between a buyer and a seller. The price determines how much revenue the company will earn and drives the financial health of the organization. However, marketers cannot simply price products and services based on the expected revenue of the organization. The price must be set so that the buyer sees value in the product offering and the price they will pay for it. In other words, marketers must put the perception of value in the product’s price at the forefront while also considering the financial impact to the organization.

While price is what is referred to when discussing most goods and services, price can take on many terms depending on the exchange that is taking place. In higher education, you are paying tuition—the price—in exchange for your education. If you need an attorney, you are likely going to pay a fee—the price—for services rendered. When you are traveling and have to pay a toll, it is the price you pay for using the road or bridge. Regardless of the exact terminology used, pricing of goods and services have the same basic elements.

Elements of Pricing

While a marketer is determining the price of goods and services, they must keep in mind that pricing must benefit both parties involved in the exchange process: the seller (company) and the buyer (customer). Both parties must see value in the product process through pricing for the exchange process to be successful. We’ll first discuss how price is an indicator of value to the buyer and then turn our attention to the seller.

Price as an Indicator of Value

When a buyer purchases a product or service, they seek to satisfy a need through the purchase. The customer will, consciously or not, use several criteria to determine the amount they are willing to spend to satisfy that need. These criteria ultimately lead to the value that the customer sees in the product.

The price-value equation is a subjective assessment by a consumer about what they deem as a value. The price-value equation states that as a customer’s expectations are met at what they consider an acceptable price, value is realized. Value is related to the quality and price of the product, and the formula is

For example, if a consumer purchases a high-end designer Chanel handbag for $11,000, they might equate the value to a beautiful, high-end, well-made handbag that will last for many years. They may also subconsciously believe the bag will portray a certain social status while carrying it. For them, there is value and quality in the product, and they are willing to pay the high price.

Consider another example: you are in the middle of fixing dinner, and you realize you don’t have enough milk for the dish you are preparing. There is a convenience store just a block away from your house and a grocery store five miles away. If you send your partner to walk to the closer convenience store, they will pay more for the milk than if they were to drive the extra five miles to the grocery store, which would be less expensive. With the higher-priced item at the convenience store, you are paying for the convenience. The value in this scenario is in the time saved even at a higher price.

With these two examples, the perceived benefits are directly related the price-value equation. Perceived benefits can include status, convenience, brand, quality, etc. and can vary from buyer to buyer or even situation to situation.

Perceived costs can also include a host of criteria in addition to the price printed on the price tag. Let’s return to the milk purchase example. If the situation were different—say you were not in the middle of cooking dinner—would your decision change? Perhaps. You will still consider other factors before making the decision. How long does it take for you to drive that extra five miles? Is the grocery store known for having long lines during the time you will be shopping? Do you need other items you can only get at that store? Does the store carry the brand of milk you prefer? These are only a few of the many considerations you make before you decide to make the purchase. These are all perceived costs and are weighed against the perceived benefits the buyer considers when determining value.

Marketing in Practice

Founded in 2016, Upside is an app that promotes itself as saving customers money on purchases at gas stations as well as helping local brick-and-mortar businesses earn more profit. Here’s how it works: Upside links to gas stations, restaurants, and grocery stores within a specified mile-radius of the user. The user chooses to claim an offer on the app and has four hours to upload the receipt. The linked businesses are those that have contracted with Upside to drive business to their establishment. Once redeemed, cash is deposited into the user’s account and can be cashed out for gift cards or to a PayPal account.

Upside is banking on the value equation as well as psychological factors of pricing to attract both buyers and sellers. Gas prices, for example, are relatively unchanged from station to station in a small geographical area. If the user is able to get 25 cents cash back per gallon on their fill-up, they may swap convenience of the closer station with that of getting a cash reward at a station a few miles away. If the buyer chooses the station with cash back over one without, the seller (gas station) also finds value in a one-time or new customer.

For more information about Upside, visit the app’s website .

Price in the Marketing Mix

Recall that the marketing mix elements include product, price, promotion, and place. Marketers create value through the maximization of benefits within an acceptable price point using the marketing mix elements. Price, however, is the only element of the marketing mix that directly produces revenue for the company. The other elements are considered costs to organization. Another way to think of price as differing from the other elements is to understand the price not only creates perceived value for the customer but also harvests monetary value for the company. Because price is the revenue-generating element of the marketing mix, it is vital that marketers set the right price both to match buyer perceptions and to maximize company profits. Profit is determined by subtracting total expenses from total revenue.

The Profit Equation

Recall that the goal of any for-profit company is make a profit. The price marketers set for goods and services offered will have a direct impact on the company’s profit-making ability. Therefore, it is imperative that the price set is one that achieves value not only for the buyer but also for the company. Certainly, buyers would prefer a lower price—or even free—for goods and services. It’s simply not feasible for a company to give its products and services away for free; the company would cease to exist very quickly, which does not serve either the company or the buyer well. Rather, it is in the company’s interest to set prices that create value for the buyer and profit maximization for the company, as this gives the organization the best chance of continuing to create value in the long term.

So what is the best price that creates value for the seller? In short, it’s the one that creates value for the buyer and simultaneously generating the maximum profit. If a price is set too high, the buyer may refuse to purchase because they do not see the value; in turn, the company loses out on profit. Alternatively, if the price is set too low, the company may be losing out on profits when a buyer would be willing to pay a higher price.

Profit is the financial gain of a company, or the difference between the amount earned and the amount spent in buying, operating, or producing something. It is the difference between total revenue and total costs and is calculated with the profit equation.

Let’s look at this formula more closely.

• Total revenue is the money generated from normal business operations. It is calculated by the sales price of a product times the quantity of units sold. For example, a company selling wireless earbuds for $19.99 that sold 5,000 units in one period has revenues of $99,950.

Total costs can be categorized as either fixed or variable. Fixed costs are those expenses that do not change regardless of the number of units sold. For example, if the company selling wireless earbuds makes one unit or one million units, the company still has to pay the mortgage for the building it is occupying; the mortgage payment does not increase or decrease based on the number of units produced. Alternatively, variable costs do change based on the number of units produced. In the wireless earbud example, the company would spend more per unit if it ordered fewer units. If it ordered a higher quantity of units, the unit price would decrease.

In determining profit, the total costs include both the fixed and variable costs. The formula is

When setting prices, the marketer must determine how much profit can be made from the sale of goods and services. However, as mentioned earlier, profit is not the only deciding factor in price. Much research has been done on how psychology also effects the perception of pricing.

The Psychology of Pricing

From a marketer’s standpoint, these are all factors that must be considered when setting price. In addition to the value perceived by the buyer, the marketer must also understand other psychological factors that influence the buyer’s perception of price. Several psychological pricing examples are discussed next.

Price Anchoring

When Steve Jobs introduced the Apple iPad during a Keynote in 2010, he showed off the high-resolution screen and talked about its revolutionary features. “What should we price it at?” he asked. “If you listen to the pundits, we’re going to price it at under $1,000, which is code for $999.” He put a giant $999 on the screen. He finally went on: “I am thrilled to announce to you that iPad pricing starts not at $999, but at just $499.” The screen then showed the $999 price being crushed with the $499 price. 6 The crowd went wild!

The concept of price anchoring relies on the first piece of information that a buyer sees. This acts as an anchor, or a frame of reference for what the buyer expects a price to be. Steve Jobs used this concept in his introduction of the iPad. The anchor price he quoted was $999. This immediately made buyers believe the product should be priced around $999. However, when Jobs showed the actual price, starting at $499, the buyers immediately believed, psychologically, that it was a great deal. Viewers did not know what the worth of the iPad was; they just believed they were saving nearly $500 by having the initial anchor of $999.

Artificial Time Constraints

Marketers—particularly retailers—often use the psychological strategy of artificial time constraints . These trigger a sense of urgency in the buyer; if they don’t buy today, they’ll miss out on a great deal. Whereas a consumer may have been on the fence about spending money, these artificial time constraints act as a catalyst for consumers to spend money right now. And there is a lot of power in artificial constraints: consumers are afraid of missing out and don’t want to later regret not buying. But consumers can often find the same prices many times throughout the year because retailers use this tactic frequently.

Price Appearance

A study on the effects of auditory representation in pricing showed that buyers believed $1,555.83 was a very complicated price and difficult to comprehend quickly. The study further outlined that a price of $1,555 (no cents) was better but that buyers were able to more easily and quickly comprehend a price of $1555 (no commas) and thus more likely to pause and consider the product. 7

If you’ve ever gone to a fancy restaurant, you may have noticed the prices on the menu are in a small font and don’t have zeros at the end. The price will be listed as $29 instead of $29.00. Psychologically, longer prices appear to be more expensive because they take longer to read. This effect is augmented by the use of a dollar sign. Similarly, the use of prices with multiple syllables seems more expensive because consumers pronounce the prices in their head. In short, the longer it takes to read and pronounce, the more impact the buyer believes it has on their wallet, 8 which is explained by price appearance . 9

Price Gouging

Price gouging is when companies or individuals take advantage of a situation, typically an emergency or natural disaster, and charge exceptionally high prices for products or services. In some states, like New York, it’s illegal for businesses to price gouge during a state of emergency. 10 In fact, New York was the first state to enact a price gouging law. In 1978, when there was a shortage of oil for heating in the winter and the lives of young and elderly people were threatened, the state created a law where companies could not sell goods or services at excessive prices. 11

Can you think of recent examples where price gouging was a potential concern? During the COVID-19 pandemic, several states posted on their government websites lists of items that couldn’t be subject to price gouging. Currently, the US Department of Justice provides a list of items that can’t be hoarded or subject to price gouging due to COVID-19 precautions, including masks and other personal protective equipment (PPE), respirators, ventilators, and medical gowns. 12 There have been other instances where price gouging was an issue. According to AccuWeather, “some of the most rampant examples of price gouging came during the most destructive storms in recent years, such as Hurricane Katrina, Hurricane Sandy, Hurricane Harvey, and Hurricane Irma.” 13 After Hurricane Katrina, a hotel manager boosted room prices and was sentence to five years in jail. 14

Careers In Marketing

Pricing analyst.

A pricing analyst studies the market and analyzes data to determine the best pricing for products. This article from Zippia provides helpful information about the job role, including qualifications, career paths, salary, education, resume templates, and online courses to improve skills. Indeed.com also provides a thorough job description that outlines top duties and qualifications.

The best way to understand the core of any job is to learn from people who have done the job. Watch this video from a pricing analyst where he discusses his career.

Also check out this article on what makes a great pricing analyst . Some people wonder how a pricing analyst and a data analyst differ. Learn the answer to that question in this article .

Once you’ve determined this may be the career for you, prepare for an interview by watching this video.

Knowledge Check

It’s time to check your knowledge on the concepts presented in this section. Refer to the Answer Key at the end of the book for feedback.

• artificial time constraint
• price appearance
• fixed costs
• Profit = Fixed Costs – Variable Costs
• Profit = Total Costs – Total Revenue
• Profit = Total Revenue – Total Costs
• Profit = Fixed Costs + Variable Costs
• artificial time constraints
• Artificial time constraints
• Price appearance
• Price gouging
• Price anchoring
• Profit a company can expect from sales
• Perceived benefits less the perceived costs associated with a purchase
• Revenue expected from a sale
• Costs of manufacturing the product

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Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Access for free at https://openstax.org/books/principles-marketing/pages/1-unit-introduction

• Authors: Dr. Maria Gomez Albrecht, Dr. Mark Green, Linda Hoffman
• Publisher/website: OpenStax
• Book title: Principles of Marketing
• Publication date: Jan 25, 2023
• Location: Houston, Texas
• Book URL: https://openstax.org/books/principles-marketing/pages/1-unit-introduction
• Section URL: https://openstax.org/books/principles-marketing/pages/12-1-pricing-and-its-role-in-the-marketing-mix

© Jan 9, 2024 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.

Marketing mix

This article contains analysis of each element of marketing mix by using a variety of secondary data sources. The notion of marketing mix refers to a balance of marketing methods needed to sell products and services. Marketing mix consists of four core elements – product, price, place and promotion that are jointly known as ‘four Ps’. Extended marketing mix contains additional ‘three Ps’ consisting of people, process and physical evidence.

Product element of marketing mix

Anything that has a potential to satisfy specific customer needs can be specified as product. In modern marketplace learning about customer needs and wants through marketing research precedes development of products and services. Product variables include but not limited to its design, durability, technical features and capabilities, ease of maintenance and others.

Businesses use branding in order to differentiate their products and services from other products and services offered in the market. For example, while there is a wide range of soft drinks offered in the market, Coca-Cola drink in particular has a large market share, partially due to successful branding strategy of the company.

Importantly, benefits of successful branding go beyond any particular single product to assist the sales of other products offered by the company as well. Positive image of Apple brand assists sales of MacBook desktop computers, as well as, other products offered by the company such as IPhone and IPad.

Benefits of products and services have tremendous on the levels of revenues and these benefits can be divided into three categories: core, tangible and augmented benefits. Core benefits are associated with core functions of the product. For example, a mobile phone offers a core benefit of facilitating a wireless phone communication.

Tangible benefit relates to tangible design, dimensions or functionalities of products, whereas augmented benefits relate to customer perceived value associated with the product. For a mobile phone, tangible benefits may include large screen size and dual-camera, and intangible benefits include a sense of being trendy and modern due to the ownership of the latest model of mobile phone.

Price element of marketing mix

Price can be simply defined as the amount of money received from customer in exchange to products and services. It has to be stressed that “pricing is an area of marketing with a tremendous potential for increasing short-term profits, but unfortunately if managed badly can quickly bring a business its knees” (Meldrum and McDonald, 2007, p.11).

Pricing strategies can be divided into two broad categories: skimming and penetration. Market skimming pricing strategy is associated with charging higher prices for advanced product functions and capabilities, but selling fewer products and services. For example, market skimming pricing strategy is employed by Bugatti, an automobile manufacturer to sell its products such as Bugatti Veyron and Bugatti Vetise.

Market penetration pricing strategy, on the other hand, is associated with setting competitive prices for products and services and increasing the volume of sales. For example, in automobile industry Tata Motors markets the majority of its products via market penetration pricing strategy.

An important distinctive characteristic of price element of marketing mix compared to other elements can be specified in a way that price impacts revenues in direct manner, whereas other marketing mix elements effect costs of production. Moreover, price is the easiest to manipulate with compared to other elements of marketing mix when attempting to impact competition in the market.

Place element of marketing mix

Place element of the marketing mix is associated with the distribution channels of products and services. According to rough estimations, about one fifth of cost of production is spent on distribution, although this figure may greatly vary due to industry-specific and company-specific differences.

Most popular distribution channels include retailers, wholesalers, selling through agents, and direct selling. Certain patterns of distribution channels such as franchising and licensing have enabled some brands sell their products in multiple markets in global scale. Case studies of McDonald’s and Starbucks Coffee can be mentioned to illustrate this point.

Advent of online sales channel a couple of decades ago had significant impact on place element of marketing mix in the global scale. Specifically, online sales channels offer businesses cost-saving advantages to a significant extent. Moreover, there are certain types of products that are sold exclusively via online channels.

Promotion element of marketing mix

It has been noted that “the promotion element of the marketing mix is concerned the ways of communicating with customers and potential customers” (Meldrum and McDonald, 2007, p. 12). Therefore, promotion is based on marketing message about product and the brand that needs to be able to communicate value to target customer segment in an efficient manner.

Promotion can be used for a wide range of purposes such as increasing the volume of sales, attracting new customers and retaining current customers, and communicating marketing message of the brand.

Promotion element of marketing mix can be divided into the following five groups: advertising, sales promotion, personal selling, public relations, and direct marketing (Kotler and Keller, 2011). Specific methods belonging to each of these groups are associated with advantages and disadvantages, therefore, the choice of promotional mix from the groups above depends on a set of factors such as the amount of promotional budget, unique specifications of target customer segment, and the behavior of competitors.

Viral marketing marks the latest trend in the field of marketing and viral marketing promotional technique offers a set of advantages such as the possibility to spread the marketing message across the globe in an engaging way in a short duration of time.

Additional elements of marketing mix

Traditional set of four Ps of marketing mix has been extended to comprise additional three Ps that are people, process and physical evidence.

People element of marketing mix primarily deals with the role of employees in achieving customer satisfaction. Importance of people element of marketing mix is usually greater in service industry compared to manufactured products due to intangible and perishable nature of services.

Processes related to customer services represent another important element of marketing mix. Such processes include but not limited to face-to-face interactions with customer, process of handling customer complaints, process of issuing refunds etc. Panda (2009) associates the level of effectiveness of processes element of marketing mix with people element.

In other words, despite high levels of technological integration in various business processes, the levels of competency of human resources in general, and customer services representatives of the firm in particular play important role in the formation of customer perception about processes with direct implications on customer satisfaction.

Physical evidence is associated with visual aspects of the brand such as factory or store layout, facilities, the quality and types of furniture used etc. This particular element of marketing mix greatly varies according to the nature of the business and its industry.

Competition in markets becoming ever-intensive further increases the importance of marketing mix in practical level. Not a single element of marketing mix can be specified as the most important because marketing products and services in an effective manner is associated with effective approach to be adopted towards each individual element of marketing mix.

In other words, while businesses can focus on one element of marketing mix to a greater extent as a primary source of competitive advantage compared to other elements, severe shortcomings in a particular element in a marketing mix can not be compensated by other elements.

For example, if a particular product has advanced features and capabilities and is offered at a competitive price, but the distribution channel is not organised in an appropriate manner chances to gain solid market share with the product would be compromised.

Alternatively, creative promotional techniques and effective distribution channel can not compensate flaws associated with a product and it will be difficult for the product to succeed.

To summarise discussions, business managers in general, and marketing managers in particular are required to be constantly exploring sources for competitive advantage in the market in relation to each individual segment of the marketing mix. Nevertheless, as it has been illustrated within the body of this article by referring to real-life case studies one particular element of marketing mix can be adopted as a primary source of competitive advantage according to the chosen business strategy of the firm.

Meldrum, M. & McDonald, M. (2007) “Marketing in a Nutshell: Key Concepts for Non-Specialists” Butterworth-Heinemann

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What Are the 4 Ps of Marketing?

• Understanding the 4 Ps

4. Promotion

How to use the 4 ps of marketing in your marketing strategy, example of the four ps of marketing, how does apple use the four ps of marketing, the bottom line.

• Business Essentials

4 Ps of Marketing: What They Are & How to Use Them Successfully

Product, price, place, and promotion are the four Ps in a winning "marketing mix"

The four Ps or marketing are a “marketing mix” comprised of four key elements—product, price, place, and promotion.

These are the key factors that are involved in introducing a product or service to the public. Often referred to as a marketing mix , they provide a framework that companies can use to successfully market a product or service to consumers. Since the four Ps were introduced in the 1950s, more Ps have been added to the mix, including people, process, and physical evidence.

Key Takeaways

• The four Ps are the four essential factors involved in marketing a product or service to the public.
• The four Ps are product, price, place, and promotion.
• The concept of the four Ps has been around since the 1950s. As the marketing industry has evolved, other Ps have been identified: people, process, and physical evidence.

Investopedia / Julie Bang

Understanding the 4 Ps of Marketing

Neil Borden, an advertising professor at Harvard, popularized the idea of the marketing mix—and the concepts that would later be known primarily as the four Ps—in the 1950s. His 1964 article "The Concept of the Marketing Mix" demonstrated the ways that companies could use advertising tactics to engage their consumers.

Decades later, the concepts that Borden popularized are still being used by companies to advertise their goods and services.

Borden's ideas were developed and refined over a number of years by other key players in the industry. E. Jerome McCarthy, a marketing professor at Michigan State University, refined the concepts in Borden's article and named them the "four Ps" of marketing. McCarthy co-wrote the book Basic Marketing: A Managerial Approach , further popularizing the idea.

At the time the concept was introduced, it helped companies breach the physical barriers that could hamper widespread product adoption. Today, the Internet has helped businesses to overcome some of these barriers.

People, process, and physical evidence are extensions of the original Four Ps and are relevant to current trends in marketing.

Any successful marketing strategy should be revisited from time to time. The marketing mix you create is not intended to be static. It needs to be adjusted and refined as your product grows and your customer base changes .

Creating a marketing campaign starts with an understanding of the product itself. Who needs it, and why? What does it do that no competitor's product can do? Perhaps it's a new thing altogether and is so compelling in its design or function that consumers will have to have it when they see it.

The job of the marketer is to define the product and its qualities and introduce it to the consumer.

Defining the product also is key to its distribution. Marketers need to understand the life cycle of a product , and business executives need to have a plan for dealing with products at every stage of the life cycle.

The type of product also dictates in part how much it will cost, where it should be placed, and how it should be promoted.

Many of the most successful products have been the first in their category. For example, Apple was the first to create a touchscreen smartphone that could play music, browse the internet, and make phone calls. Apple reported total sales of the iPhone for FY 2022 at $205.4 billion. In 2021, it hit the milestone of 2 billion iPhones sold.

Price is the amount that consumers will be willing to pay for a product. Marketers must link the price to the product's real and perceived value, while also considering supply costs, seasonal discounts, competitors' prices, and retail markup.

In some cases, business decision-makers may raise the price of a product to give it the appearance of luxury or exclusivity. Or, they may lower the price so more consumers will try it.

Marketers also need to determine when and if discounting is appropriate. A discount can draw in more customers, but it can also give the impression that the product is less desirable than it was.

UNIQLO, headquartered in Japan, is a global manufacturer of casual wear. Like its competitors Gap and Zara, UNIQLO creates low-priced, fashion-forward garments for younger buyers.

What makes UNIQLO unique is that its products are innovative and high-quality. It accomplishes this by purchasing fabric in large volumes, continually seeking the highest-quality and lowest-cost materials in the world. The company also directly negotiates with its manufacturers and has built strategic partnerships with innovative Japanese manufacturers.

UNIQLO also outsources its production to partner factories. That gives it the flexibility to change production partners as its needs change.

Finally, the company employs a team of skilled textile artisans that it sends to its partner factories all over the world for quality control. Production managers visit factories once a week to resolve quality problems.

Place is the consideration of where the product should be available—in brick-and-mortar stores and online—and how it will be displayed.

The decision is key: The makers of a luxury cosmetic product would want to be displayed in Sephora and Neiman Marcus, not in Walmart or Family Dollar. The goal of business executives is always to get their products in front of the consumers who are the most likely to buy them.

That means placing a product only in certain stores and getting it displayed to the best advantage.

The term placement also refers to advertising the product in the right media to get the attention of target consumers.

For example, the 1995 movie GoldenEye was the 17th installment in the James Bond movie franchise and the first that did not feature an Aston Martin car. Instead, Bond actor Pierce Brosnan got into a BMW Z3. Although the Z3 was not released until months after the film had left theaters, BMW received 9,000 orders for the car the month after the movie opened.

The goal of promotion is to communicate to consumers that they need this product and that it is priced appropriately. Promotion encompasses advertising, public relations, and the overall media strategy for introducing a product.

Marketers tend to tie together promotion and placement elements to reach their core audiences. For example, In the digital age, the "place" and "promotion" factors are as much online as offline. Specifically, where a product appears on a company's web page or social media, as well as which types of search functions will trigger targeted ads for the product.

The Swedish vodka brand Absolut sold only 10,000 cases of its vodka in 1980. By 2000, the company had sold 4.5 million cases, thanks in part to its iconic advertising campaign. The images in the campaign featured the brand's signature bottle styled as a range of surreal images: a bottle with a halo, a bottle made of stone, or a bottle in the shape of the trees standing on a ski slope. To date, the Absolut campaign is one of the longest-running continuous campaigns of all time, from 1981 to 2005.

The four Ps provide a framework on which to build your marketing strategy. Think through each factor. And don't worry when the factors overlap. That's inevitable.

First, analyze the product you will be marketing. What are the characteristics that make it appealing? Consider similar products that are already on the market. Your product may be tougher, easier to use, more attractive, or longer-lasting. Its ingredients might be environmentally friendly or naturally sourced. Identify the qualities that will make it appealing to your target consumers.

Think through the appropriate price for the product. It's not simply the cost of production plus a profit margin. You may be positioning it as a premium or luxury product or as a bare-bones, lower-priced alternative.

Placement involves identifying the type of store, online and off, that stocks products like yours for consumers like yours.

Promotion can only be considered in the context of your target consumer. The product might be appealing to a hip younger crowd or to upscale professionals or to bargain hunters. Your media strategy needs to reach the right audience with the right message.

To put this into perspective, let's consider a fictional skincare company that produces organic skincare products. Here's how the four Ps might be utilized:

• Product: The company offers a range of organic skincare products, including cleansers, moisturizers, and serums. These products are formulated with natural ingredients, free from harsh chemicals, and designed to promote healthy and radiant skin.
• Price: The pricing strategy for these skincare products is positioned as premium, reflecting the high quality of ingredients and the company's commitment to sustainability and ethical sourcing.
• Place: The products are sold through multiple channels, including the company's website, select retail stores specializing in organic products, and high-end spas and salons. This distribution strategy ensures accessibility to environmentally conscious consumers seeking natural skincare solutions.
• Promotion: The company's promotional efforts focus on emphasizing the benefits of organic skincare, such as nourishment, hydration, and skin rejuvenation. This includes social media campaigns, influencer partnerships, and educational content highlighting the importance of using non-toxic products for skincare routines.

Apple utilizes the four Ps of marketing by focusing on:

Product innovation: Evident in its continuous development of cutting-edge technology like the iPhone, MacBook, and Apple Watch.

Pricing strategy: Apple often positions its products as premium offerings, targeting a more affluent consumer base.

Place: Apple emphasizes distribution through its own retail stores, online platforms, and strategic partnerships with authorized resellers.

Promotional efforts: Apple emphasizes sleek design, user experience, and aspirational branding, creating a sense of exclusivity and desirability around its products.

How Do You Use the 4 Ps of Marketing?

The model of the 4Ps can be used when you are planning a new product launch, evaluating an existing product, or trying to optimize the sales of an existing product.

A careful analysis of these four factors—product, price, place, and promotion—helps a marketing professional devise a strategy that successfully introduces or reintroduces a product to the public.

When Did the 4 Ps Become the 7 Ps?

The focus on the four Ps—product, price, place, and promotion—has been a core tenet of marketing since the 1950s. Three newer Ps expand the marketing mix for the 21st century.

• People places the focus on the personalities who represent the product. In the current era, that means not only sales and customer service employees but social media influencers and viral media campaigns.
• Process is logistics. Consumers increasingly demand fast and efficient delivery of the things they want, when they want them.
• Physical evidence is perhaps the most thoroughly modern of the seven Ps. If you're selling diamond jewelry on a website, it must be immediately clear to the consumer that you are a legitimate established business that will deliver as promised. A professionally designed website with excellent functionality, an "About" section that lists the principals of the company and its physical address, professional packaging, and efficient delivery service are all critical to convincing the consumer that your product is not only good, it's real.

What Are Some Examples of the 4 Ps of Marketing?

• Place refers to where consumers buy your product, or where they discover it. Today's consumers may learn about products and buy them online, through a smartphone app, at retail locations, or through a sales professional.
• Price refers to the cost of the product or service. Properly determining product price includes an analysis of the competition, the demand, production costs, and what consumers are willing to spend. Various pricing models may be considering, such as choosing between one-time purchase and subscription models.
• The product a company provides depends on the type of company and what they do best. For example, McDonald's provides consistent fast food in a casual setting. They may expand their offerings, but they wouldn't stray far from their core identity.
• Promotion refers to specific and thoughtful advertising that reaches the target market for the product. A company might use an Instagram campaign, a public relations campaign, advertising placement, an email campaign , or some combination of all of these to reach the right audience in the right place.

The four Ps of marketing—product, price, place, promotion—are often referred to as the marketing mix. These are the key elements involved in planning and marketing a product or service, and they interact significantly with each other. Considering all of these elements is one way to approach a holistic marketing strategy .

Neil Borden. " The Concept of the Marketing Mix ."

E. Jerome McCarthy. "Basic Marketing: A Managerial Approach." Richard D. Irwin, Inc., 1960.

Apple. " Condensed Consolidated Statements of Operations (Unaudited) Q4 2022 ," Page 1.

Apple Insider. " At 2 Billion iPhones Sold, Apple Continues to Redefine What Customers Want ."

Harvard Business School: Technology and Operations Management. " UNIQLO: What’s Behind the Low-Cost High-Quality Casual Wear? "

Smart Insights. " Campaign of the Week: The Longest Running Print Ad Marketing Campaign in History ."

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