“4P” is one of the important
marketing techniques
used by companies when planning, proposing, and selling products and services. What exactly is 4P?
Here we have explained the 4Ps, which are essential when formulating
a marketing strategy
.
What is 4P?
4P is
a framework
that is used when formulating marketing strategies from the perspective of the “company side” and “seller side.”
In order to provide products and services that meet customer needs, we will examine marketing strategies from four perspectives.
It is also called a ”
marketing mix
” because it combines multiple frameworks and considers marketing strategies from a composite perspective.
What are the four perspectives in 4P?
The 4Ps mainly refer to the following four “Ps”.
- Product: Goods/Services
- Price: Price
- Promotion：Sales promotion
- Place: Distribution
For each framework, we will consider what kind of products and services (Product), how much to sell (Price), what kind of promotional activities to conduct (Promotion), and how to deliver them (Place). Masu.
What is important is the balance among these four P strategies. No matter how good or bad one framework is, it cannot be used as a single marketing strategy.
Only when the four P’s are consistent can the marketing strategy for the product or service be successful.
The 4Ps are from the company’s perspective, but when marketing is viewed from the perspective of the “customer side” or “buyer side,” it is called the 4Cs, an acronym for the four Cs.
- Customer Value
- Expenses
- Customer convenience
- Communication
Elements and roles of each of the 4Ps
As mentioned above, the 4Ps are a marketing mix, so it only works as a single marketing strategy when multiple frameworks are skillfully combined and aligned.
Therefore, in order to make the 4Ps work well, it is necessary to understand each framework individually. Below, we will explain the “P” for each framework.
Product: Goods/services (what kind?)
“Product” in the 4Ps determines what products and services your company will provide to your customers. This includes comprehensive aspects such as product design, packaging, service quality, and branding.
We will make a comprehensive decision by taking into account what your company can and cannot do, your field of expertise, and your position in the market.
However, even if your company is good at something, if there is no demand in the market, it will be difficult to implement a successful marketing strategy. Masu.
Price: Price (how much will it sell for?)
No matter how good your product or service is, if the price is high, customers will hesitate to buy it. You also need to consider from the customer’s perspective whether the products and services you offer are appropriate for your price range.
The “Price” section of the 4Ps takes this into account and considers how much to offer your products and services, taking into account the price that customers can easily afford.
However, no matter how much you set a price that will please your customers, if you are not making a profit, you will be missing the point. Since marketing is not a volunteer job, you also need to have a firm grasp of the profit margin your company can earn.
It is very important to carefully consider the balance between setting a price that will please your customers and how much profit you will bring to your company.
Promotion: Sales promotion (what kind of sales promotion activities?)
Products and services will only sell if they are recognized by customers. In other words, a product or service will not sell if it is not recognized by customers.
“Promotion” in the 4Ps involves exposing what your company’s products and services are and communicating the benefits to customers.
The main means of advertising for this purpose include commercials and advertisements placed in
mass media
such as television, radio, and newspapers,
Internet advertisements
using
online
, SNS advertisements, and
mail magazine
advertisements.
These should be done while consulting with your company’s available budget, but you also need to consider whether the promotional media is compatible with the products and services your company is providing.
For example, if you are doing promotional activities for cars, mass media such as television, radio, and newspapers are suitable because they appeal to men and women of all ages.
On the other hand, if you want to appeal to only a certain number of people, such as cosmetics or supplements, it is more cost-effective to use internet advertising, SNS advertising, email newsletter advertising, etc., which allow you to narrow down your target audience.
Place: Distribution (How will it be delivered?)
“Place” in the 4Ps considers how to sell, where to sell, the route to selling, and the actual place to sell.
We will decide based on the characteristics of the product or service, such as whether to sell it at our own stores, have it placed in convenience stores, supermarkets, department stores, etc., or limit sales only to online e-commerce sites. .
At the same time, considering whether the environment is easy for the target customers to purchase is also an important point in determining sales.
For example, in the case of products that customers are hesitant to purchase in stores, such as sanitary products and energy supplements, it is easier for customers to purchase them on e-commerce sites than in physical stores.
On the other hand, for expensive vehicles such as cars and motorcycles, and luxury goods such as jewelry and branded items, physical stores are safer for customers.
With many of the products mentioned above, it is often not possible to make a purchasing decision right away just by looking at the photos and images.
Many people want to “actually check the ride quality” or “see the quality with their own eyes,” so they may need to consult with a salesperson or listen to their advice before making a decision.
In such cases, customers can make decisions with more peace of mind if they handle the product at a physical store rather than online.
Strategy by framework in 4Ps
Even in marketing mixes such as the 4Ps, so-called composite framework strategies, it is necessary to develop individual marketing strategies that are independent of each other.
Here, we will explain how to formulate strategies for each framework.
Product strategy in 4P
Product strategy in 4Ps involves designing products and services to be provided to customers by combining the following items.
- Deciding on the concept of products and services
- Advantage over competitors and presence of own brand
- packaging in products
- Warranties for products and services
- Support for products and services
Deciding on the concept of products and services
First, we decide on the concept of the product or service. Determining the concept is the most fundamental part of marketing strategy.
We always keep the benefits in mind and formulate strategies while considering who will use the product, when, where, and how.
Advantage over competitors and presence of own brand
Consider whether the product or service you are offering can provide value to your customers and differentiate you from your competitors.
These become your company’s brand to customers and become your strength. Ideally, you would be able to provide your customers with products and services that only your company can provide and that your competitors cannot imitate.
packaging in products
Packaging is primarily an important element of marketing strategy for products. The design and concept of a package can sometimes even affect the sales of a product.
When a customer picks up a product, the first thing they see is the packaging, and this is often the moment when a customer makes a purchasing decision.
Therefore, when it comes to packaging, it is necessary to select materials that are appropriate for the product, and to carefully select colors, shapes, and designs such as logos and marks.
Warranties for products and services
Consider whether the product should come with a warranty. If included, consider how long the warranty will be.
If it is too short, customers will become anxious, and if it is too long, there is a high possibility that your company will be disadvantaged. We conduct market research to find the optimal warranty period.
Support for products and services
The more complex, difficult, and multi-functional a product or service is to use, the more a support system will be required by the customer.
If it’s too difficult to understand how to use it, and you can’t make full use of its functions, but the provider sells it and that’s it, it won’t lead to a good reputation, and sales will eventually stagnate.
In anticipation of such situations, we will also take into consideration the enhancement of our support system. Efforts and concepts that allow companies to propose plans that customers need first are called ”
customer success
,” and companies have been drawing a lot of attention in recent years.
Price strategy in 4P
The price strategy in the 4Ps uses several types of setting methods to set prices for the products and services provided.
Rather than setting prices based on intuition, we determine the costs that we can generate ourselves, and make decisions based on the balance between the market price range and our competitors.
Typical examples include the following setting methods.
- Cost-based pricing
- Competitive pricing
- Marketing strategy-based pricing
Cost-based pricing
In cost-based pricing, prices are set primarily based on the manufacturing costs incurred within the company.
It is easy to predict how much profit you will make in the future from the products and services you are currently offering, and it is easy to predict how much you will recover costs.
This pricing method is easy to calculate and many companies are considering implementing it, but it should be noted that it does not take into account the market price range or competitors’ pricing.
Competitive pricing
Competitive pricing involves setting prices for your products and services based primarily on the prices set by your competitors.
Since the price range is already recognized in the market, this pricing method is likely to be easily accepted by customers.
However, if a price leader significantly reduces prices, it may become involved in price competition with competitors.
If you set prices based on competitive standards without a strong corporate strength, you risk losing, so be careful.
Marketing strategy-based pricing
Marketing strategy-based pricing is a pricing method that primarily puts the customer’s perspective first.
We use market research to determine the optimal price at which customers will be willing to purchase.
It is called a standard marketing strategy because it determines the optimal price that will satisfy customers based on this type of marketing strategy.
Pricing needs to fluctuate depending on the time of year and customer demand, so it is necessary to set a more complex and detailed pricing strategy.
Promotion strategy in 4P
Promotion strategy in the 4Ps determines how to expose your company’s products and services to customers.
We will develop a promotion strategy mainly using the following methods.
- advertisement
- public relations
- sales promotion
- human sales
I will introduce them in order.
advertisement
Advertising is the most popular method for sales promotion activities and is used by many companies, but there are many different types of advertising, and it is necessary to select a medium based on the features and characteristics of your company’s products and services.
These include mass media advertisements mainly placed on media such as TV, radio, and newspapers, Internet advertisements placed on the Web, and transportation advertisements on public transportation.
public relations
In Japan, public relations is considered synonymous with PR activities (Public Relations), and mainly involves manipulating impressions in the market, such as
branding
and image formation of products and services.
We also carry out a wide range of other activities such as interacting with stakeholders, building relationships, participating in events, and doing charity work.
sales promotion
The main purpose of sales promotion is to develop strategies that go one step further than those used at the advertising stage, and to actually lead to customer purchases.
We will strengthen our appeal to get customers to purchase the products and services we offer, such as by distributing products on a trial basis, offering one-day trial services, and conducting campaigns and demonstrations.
human sales
Personal sales is what is called face-to-face sales. We will conduct sales activities by actually contacting customers, such as demonstration sales and in-store customer service.
Personal selling also includes visiting existing customers to make sales calls and explaining products and services at exhibitions and events.
Place (distribution) strategy in 4P
The Place (distribution) strategy in the 4Ps determines the distribution
channel
(route).
If you do not have your own distribution channels, you will have to rely on external resources, which can cost a lot of money and take a lot of time.
The key to developing a marketing strategy that is more advantageous than your competitors is how well you can build a superior distribution channel.
- Determine the length of the distribution channel
- Determine the width of the distribution channel
- Determine the product sales area
- Decide on partner companies
- Determine incentives for distribution channels
Determine the length of the distribution channel
The length of the distribution channel refers to the number of so-called intermediaries. Basically, the product goes through one of the following steps before it reaches the customer:
| zero stage channel | Company (provider company) → Consumer (customer) |
| 1 stage channel | Company (provider company) → Retailer → Consumer (customer) |
| 2 stage channel | Company (provider company) → Wholesaler → Retailer → Consumer (customer) |
| 3 stage channel | Company (provider company) → Wholesaler → Secondary wholesaler → Retailer → Consumer (customer) |
Determining the number of stages in each of these distribution channels determines the “length.”
Determine the width of the distribution channel
Distribution channel breadth refers to the number of distributors a company handles.
The more distributors we handle, the more difficult it becomes to manage them as a whole, which in turn affects our quality control system.
While taking such issues into consideration, we will decide on the width of the distribution channel from one of the following three policies.
- open distribution policy
- selective distribution policy
- exclusive distribution policy
The explanation for each is as follows.
In return, we ask our partner companies to take measures such as discontinuing the sale of competitors’ products. This refers to so-called special agents and agents.
Distribution channels are easier to control and overall management is easier.
However, as a product provider, you must support your dealers and agents, and you may need to introduce a qualification system or provide training.
Due to these circumstances, it must be taken into account that the cost of maintaining distribution channels may increase significantly.
Determine the product sales area
We will decide whether to expand the sales area only to a specific region or nationwide. Naturally, the required costs will differ significantly between selling in a limited area and selling nationwide.
Also, advertising and promotion strategies will change, so targeting at that stage will also need to be done carefully.
Furthermore, as distribution channels expand, the number of distributors that can be selected becomes limited.
Decide on partner companies
We will comprehensively consider the above-mentioned Place (distribution) strategy and decide on companies that we would be happy to partner with. The important thing is to clarify your company’s own selection criteria.
For example, the selection criteria can be any factor, such as the partner company’s financial status and content, transaction terms, or compatibility with your company.
If the element is useful for your company and can be judged to be profitable, that will be the selection criteria.
Building distribution channels is a 4P (marketing mix) framework that requires especially effort and time.
Please be aware that if you decide on a partner company without being vague, you may be forced to make major renovations later.
Determine incentives for distribution channels
Motivating distribution channels means considering margins and incentives for so-called partner companies.
We will decide how much support to provide for distribution channels within our company’s budget. We determine the optimal amount of financial support for partner companies to actively engage in sales activities.
If there are too many, your company will be under pressure, and if there are too few, you will not be able to get active cooperation from partner companies. We need to have a well-balanced motivation policy, neither too much nor too little.
Summary: What is 4P? Four important strategies in marketing
If any one of the 4Ps stands out, the marketing strategy as a whole will not work, whether good or bad. What is important is consistency among the four strategies.
Always maintain a good balance between the four frameworks and coordinate your entire marketing strategy.