What Are the Four Ps of Marketing?

Marketing is the activity, set of institutions, or processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. The four Ps of marketing is a marketing concept that summarizes the four key factors of any marketing strategy. The four Ps are: product, price, place, and promotion.

The History of the Four Ps of Marketing

The four Ps were popularized by , in the 1950s, as part of the overall marketing mix. The four Ps of marketing are still widely used today by marketers and companies to advertise their goods and services.

Understanding the Four Ps of Marketing

Now that you know what the four Ps of marketing are, let’s break down each one so you can utilize each in your own marketing strategy.

What is Product?

The product is what your company sells. For example, maybe it is smoothies from your juice bar or jewelry from your e-commerce store. Or, it can be a service, like yoga classes or therapy sessions. The product is what you make available to the consumer. Ideally, your product or service should fulfill an existing consumer demand. The type of product or service you offer helps you determine how much to charge for it, where it should be placed, and how it should be promoted. (The other three Ps of marketing!)

To capitalize on successfully marketing your product, you need to identify why it is different or special. So, what sets your product apart from other products like it on the market? How can it win over customers and beat the competition? The key to this P of marketing is determining what it is that makes your product unique or special.

Example of Product

Many successful products and services are the first in their category. For example, that had the ability to do much more than simply make phone calls.

What is Price?

Price is the amount of money you charge customers for the previously determined product or service. The drives up the most amount of sales and the most profit for your company. The price also must be related to the product’s real and perceived value.

Example of Price

There are , like supply costs, seasonal discounts, and competitors’ prices. There are also other reasons to raise or lower prices. For example, some high-end businesses might to appeal to an affluent audience. On the other hand, other businesses might lower the price of a newer product or offer a discount to entice more consumers into buying and trying the product.

What is Place?

The third P of marketing is place. This is the place where you should sell your product and how it should be delivered to the market.

Example of Place

For example, would it be better to sell your product from a brick-and-mortar store or an e-commerce website? Or, it can refer to where you place the product within your store’s display. Place can even refer to where you choose to advertise your product, like on TV, social media, or web pages. The ultimate goal of place is to determine the best place to get products in front of the customers who are most likely to purchase them.

While place might seem irrelevant if , it actually is extremely relevant. For example, on which social media platforms are you promoting your e-commerce website? Place and promotion are tied closely together.

What is Promotion?

The final P of marketing is promotion. Promotion includes all of the advertising and public relations that make up your promotional strategy for your product. The goal of promoting your product is to show consumers why they need it, what problem it will solve for them, and why they should fork over their hard-earned money for it. What is the best way to reach your target market? It might be a social media platform, a PR campaign, or an SEO strategy.

Example of Promotion

There are so many ways to promote your business today and so many tools available to help you do it. The key is choosing the right method of promotion in order to reach your specific target audience. They might include online marketing, SEO, social media, Google Ads, social media advertising, affiliate marketing or influencer marketing, content marketing, or email marketing.

Marketing Strategy Examples

To create an excellent marketing strategy, here is an example:

Step 1: Product: Determine what it is that you sell, whether it is a product, service, consulting, etc.

Step 2: Price: Decide how much you will charge for your product or service that will both help you make a profit, but is realistic for your consumers.

Step 3: Place: Choose where you will sell your product or service.

Step 4: Promotion: Pick the best method of promoting your product or service.

Marketing Analysis Example

If your current marketing strategy doesn’t seem to be working, perform a marketing analysis by working your way through each of the four Ps of marketing to determine the issue. Maybe it lies within the product, price, place, or promotion. For example, maybe you have an excellent product, but the place you are selling it isn’t working.

The Four Ps are Essential for Marketers

If you want to stand out from your competitors, you need to leverage the four Ps of marketing. For more marketing tips, consider joining the ���������! We offer Digital Marketing Certifications and more to help you be the best possible marketer.

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By Peter C. Verhoef and Peter S.H. Leeflang

Appeared in Journal of Marketing, 73 (March 2009)

In a nutshell: This study investigates the influence of the marketing department and assesses its determinants and consequences.

Practitioner takeaways: The authors suggest a dual relationship between the marketing department’s influence and market orientation. A marketing department’s influence is related positively to market orientation, which in turn is related positively to firm performance. How can a marketing department be more influential? The accountability and innovativeness of the marketing department are the two major drivers of influence.

By Frank Germann, Peter Ebbes and Rajdeep Grewal

Appeared in Journal of Marketing, 79 (May 2015)

In a nutshell: Skeptics from marketing academia and practice alike are unconvinced about the CMO’s performance implications in terms of firm outcomes. The authors set out to address these skeptics: Using data from 155 publicly traded firms over a 12-year period (2000–2011), they find that firms can indeed expect to benefit financially from having a CMO at the strategy table.

Practitioner takeaways: The authors conclude that firms benefit from having a CMO among the top management team. Conservatively, the data and analyses suggest that Tobin’s q of firms that employ a CMO is approximately 15% larger than that of firms that do not employ a CMO, and CMO presence has a positive impact on excess stock returns.

By Hui Feng, Neil A. Morgan and Lopo L. Rego

Appeared in Journal of Marketing, 79 (September 2015)

In a nutshell: Using a new objective measure of marketing department power and a cross-industry sample of 612 public firms in the U.S. from 1993-2008, this study shows that, in general, marketing department power increased during this time period. This finding matters because the authors also show that a powerful marketing department enhances firms’ longer-term future total shareholder returns beyond its positive effect on firms’ short-term return on assets.

Practitioner takeaways: Senior managers should value a powerful marketing department because it contributes to a firm’s short-term profitability and longer-term shareholder value (even beyond its effect through marketing capabilities).

By D. Eric Boyd, Rajesh K. Chandy and Marcus Cunha Jr.

Appeared in Journal of Marketing Research, 47 (December 2010)

In a nutshell: Which kinds of firms benefit most from having a CMO? This research identifies a few firm characteristics signifying that a CMO is a good fit.

Practitioner takeaways: In general, firms should consider appointing a CMO when customer power is low. If a firm faces considerable customer power, a CMO with the right background and experience can still help; role-specific experience is most important in this case. Moreover, CMOs will be more successful in firms with a larger scope and size and greater past performance. Recruiters should investigate the experiences of prospective CMOs when they consider whom to pick for the job, and CMO candidates should carefully assess the level of discretion that would be available to them before they plunge into a new CMO job.

By Kimberly A. Whitler, Ryan Krause and Donald R. Lehmann

Appeared in Journal of Marketing, 82 (September 2018)

In a nutshell: Boards with members who have deep marketing experience are better positioned to make growth a firm-wide priority and to increase the effectiveness of revenue growth strategies. The authors’ data shows that firm re​​​venues increased by 5.8 percentage points annually when a marketer is on the board.

Practitioner takeaways: The theorizing and analyses can help CMOs better understand how those above them affect their ability to deliver results. This research illuminates the value of having marketing-experienced board members and should motivate CMOs to inspect board composition and other factors that will enable them to exercise their skill sets and wield influence before they accept a CMO position.

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I was recently honored to be a speaker at the in New York City, and I had the pleasure of introducing , the father of modern marketing. Kotler has become a dear friend over the past five years, and we met over Chinese food the night before our speaking engagement. I had so many questions for Phil, but I barely had a chance to ask any because I was answering all of his! I told my fiancé that I was disappointed I didn’t ask my questions, but she wisely responded, “That’s how he became so smart.”

My speech at the Creating Value conference included a reimagined version of the venerable 4 P’s of marketing that many universities still teach today. The framework has been reinterpreted, evolved and expanded by many. Most versions meet the test of reasonableness and some are managerially useful adaptations in response to the changing role marketing can play in society.

I’m not an “If it ain’t broke, don’t fix it” kind of guy. Things don’t have to be broken before they can be made better and more valuable. This obvious fact is the basis for the first “P,” which stands for product. But try to reimagine “product” as “solution.” Nobody wants your product—they want your solution. Looking through the lens of “solutions” vastly widens the aperture for innovation.

When it comes to the second “P,” which stands for price, I believe there’s another element that may figure more importantly in your value equation: time. Think about the disruptors in our economy; most either saved or gave back time to their customer. Friction is a waste of time. Poorly trained customer service is a waste of time. Out-of-stocks are a waste of time. Slow page loads are a waste of time. When you look across consumer product and customer service data, you’ll find “waste of time” to be the No. 1 complaint.

The third “P,” which stands for place or distribution, is what I often refer to as the Cinderella of the 4 P’s. Long ago, marketers forfeited their seat at the table on supply chain and logistics because it wasn’t as sexy as storytelling. Marketers are addicted to storytelling as the panacea for every business challenge. Now, thanks to smartphones and other technology, this “P” is about unprecedented insight into context, around-the-clock access and real-time immediacy. This makes it the most important “P,” which I now reimagine as “omni-channel” to mean all distribution and media channels combined into one powerful marketing muscle for creating customer value.

The fourth “P” requires perhaps the most important evolution. Instead of “promotion,” this element should be reimagined and expanded to “participation.” What I like about the term is that it aptly captures the new dynamic of customer engagement: a direct transaction, meaning a direct behavior or desired action by your customer; and an indirect transaction, measured by likes, followers, shares, feedback, etc. Without an indirect transaction with your customer, you only have revenue. Without the direct transaction, all you have is gossip.

The advent of social media has ushered in an expectation by brand owners that they don’t just want purchase behavior, they want positive social affirmation as a complete expression of an engaged customer. Conversely, consumers don’t just want to buy, they want to be understood. By thinking of the opportunity in terms of participation, you ensure the customer’s voice is actively monitored and understood. Ideally, it leads to inspiration for co-creation.

My new acronym is S.T.O.P.: Solutions, time, omni-channel and participation. My advice is to STOP using the 4 P’s and start reimagining your brand in this way.

In the end, done right, the value of marketing will evolve to a world where everything is bought and nothing is sold, a world where marketing has less to do with buying and more to do with belonging.

Only then does the field have a fighting chance to reverse the decades-long decline of trust from consumers and CEOs alike.

Kotler’s first words on stage after my presentation were, “Russ Klein just crushed the 4 P’s!” That’s an endorsement I will treasure all my life.

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What makes a great data-driven marketing leader?

Some say you need knowledge and expertise of cutting-edge computer hardware, state-of-the-art software and facility with the most advanced statistical techniques.

After reading ’ newest book, , I’m convinced the most important thing we marketers must understand is how the mental rules of thumb—or heuristics—we use when making decisions can bias our decision-making.

We may think we are highly rational, left brain-leaning and deeply knowledgeable in statistical methods. Yet, as The Undoing Project explains, we consistently and systematically make errors in judgment and decision-making.

If you’ve not heard of the “representativeness heuristic” or the “availability heuristic” or the idea of “anchoring” and how they influence us, even the best data-mining algorithms may not advance your marketing aims.

What Lewis has written is an entertaining and educational book that describes the lives and academic work of two Israeli psychologists, Daniel Kahneman and Amos Tversky. 

Lewis’ storytelling is remarkable in bringing to life and making relevant a series of highly complex concepts that govern our decision-making.

He simultaneously provides the reader with a powerful biography of the psychologists and case illustrations from the worlds of sport and medicine that manifest the impact of their groundbreaking research. 

The Undoing Project is a fun-to-read book that even the marketer with only a casual interest in data analytics will find hard to put down. For those interested in delving deeper, Lewis has provided a series of references and citations sufficient to power the motivated reader to become an expert in the mind’s influence on decision-making. 

NEW YORK, NY – NOVEMBER 23: (L-R) Director Adam McKay, author Michael Lewis and actor Brad Pitt attend ‘The Big Short’ New York premiere at Ziegfeld Theater on November 23, 2015 in New York City. (Photo by Astrid Stawiarz/Getty Images)

How it Begins: Professional Sports and Analytics

The book begins where Lewis’ 2003 best-seller, Moneyball, left off.

In Moneyball, Lewis explored how Oakland A’s general manager Billy Beane revolutionized baseball by applying data and analytics to the game.

In The Undoing Project, Lewis shows how Kahneman and Tversky’s ideas are transforming the practice of medicine, modern finance, economics, professional sports and, of course, marketing.

Lewis begins by describing the journey of a committed data and analytics pioneer: Daryl Morey. The general manager of the Houston Rockets, Morey is a self-proclaimed geek who sought, with some success, to build an analytics engine to improve player screening and recruiting for his NBA team.

“Morey’s job was to replace one form of decision-making, which relied upon the intuition of basketball experts, with another, which relied mainly on the analysis of data,” Lewis writes. “One of the first things Morey did after he arrived in Houston (in 2006) was to install his statistical model for predicting the future performance of basketball players.”

Morey’s analytics model improved the Rockets’ performance. “The players he’d drafted performed better than the players drafted by three quarters of the other NBA teams. His approach had been sufficiently effective that other NBA teams were adopting it,” writes Lewis. And the Rockets’ performance was consistently strong.

Yet, there were consistent and systematic errors. Poor decisions made because of the ways that our minds work. For example, in the 2007 draft, Morey’s model favored Marc Gasol, a 22-year-old, seven-foot-one-inch center playing in Europe. “The scouts had found a photograph of him playing shirtless. He was pudgy and baby-faced and had these jiggly pecs. The Rockets’ staff had given Marc Gasol a nickname: ‘Man Boobs,’ ” Lewis writes.

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Morey chose not to draft Gasol, who went on to become a two-time NBA All-Star. Morey said, “I made a new rule right then. I banned nicknames.”

The problem, we learn from Lewis, is a tendency that Tversky and Kahneman called “representativeness” in thir article, “Judgment under Uncertainty: Heuristics and Biases,” published in Science in 1974 and one of the most often-cited academic papers of all time. 

The same phenomenon that caused the Rockets to pass on Gasol was true of Harvard basketball player, Jeremy Lin. “He lit up our model,” said Morey.

The problem was, “The objective measurement of Jeremy Lin didn’t square with what the experts saw when they watched him play: a not terribly athletic Asian kid,” reports Lewis.

“At the bottom of the transformation in decision-making in professional sports—but not only in professional sports—were ideas about the human mind and how it functioned when faced with uncertain situations,” writes Lewis.

Despite the fact that the Houston Rockets and Morey were writing the book on applied analytics in basketball they were making systematic errors. And they are not alone.

Lewis describes the impact Tversky and Kahneman’s article had on a young high school student named Don Redelmeier. Redelmeier, Lewis explains, went on to became a physician and to co-author academic papers with Tversky, including, “Discrepancy between Medical Decisions for Individual Patients and Group,” published in The New England Journal of Medicine in 1990.

“ ‘Watch any NBA game,’ Tversky explained to Redelmeier, and you saw that the announcers, the fans and maybe even the coaches seemed to believe that basketball shooters had the ‘hot hand.’ Simply because some player had made his last few shots, he was thought to be more likely to make his next shot.” Lewis writes. Tversky collected data on NBA shooting streaks to see if the “hot hand” was statistically significant and found it was not.

“Tversky had the clear idea of how people misperceived randomness. […] People had incredible ability to see meaning in these patterns where none existed,” Lewis writes.

Transition: Medical Accidents and Heuristics

Today, Redelmeier is a physician at one of Toronto’s most important trauma centers, Sunnybrook Hospital. In part, his job is to check the understanding of the specialists for mental errors. Lewis shares a frightening and powerful story of how an accident victim with multiple injuries nearly died due to this decision-making phenomenon.

Lewis explains that ER doctors observed the accident victim with a wildly irregular heartbeat. Before passing out, the victim told the ER physicians she had an overactive thyroid. The treating physicians were about to administer drugs for hyperthyroidism to the patient until Redelmeier arrived in the ER.

Lewis reports that Redelmeier, “Asked everyone to slow down. To wait. Just a moment. Just to check their thinking and to make sure they were not trying to force the facts into an easy, coherent and ultimately false story.”

It turned out the patient had a collapsed lung which, if left untreated, would have killed her.

“It was a classic case of the representativeness heuristic,” said Redelmeier. “You need to be so careful when there is one simple diagnosis that instantly pops into your mind that beautifully explains everything at once. That’s when you need to stop and check your thinking.”

If that story moves you as a marketer, you should read Lewis’ The Undoing Project.

You might follow that with a reading of Daniel Kahneman’s 2011 best-seller, . Then you might want to proceed to the other academic journal articles described by Lewis in his book.

Reading The Undoing Project, you’ll realize the biggest challenge we have as decision-making marketers is our own human fallibility, not our capacity to process and analyze the data. 

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