BUSINESS

BUSINESS ESSENTIALS

The 4 Ps
By
ALEXANDRA TWIN
|
Reviewed by
SOMER ANDERSON
|
Updated Feb 19, 2021

TABLE OF CONTENTS
What Are the 4 Ps? Understanding the 4 Ps
How the Four Ps Work How the Four Ps Work
4 Ps of Marketing FAQs

What Are the 4 Ps?

The four Ps of marketing are the key factors that are involved in the marketing of a
good or service. They are the product, price, place, and promotion of a good or
service. Often referred to as the marketing mix, the four Ps are constrained by
internal and external factors in the overall business environment, and they interact
significantly with one another.

The 4 Ps are used by companies to identify some key factors for their business,
including what consumers want from them, how their product or service meets or
fails to meet those needs, how their product or service is perceived in the world, how
they stand out from their competitors, and how they interact with their customers.

KEY TAKEAWAYS
The four Ps are the four essential factors involved in marketing a good or
service to the public.
These are the four Ps: the product (the good or service), the price (what the
consumer pays), the place (the location where a product is marketed), and
promotion (the advertising).
The concept of the four Ps has been around since the 1950s; as the
marketing industry has evolved, the concepts of people, process, and
physical evidence have become important components of marketing a
product, too.
 CLICK
CLICK TO
TO PLAY
PLAY

1:38

Four Ps

Understanding the 4 Ps
Neil Borden popularized the idea of the marketing mix—and the concepts that would
later be known primarily as the four Ps—in the 1950s. Borden was an advertising
professor at Harvard University. His 1964 article titled "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.

When they were first introduced, Borden's ideas were very influential in the business
world and were developed and refined over a number of years by other key players in
the industry. It was actually E. Jerome McCarthy, a marketing professor at Michigan
State University, who refined the concepts in Borden's book and created the idea of
the "4 Ps," a term that is still used today. In 1960, McCarthy co-wrote the book "Basic
Marketing: A Managerial Approach," further popularizing the idea of the 4 Ps.

At the time the concept was first coined, the marketing mix helped companies
account for the physical barriers that prevented widespread product adoption.
Today, the Internet has helped businesses achieve a greater level of integration
between businesses and consumers, and also to overcome some of these barriers.
People, process, and physical evidence are extensions of the original 4 Ps, and are
more relevant to the current trends in marketing.

Tip: Any successful marketing strategy requires revisiting over time. If you
are developing a 4 Ps strategy for your business, it's important to
understand that the elements of the first marketing mix you create are not
intended to be static; they are meant to be adjusted and refined as your
company's product grows and as your potential buyers change.

How the Four Ps Work

Product
Product refers to a good or service that a company offers to customers. Ideally, a
product should fulfill an existing consumer demand. Or a product may be so
compelling that consumers believe they need to have it and it creates a new demand.
To be successful, 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
their life cycle. The type of product also partially dictates how much businesses can
charge for it, where they should place it, and how they should promote it in the
marketplace.

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. As of November 2018, Apple
stopped providing public sales figures for the iPhone. However, as of November 1,
2018, total sales of the iPhone equaled $2.2 billion. Apple revealed that it had sold its
one billionth iOS device on November 22, 2014. And in 2018, the company announced
they were approaching selling their two billionth iOS device. [1] [2]

Price
Price is the cost consumers pay for a product. Marketers must link the price to the
product's real and perceived value, but they also must consider supply costs,
seasonal discounts, and competitors' prices. In some cases, business executives may
raise the price to give the product the appearance of being a luxury. Alternatively,
they may lower the price so more consumers can try the product.

Marketers also need to determine when and if discounting is appropriate. A discount

can sometimes draw in more customers, but it can also give the impression that the
product is less exclusive or less of a luxury compared to when it is was priced higher.

UNIQLO, headquartered in Japan, is a clothing manufacturer of global casual wear.

Like its competitors—other famous causal wear brands such as Gap and Zara—
UNIQLO creates low-price, daily-use garments.

What makes UNIQLO unique is that it creates innovative, high-quality products. It is

able to accomplish this by procuring its fabric from its material manufacturer
partners, securing stable, high-quality materials at low cost by ordering in large
volumes, and continuously seeking the highest-quality and lowest-cost material in
the world. The company also directly negotiates with its manufacturers and has built
strategic partnerships with high-quality and innovative Japanese manufacturers.

UNIQLO also outsources its production to partner factories; because it doesn't own
its own factories, it has the flexibility to change production partners if the best
production location changes over time. Finally, the company employs a team of
skilled textile artisans that it sends to its partner factories all over the world for
quality control. In addition, production managers visit factories once a week to
resolve quality problems. [3] 

Place 
When a company makes decisions regarding place, they are trying to determine
where they should sell a product and how to deliver the product to the market. The
goal of business executives is always to get their products in front of the consumers
that are the most likely to buy them.

In some cases, this may refer to placing a product in certain stores, but it also refers
to the product's placement on a specific store's display. In some cases, placement
may refer to the act of including a product on television shows, in films, or on web
pages in order to garner attention for the product.

The 1995 movie GoldenEye was the seventeenth installment in the James Bond
movie franchise. It was the first Bond movie not to feature an Aston Martin car.
Instead, the British actor Pierce Brosnan got into a Z3 by BMW. 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. [4] 

Promotion
Promotion includes advertising, public relations, and promotional strategy. The goal
of promoting a product is to reveal to consumers why they need it and why they
should pay a certain price for it.

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

The Swedish vodka brand Absolut sold only 10,000 cases of its vodka in 1980. But 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, the bottle made of stone, or as the
outline of trees on a ski slope. To date, this Absolut advertising campaign is one of the
longest-running continuous ad campaigns of all time, from 1981 to 2005. [5] [6]

4 Ps of Marketing FAQs
What do the 4 Ps mean in marketing?
Product, price, promotion, and place form the 4 Ps of the marketing mix. These are
the key factors that are involved in the marketing of a good or service.

What are the 4 Ps of marketing and examples?

The 4 Ps of marketing are place, price, product, and promotion. By carefully
integrating all of these marketing strategies into a marketing mix, companies can
ensure they have a visible, in-demand product or service that is competitively priced
and promoted to their customers.

Place refers to where and how people buy your product. Some examples of places
consumers can buy products and services include online via a web browser, through
a smartphone app, retail locations, through trade shows or events, through
marketplace channels like Amazon or Walmart, or through a sales professional.

Price refers to how much your product or service costs. How you price your product
depends on your competitors, demand, cost to produce the product, and what
consumers are willing to spend. Companies also need to consider their pricing
models, including choosing between one-time purchases and subscription models.
Product refers to the product or services your business provides to your target
audience. The product a company provides can vary significantly depending on the
type of company and what they do. For example, McDonald's provides consistent fast
food, including hamburgers, french fries, and chicken products, whereas Salesforce
provides customer relationship management (CRM) software and marketing
automation tools for businesses.

Promotion refers to specific and thoughtful advertising that reaches a company's

target market. A company might use an Instagram campaign, a PR campaign that
showcases a product, or an email campaign to reach its audience at the right place
and the right time.

How do you use the 4 Ps of marketing?

The model of the 4Ps can be used when you are planning a new business venture,
evaluating an existing offer, or trying to optimize your sales with your target
audience. It can also be used to test your current marketing strategy.

The Bottom Line

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

ARTICLE SOURCES

Related Terms
Marketing Strategy
A marketing strategy is a business's general scheme for developing a customer base for the product or service the business provides.
more

Marketing Mix
A marketing mix includes multiple areas of focus as part of a comprehensive marketing plan. The term often refers to a common framework
known as the four Ps.
more

Everything Marketing Entails

Marketing refers to the activities of a company associated with buying, advertising, distributing, or selling a product or service.
more

Viral Marketing
Viral marketing seeks to spread information about a product or service from person to person by word of mouth or sharing via the Internet or
email.
more

Understanding Product Differentiation

Product differentiation is the process of identifying and communicating the unique qualities of a brand compared to its competitors.
more

Mobile Marketing
Mobile marketing utilizes multiple distribution channels to promote products and services via mobile devices, such as tablets and smartphones.
more
Partner Links

Related Articles
MACROECONOMICS
Advantages of a Market Economy

MARKETING ESSENTIALS
How Do Brand Image and Marketing Affect Market Share?

ECONOMICS
What is the utility function and how is it calculated?

MICROECONOMICS
Elasticity vs. Inelasticity of Demand: What's the Difference?

MACROECONOMICS
What are the most important aspects of a capitalist system?
 MACROECONOMICS
How and Why Companies Become Monopolies

About Us Terms of Use Dictionary

Editorial Policy Advertise News

Privacy Policy Contact Us Careers

TRUSTe
California Privacy
Notice

Investopedia is part of the Dotdash publishing family.