Is There Such Thing As the Four Ps of Marketing?


Is there such thing as the four Ps of marketing? Temporarily being debated and alternative approaches suggested frequently from across the globe, this is a very valid question in today’s business environment. The industry mix has changed from vastly manufacturing to service-based, which implies various new needs in creating a strong marketing mix that go beyond the traditional four Ps. But does that mean the four Ps have become obsolete?

Let’s start from the beginning. What is the marketing mix and what have the four Ps to do with it? Marketing mix is described as “the set of controllable tactical marketing tools–product, price, place, and promotion–that the firm blends to produce the response it wants in the target market” (Armstrong & Kotler, 2008). Controllable means that these marketing tools are internal factors that an organization has direct influence on, for which reason it can proactively construct and change them according to their needs at anytime. While it is difficult or in most cases impossible to change the marketing mix within a very short time, its limit of anytime is described by the ability of the organization to spend time and ultimately money on this change and its implementation. Having already mentioned product, price, place, and promotion, it is relatively clear what the marketing mix’s four Ps stand for. Product, price, place, and promotion–short the four Ps–are the four internal factors, or the controllable tactical marketing tools as Armstrong & Kotler describe them. Virtually everything that an organization has direct control over can be described under one of these four Ps.

 

The Four Ps of Marketing

The Marketing Mix: Product, Price, Place, Promotion

 

The term marketing mix has first been introduced by Neil Borden during his speech at the American Marketing Association in 1953, and it was Jerome McCarthy who suggested the actual four Ps that are prevailing until today in 1964 (Encyclopedia of management, 2009). Analysing the market situation that they have grown up and made their experiences in, one has to note that it has changed dramatically over the last 100 years. In the early 20th century, the product-making industry was dominating with a market share of around 70 percents. Around the time of the mentioned introduction of the marketing mix in the 50s and 60s, the U.S. had just past the point, where its product-making industry has lost its dominance to service industries. While this was for the first time in U.S. history and white-collared workers were more plentiful than blue-collared workers, the business environment and mentality has not changed immediately but only over time. In fact, all the way up to today, we still use many concepts that had been developed for the product-making industries. While this isn’t necessarily bad and not useful in the service sector today, which dominates the U.S. market with more than 80 percents as of 2009, research has moved to reinvent and translate many concepts into a more practical and useful way for the service industry.

One has to realize and keep in mind that the vast minority of organizations do neither fall under the pure (tangible) product category or the pure (intangible) service category. In fact, most organizations today provide a mix of products and services, in which sometimes the product and other times the service part of the business operation dominates. Purely tangible products are, for instance, salt and soap. There are usually no services that come along with these products. On the other hand, insurances and financial services are pure services and are usually not accompanied by any tangible products. In between there are many constellations possible. For instance, a restaurant’s core offer is food, a tangible product. However, restaurants provide usually a lot of services, such as reservation, wardrobe, service personnel, home deliveries, and much more. Thus the vast majority of organizations have at least some services that accompany products, and the following is important for virtually all organizations.

Looking at the dominating service sector, it is no surprise that scholars from around the globe try to come up with new concepts. While there are many suggestions to change and add to the marketing mix, many have argued that the four Ps ignore at least one crucial factor that plays a strong role in providing services: the human factor (people). Without any doubt, the human factor cannot be separated from providing services. Whenever a customer seeks a service, the employee is not only the one consulting and selling it to the customer but also the one who designs and creates it. Thus many things of the service quality depend on the skills and behaviour of the employee. One point that makes controlling the human factor difficult is the fact that it may change frequently. It is not possible to copy the very same service again, as it is created on the spot and a lot depends on the individual employee/customer interaction. Thus, proper employee training is indispensable in order to ensure the quality provision of services.

Proper employee training is indispensable in order to ensure the quality provision of services.

For this very human “error,” some scholars also demand to add another tool to the marketing mix, the process. In fact, many companies already use it effectively. The goal is to define exact processes that the employee has to adhere to, possibly including everything from the first customer contact point, its consultation processes, and what to do when problematic and critical situations arise. This is called process mapping, or blue printing, which is a “description of how your organization works” (Australian Government, 2006). As there are many different processes and not only one in most organizations, it is common to design such blue prints for different processes. According to the Australian Government publication, it will:

  • “provide a picture of what happens now,
  • highlight where things aren’t working well,
  • show everyone how things happen,
  • help to assess the flow of activity,
  • help to work out how resources (money and staff) are used,
  • help to work out how many services one can deliver, and how well the organisation can deliver them,
  • provide the baseline data for improving services and measuring how well the changes work.”

Process mapping, or blue printing, can be seen as a guiding map for management as well as a good starting point to educate the employees. Once there is a process map laid out, one can relatively easy change points that don’t quite work yet and compare the new process with the old one, thus helping to decide whether it is an effective change, or not.

Process mapping, or blue printing, can be seen as a guiding map for management as well as a good starting point to educate the employees.

There is at least one more crucial factor that is very relevant in the service sector. Can you picture some old and dirty factory? You probably can; but then, it doesn’t really matter too much as you will most likely never get to see where exactly your product comes from. That is very different in the service sector. Here the service provision, or the employee-customer interaction, is directly linked to its “place of production.” As we all know, the first impression we make of places, people, and many other things make up an important part of our perception of it. Thus, in the service industry, it is important to create a good first impression, and in a way it constitutes pre-service value to the potential customer. A simple example, would one enter the old and dirty-looking hairstylist shop or go to the shop next door, which is modern, light, clean, and thus indicates a better service (assuming all other outside indicators are the same)? Most of us would probably choose the latter option. As this is true for all service organizations, it has proven important to invest in this first impression and create appealing physical evidence. This may not directly be linked to the quality of the service but is important to gain competitive edge and differentiate one’s organization from another. Moreover, it is response to contemporary customer demands.

Service provision, or the employee-customer interaction, is directly linked to its “place of production.”

There are other suggestions for adding points to the four Ps of marketing. Payment, for instance, is one of them. However, as it is mostly included in the price factor, adding this point seems redundant and just complicating the marketing mix. As you may have noticed, all the latter three mentioned points–people, process, and physical evidence–can also be written to start with the letter P. Although there is no actual reason not to name them differently, it is convenient to remember them and the traditional four Ps of marketing as the seven Ps of service marketing. This has become the most discussed and famous alternative to the four Ps, now including crucial points for the provision of services. Thus it reflects the changed market environment and industrial mix.

One needs to keep in mind that the product and place tools stay for the seven Ps of service marketing, but they appear in a slightly alternate form. As services are intangible, they do not come in physical forms, thus don’t require packaging, warranty, functionality, and anything else that relates to tangible products. The place tool does not include inventory, for example, because one characteristic of services is that they cannot be stored for later use; they are created on demand on the spot in a timely manner. However, as already mentioned above, most companies offer a mix of tangible and intangible products, for which reason all points may become important for some organizations. The following graphic was made for pure service organizations and does not list the points mentioned in the beginning of this paragraph.

 

The Seven Ps of Service Marketing

The Service Marketing Mix: Product, Price, Place, Promotion, People, Process, Physical Appearance

 

Don’t the factors people, process, and physical appearance exist in product industries as well? Yes, they do. However, they do not play a direct role for the customer. While they only have an “invisible” background role in product-making industries, they play a vital and active role in the provision of services because they are directly linked to the customer experience. Remember the definition of marketing mix: “[…] blends to produce the response it wants in the target market” (Armstrong & Kotler, 2008). And only in service organization can these points directly create a response from customers.

To conclude the discussion about the validity of the four Ps of the marketing mix today, no one was able to prove that they are not valid anymore in today’s business mix and environment. Moreover, the four Ps have provided the fundamental concept in marketing, thus are not obsolete, and are the basis for many other concepts, including the seven Ps of service marketing. They are an integral part of creating value because they are a centre part of all organizations’ marketing strategies. For more information on how to create real value for customers, please read the article “From Customer Needs to Real-Value Market Offerings.”

 

Resources:

  • Armstrong, G., & Kotler, P. (2008). Marketing: An introduction. (9th ed., pp. 69-90). Upper Saddle River, NJ: Pearson Prentice Hall.
  • Australian Government. (2006) Section 4: Process mapping and service mapping. Retrieved October 24, 2012 from Department of Health and Ageing: http://www.health.gov.au/internet/h4l/publishing.nsf/Content/B0FE45B081C0C476CA2571950002F337/$File/section%204.1.pdf
  • Dominici, G. (2009). From Marketing Mix to E-Marketing Mix: a Literature Overview and Classification. International Journal of Business and Management.
  • Service Industry. (2009) Encyclopedia of Management. Retrieved October 24, 2012 from Encyclopedia.com: http://www.encyclopedia.com/doc/1G2-3273100265.html

 

 

Feedback in forms of comments, ratings, or e-mail contact highly appreciated!

 


 

The Author: Konstantin von Brocke is a German international magna cum Laude business management student at the University of Wisconsin-Stout and enthusiastic about marketing and sales, strategy and risk management, and business development and consulting.

 

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2 thoughts on “Is There Such Thing As the Four Ps of Marketing?

  1. Pingback: Why the big name brand? | The Marketing Loe-Down

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