What is the marketing mix? The 4Ps, 7Ps and how it works

The marketing mix is sometimes treated as a synonym for the abbreviations 4P, 5P, 7P, 8P or 4C. It is an extremely well-known academic term and, for most people, an empty one. In practice, it is often brought up by people who have only read the first chapter of a marketing book and are trying to cling to the term. In this article, I will try to present the marketing mix from a slightly different angle and show you the questions you should know the answers to.

The marketing mix

The marketing mix most often refers to four key elements of a marketing strategy: product, price, place and promotion. If a business or a marketing agency pays attention to these four components of the marketing mix, it can maximise the chances that a product or service will succeed with customers. Simply put, a company that frames its efforts within the marketing mix has a chance to make money and save time. The 4Ps sit on the border between marketing and the actual running of a business. Before you start, try to answer these five questions too, which I use for orientation at the start of working with a client.

1. What is it for?
2. Who is it for?
3. What makes it different?
4. What are its advantages?
5. And why should anyone care at all?

How does the marketing mix help?

• You look at the business from a different angle.
• It helps you create a marketing strategy.
• Optimising resources and investments: you find out what is useful and what is not.
• Increasing efficiency.
• New perspectives on promotion.
• It helps uncover mistakes and stereotypes.

The 4Ps of the marketing mix

The 4P classification for creating an effective marketing strategy was first introduced in 1960 by marketing professor and author E. Jerome McCarthy. It was published in a book titled Basic Marketing: A Managerial Approach. Even before that, it was mentioned by another marketing professor in 1948 in the article The Management of Marketing Costs. Depending on the industry and the goal of the marketing plan, marketing strategists or managers may approach each of the four Ps differently. They are different tools of the marketing mix. Each element can be examined separately, but in practice they often depend on one another. McCarthy introduced this concept as part of a managerial approach that included analysis, consumer behaviour, market research, market segmentation and action planning.

Product

The item or service being sold must satisfy a consumer’s need or desire. Or create that need. It is said that a great product needs no advertising or promotion, but the vast majority of products are somewhere in the middle. To bring a product or service to market effectively, it is important to determine how it differs from competing products or services and what it will give consumers (how it will delight them).

The example of Apple shows that some features matter more to its customers than others, and the company adapts to these needs and refines them. Above all, Apple knows that its users want connectivity and continuity across its range of products, not, for example, open software and customisability (that is what Android does).

With a product, it is also important to determine whether other products or services can be brought to market alongside it. Packaging or the way the product is presented is often treated as one of its attributes too. The character and development of a product may be driven by the energy of the company or its founder. Often, however, marketing people or consumer wishes also shape further products and services.

• What does the customer expect from the product or service? What design, quality and packaging does it have, and what feeling or emotion does it convey?
• What needs does it satisfy? Or what situations is the consumer in when buying the product?
• What does it look like? How and where will customers come across it?
• What features, dimensions, colours, brand display and so on should it have?
• How does it differ from your competitors’ products?

Price

A product should be sold at a price that matches consumer expectations, meaning neither too low nor too high. The right price is not the lowest possible one, nor the one that suits the company. At certain stages, the right price may be below the cost of the product, and sometimes it may carry a 1,500% margin. Marketers must take into account the costs of research and development, production, marketing and distribution, otherwise known as cost-based pricing.

Pricing based mainly on the quality or value perceived by consumers is known as value-based pricing. Value-based pricing plays a key role for products regarded as status symbols, such as luxury clothing brands. But we can safely include the iPhone here too, which has significantly higher margins than its competitors, simply because it wants to be premium and reflects a certain status. Setting the price goes hand in hand with communicating it, which is the “why”.

• What value does the product or service have for the buyer?
• Are there established prices for products or services in this area that you need to work from or communicate against?
• Is the customer price-sensitive? Will a small price cut win you more market share? Or will a small price increase go unnoticed, giving you an attractive margin?
• Do you want to work with discounts? What discounts should you offer to trade customers or other specific segments of your market?
• How will your price compare with the competition?

Promotion

For many people, promotion and advertising are the same as marketing. When someone hires a marketing agency, they mainly want it to promote the product and do not let it near the other Ps very much. That is why we can say that advertising agencies and specialists mostly look after the promotional mix, even though people often talk about the marketing mix. To be completely precise, the promotional mix in this case is one of the four subsets of the marketing mix.

Promotion is divided mainly into two areas.

1. On the one hand, we decide what our brand will say (communicate), how it will be positioned against its competitors, which associations it will target, what benefits it will have, its advertising slogan and how it will speak to its customers.
2. In the next phase, we deal with the promotional or media mix, which is often also called the marketing mix (which is a little confusing). The media mix determines which channels will be used for promotion and how much money will be allocated to them (and possibly what their role in the mix is). For big brands, the traditional components of the media mix include television, video advertising, print and outdoor campaigns. More accessible channels, even for smaller brands, include the website, online advertising (PPC, SEO), email marketing, social media and banner ads. Social media in particular, whether paid or unpaid, has become a huge marketing playground that largely determines a brand’s success.

Promotion usually also includes selecting, segmenting and targeting the audience, that is, who we will communicate with. This is essentially a prerequisite for creating the brand’s marketing message, because we need to know who we want to communicate with. Both should be preceded by desk research, a study or some kind of insight.

• What marketing message or framing will significantly move your product or service forward?
• Where and when can you deliver your marketing messages to your target audience?
• Promotional or marketing mix: Will you reach your audience with advertising online, in print, on TV, on the radio or on billboards? Through direct marketing emails? Through PR? Online, in organic search, with Google Ads?
• When is the best time to promote? Is there seasonality in the market? Are there any wider external issues that suggest or dictate the timing of the launch or subsequent promotion?
• How do your competitors promote themselves? What messages and promotional mix do they use? And how does that affect your choice of promotional activities?

Tip: Also read my article on what marketing is.

Place

The place where a product can be bought is important for optimising sales. Will the product be available in every shop, will it be sold only online, or in specialist shops offering a great shopping experience? For luxury goods that customers buy once in a while, it is better if availability is limited and in a special place. Conversely, everyday consumer goods need to be always to hand, so the customer does not have to think about it. The Czech translation “místo” (place) can be a little misleading, but this point also covers the distribution channels of your product or service: everywhere it will be available and in what form.

• Where do buyers look for or expect to find your product or service?
• If they look in a shop, which kind? A specialist boutique, a supermarket, or online?
• How can you gain access to the right distribution channels that will maximise potential interest in your product or service?
• Do you need to use a sales force? Or attend trade fairs? Or sign up online? Or send samples to catalogue companies?
• What are your competitors doing, and how can you learn from them and/or differentiate yourself?

Uncovering mistakes

As I wrote in the introduction, the marketing mix will help you make money and save time. It can send clear signals that there is a problem somewhere before a lot of money is burnt.

Price: you must always be able to explain the price, or rather the value, to your customers. From a marketing point of view, pricing at (costs + 30%) or at 100% above costs has never paid off. You always need to keep an eye on something and understand the context and the market. You must clearly explain to customers that your product is worth as much as the price or more. Setting your price 20% below the competition is often the worst strategy.

Wrong place: poor or insufficient distribution. Choosing to communicate in places where your customers are not.

Weak product: if you look at your product and it seems worse than the competition in every respect, you will fail in 90% of cases. However, there are also companies and marketing campaigns that have managed to build a great story around products that seemed uncompetitive at first glance.

Poor marketing and promotion: a good product sells itself. Many people hold this distorted belief. Even the best products and services need promotion. The best-selling products are often not the best ones, but they have a successful story and long-term promotion behind them.

The 7Ps of the marketing mix

Since the 1970s, however, marketing has evolved considerably. The 4Ps became, if not outdated, then at least very incomplete. A theoretical concept turned into an archaic theoretical concept. In the 1980s, marketing theorists called for a revision of the 4Ps, which led to the extended 7P marketing mix. The 4P concept matched the physical world before the internet, which required more aspects and had different dynamics.

The 4P marketing mix was designed at a time when businesses sold products rather than services. The economy was centred on heavy industry. Today, thanks to automation, the focus has shifted to services and companies’ marketing costs have risen significantly! The 7P framework helps companies review and define the key questions that affect the marketing of their products and services. The 7Ps are much more relevant to the digital world of the early 21st century.

People

A company’s people are at the forefront of communication with customers. They receive and handle their enquiries, orders and complaints in person, via online chat, social media or a call centre. They communicate with customers throughout their journey and become the “face” of the organisation for them. Their behaviour often decides whether a customer buys from or recommends the company.

Their product knowledge, their ability to reach relevant information, and their everyday attitude and helpfulness all need to be optimised. People can be inconsistent, but with the right training, empowerment and motivation from the company, they can also be an opportunity to differentiate the offer in a crowded market and build valuable customer relationships.

Physical evidence

Physical evidence (persuasive evidence) provides tangible information about the quality of the experience a company offers. It can be especially useful when a customer has not yet bought from the organisation and needs reassurance, or when they are expected to pay for a service before it is delivered. PR and reputation management are meant to influence this evidence and these attributes in the company’s favour.

For a restaurant, physical evidence can take the form of the setting, staff uniforms, menus and, these days, often online reviews that suggest what experience to expect. For an agency or a SaaS company, the website itself is valuable physical evidence (from testimonials to case studies), as are the contracts companies receive that set out the services they can expect to be provided. Impressive buildings and well-trained staff can also further build credibility (trust) in the company.

Process

Every company wants to create a smooth, efficient and customer-friendly journey (customer journey), and this cannot be achieved without the right processes behind the scenes to make it possible. Understanding each step of the customer journey, from an online enquiry to requesting information and making a purchase, helps us consider which processes need to be put in place for the customer to have a positive experience.

At which points can a customer come into contact with our brand, and what do they take away from that experience? When a customer submits an enquiry, how long will they wait for a reply? How long will they wait between booking a meeting with the sales team and the meeting taking place? What happens once they place an order? How do we make sure reviews are generated after a purchase? How can we use technology to make our processes more efficient? All of these considerations help build a positive customer experience.

PACKAGING. The way a product is packaged or presented is often separated from the product and treated as a separate P. Packaging is what shows your product in the best light, conveys its price and value, communicates its benefits to consumers and physically appears at various points of distribution. It can be flamboyant, benefit-led or minimalist. Your product may be the best on the market, but its packaging has to support that. It is the first thing people see, and within a few seconds it can grab their attention, shock them, bore them or distract them.

Another approach is Lauterborn’s 4Cs, which present the elements of the marketing mix from the buyer’s point of view rather than the seller’s. It consists of:

• Customer needs and wants (the equivalent of product).
• Cost (price).
• Convenience (place).
• Communication (promotion).

Both aim to increase sales, but the 4P model focuses more on the internal processes of a marketing strategy, while the 4C model focuses more on the external processes that can influence the customer when buying.

Whichever of these marketing mixes we start working with more systematically, we must remember that it creates a clear position for our organisation in customers’ minds. This helps us stand out from the competition and become memorable, popular and successful. If you think of each P openly as a separate pillar, using them together will give us a solid foundation for a comprehensive marketing strategy.

Marketing mix examples

The following examples are simplified and the prices are only illustrative. They show how the individual elements fit together for different types of business.

A neighbourhood coffee shop

Product: speciality coffee and pastries baked every morning. Price: a flat white for around $5, slightly above the chain round the corner, justified by quality. Place: one location near offices, plus ordering ahead by phone. Promotion: a loyalty card, social media and a board on the pavement. People: baristas who remember regulars. Physical evidence: the interior, the cups and online reviews. Process: how quickly a customer gets coffee during the morning rush.

A B2B software company

Product: an invoicing tool for small firms. Price: a monthly subscription of, say, $30 per user with a free trial. Place: direct online sales and accountants recommending it to their clients. Promotion: articles, webinars and referrals. People: the onboarding and support team. Physical evidence: case studies, a product demo and clear contracts. Process: how fast a new client sends their first invoice.

How to build your marketing mix step by step

• Define the customer and the need. Every other decision depends on who you sell to.
• Describe the current state of each P honestly. Write down what you actually do, not what you plan to do.
• Compare each P with two or three main competitors. Note where you are clearly better and where you lag behind.
• Fix the weakest P first. More promotion will not help if the product or distribution is the real problem.
• Check consistency. A premium price sold through discount channels with bargain messaging sends mixed signals.
• Review regularly. Revisit the mix whenever the market, your costs or your competitors change.

A common mistake is to let each department own one P without talking to the others. Sales sets discounts, the agency runs campaigns and product development adds features, and the result does not add up. The mix works only when one person looks at all the elements together.

4Ps or 7Ps, which marketing mix should you use

The 4Ps of marketing work well when you sell physical goods and the buying moment is short. Your customer mostly judges the product, its price and how easy it is to get. Think of groceries, cosmetics or household goods sold in shops or online.

The 7Ps of marketing fit better when you sell services, subscriptions or anything built on a longer relationship. There is often nothing to touch before paying, so your customer also judges the people, the process and the evidence that the experience will be good.

• Use the 4Ps for consumer goods, simple products and retail ranges.
• Use the 7Ps for services, B2B, hospitality, education and software.
• If you are unsure, start with the 7Ps. The three extra questions take little time and often reveal gaps the 4Ps hide.

Frequently asked questions about the marketing mix

What is the marketing mix?

The marketing mix is a set of elements you can control to bring a product or service to market successfully. The best-known version has four parts: product, price, place and promotion. Extended versions add further elements, mainly for services.

What are the 4Ps of marketing?

The 4Ps are product, price, place and promotion. Product is what you sell, price is what the customer pays, place is where and how they can buy it, and promotion is how you tell them about it. Together they form the classic marketing mix introduced by E. Jerome McCarthy.

What are the 7Ps of marketing?

The 7Ps add people, process and physical evidence to the original four. These extra elements matter most for services, where the customer cannot inspect anything before paying. They cover the staff, the customer journey and the tangible signs of quality.

What is a good marketing mix example?

A local coffee shop is a simple example. It sells quality coffee (product) at a slightly higher price than chains (price), in a convenient location (place), supported by a loyalty card and social media (promotion). Friendly staff, a pleasant interior and fast service cover the remaining three Ps.