Every business needs a marketing strategy. It introduces the company’s goods and services to potential customers, and informs existing ones of additional opportunities to buy.
Forming the foundation of that strategy are four core marketing principles that enable the effective execution of a marketing strategy. Understanding each of these marketing terms is the key to building a strong strategy.
At a glance: Here are the principles of marketing
Overview: What are marketing principles?
These basic marketing principles, often referred to as the four Ps or the marketing mix, are a framework that underpins marketing 101.
By mixing these four ingredients in different ways (hence the term marketing mix), you can produce a synergy between all four that drives product adoption within your target markets.
The marketing mix concept was introduced in the 1950s and was refined into the four Ps framework in the 1960s. It identifies the key high-level areas to address as part of any marketing plan, such as a go-to-market strategy for launching a product.
The elements that make up each area form the tactical components of a marketing strategy.
It’s important to note that the customer is the focal point of each area in the marketing mix. Also, these areas are interdependent; they work together to complement and align all the parts of a marketing plan.
Moreover, the marketing mix is fluid, allowing the marketing team to emphasize any one area in the strategy as needed based on market conditions and what’s best for the targeted customer segment.
The four principles of marketing
Because the labels in the marketing mix are so broad, it’s helpful to examine each in detail to understand these four principles and how they work together.
Principle 1: Product
The marketing mix starts with the goods or services offered by the business. Anything sold to generate revenue can be classified as the product part of the marketing mix, from manufacturing razor blades to providing legal advice.
The product should solve a problem or need for the customer. The benefits of the product should be communicated through the lens of the customer.
You might think your product is fantastic, but a skeptical customer wants to know what makes it different from that of your competitors, and how it will meet their needs.
This means you’ve got to understand the customer as well as, or even better than, the product.
Ways you can understand your customer:
- The buyer persona: To that end, a tool like the buyer persona, a profile of the customer characteristics that are a fit for your offerings, can help articulate the types of customers you’re targeting for the product. This ensures an alignment between product benefits and customer needs.
- Product branding: Think about how you want customers to perceive the product’s brand. Is your product a premium good or service? Is it utilitarian, efficient, or inexpensive? This affects how customers perceive your offering, as well as how you may want to name and package the product.
- Product life cycle: Understand where your product is in its product life cycle. Is it a new product, or perhaps it’s been around awhile? This affects how customers react to the product. If it’s new, consumers need to be educated about it. If it’s been around, perhaps they’ve already tried it.
A real world example is the Happy Meal product sold at McDonald’s. The Happy Meal combines food and a beverage with a toy, and is designed for customers who are children, down to its name and packaging.
Principle 2: Price
This part of the marketing mix is about determining the price for your goods or services.
There are many different strategies for pricing that can be employed here, but ultimately, it’s about lining up your business and marketing objectives with an understanding of what price the market will bear.
You’ll want to align pricing with the value customers perceive for the product. This means you understand the value of your offering from the customer’s perspective, which also includes their time and effort to acquire the product.
If customers view your offering as unique or high value, you can charge more. If customers view the product as on par with competitors’ products, you may need to discount your price below the competition to earn customers.
Ways you can align your pricing with your customer:
- Pricing research: Perform research to understand the competitive landscape, what customers think of your offerings, and what internal stakeholders, like a sales team, have experienced when selling the product.
- Company goals: While the pricing strategy you adopt should be in line with customer expectations, it should also support company objectives. For example, if the goal is to grow your customer base, you may need to employ promotional pricing to compel new customers to try your offering.
- Test, evaluate, and repeat: Pricing is challenging to nail on the first try, so experiment with different pricing strategies until you find one that resonates with customers and meets business objectives.
In the case of the Happy Meal, McDonald’s uses a pricing technique called bundling. The price of the combined food and beverage is less than the price of buying the items individually, which encourages customers to buy the Happy Meal.
Principle 3: Place
This component of the marketing mix speaks to where and how easily customers can acquire the goods or services.
Is a purchase possible online? For a service, what’s the geographic area being served? If you sell your product to businesses, distribution considerations like the logistics to get shipments to your business clients fall into this area.
Always provide an online destination, even if you offer a service. Customers generally perform research online to help them discover buying options and make a decision. Without an online destination like a website, you’re giving competitors an advantage.
Ways to provide customers a place to find you:
- Website alternatives: If your business does not have its own website, even setting up a presence on sites that your customers frequent can do the trick. For example, businesses of all sizes have Facebook pages.
- Support mobile devices: Even if you have your own site, is it mobile friendly? This means the site has to look good and function well on mobile devices like smartphones and tablets. If not, it can turn customers off.
McDonald’s uses a variety of methods to distribute its Happy Meal product. As part of its restaurant marketing strategy, the company has a mobile app where customers can order a Happy Meal and pick it up in person or have it delivered. Even in the restaurant, customers can choose the cash register as the place to order or skip the line and order at an in-store kiosk.
Principle 4: Promotion
This area encompasses the tactics used by the business to communicate with customers across all of its marketing channels.
Included in this principle are tactics like advertising, direct marketing methods, public relations, email marketing, social media, database marketing, special promotions, communications strategies, and in-person appearances (such as at a trade show).
Given all it includes, the promotion piece of the marketing mix contains perhaps the largest number of elements to juggle. Because the choice of tools is so vast, it’s helpful to peruse reviews like the best email marketing software.
Your choice of marketing tactics and tools should complement your marketing plan, which is driven by your product positioning.
Create a product positioning statement that will serve as the heart of promotion efforts. It encapsulates all the elements in the marketing mix in a sentence or two, so that it can serve as a kind of north star guiding your marketing ship.
Ways to create a promotion:
- Positioning across tactics: Every promotional tactic should echo elements of the positioning statement so that its themes thread through all your marketing. This creates a cohesive message to customers.
- Measurable goals: When developing promotional tactics for a marketing campaign, ensure each has a measurable goal. Examples of measurable goals include the number of visits to your website for a direct marketing campaign, brand lift percentages for a television ad, and email open rates for an email marketing campaign.
Going back to our McDonald’s example, the company frequently leverages partnerships with corporations like Disney to tie its Happy Meal toy to a movie that appeals to children.
Its most recent Happy Meal promotions included tie-ins with Disney’s Frozen 2 movie and Star Wars: The Rise of Skywalker. McDonald’s used commercials on television and YouTube to spread the word.
A last thought on the marketing principles
While the four Ps model lives on today, other frameworks have emerged, such as a seven Ps version for businesses selling services.
Personally, I found these other models added unnecessary complexity, and the traditional marketing mix stood the test of time for the products I launched. The key is to remember that the end goal is to have a happy, satisfied customer.
By aligning the marketing principles to the target customer markets, you’ll be able to achieve this goal, and grow your business.
View more information: https://www.fool.com/the-blueprint/principles-of-marketing/