One of the most enduring concepts in marketing, the 5 Ps of marketing, dates to the 1940s.
Originally conceived as the four Ps of the marketing mix, the first known mention, according to Wikipedia, is attributed to Prof. James Culliton of Harvard University, who featured the Ps in his article The Management of Marketing Costs.
Here are the 5 Ps of marketing as originally conceived (the last one was subsequently added):
- Product: The design, niche, and functionality of the offering.
- Price: How the product is priced, compared to competitors.
- Promotion: How key messages about the product reach the public.
- Place: Distribution and fulfillment channels and geographical availability.
- People: The team involved in selling the product.
Together these factors make up the classic marketing mix. They can either be thought of as five essential components, or alternatively as five parameters which can be adjusted, depending on the marketing strategy that’s being adopted.
Let’s look in a little more depth at each of the five Ps for marketers and business owners.
1. Product: What you’re selling
There’s a lot to consider in your product. It’s not simply its design and functionality, but also how it’s packaged, whether there’s a warranty or guarantee, and whether support is included (in the case of a digital product).
For some items, particularly high-quality luxury products like watches and cars, product design can be (almost) everything. For other items, such as FMCGs (fast-moving consumer goods) product is important but customer satisfaction is often less brand loyal when price or availability become more significant factors.
Product development activities such as focus groups and applying sentiment analysis to consumer reviews can help refine your product and address any concerns. These product decisions can also provide key insights into the USPs (unique selling points) of your product.
2. Price: How much you’re selling it for
Price is almost always a factor in consumer choice (with the possible exception of elite luxury products such as jewelry and supercars). But pricing is not as simple as checking what the competition are charging (although that’s important too). Dynamic pricing has become a popular concept, with retailers such as Amazon offering products at prices which fluctuate, sometimes hourly, with changing patterns of demand and availability.
Digital product categories such as SaaS websites (software as a service) often provide a range of pricing tiers, allowing businesses of all sizes to find a subscription model which fits their specific use case. They can also provide substantial discounts because distribution costs (downloads) are minimal. Much will depend upon the instincts of your sales reps, and the parameters within they are permitted to operate.
For services and physical goods alike, pricing has a minimum floor, providing an acceptable profit margin. There is generally a maximum ceiling too, which is whatever the market will currently accept. Well-established and fashionable bands can adopt a premium pricing strategy, particularly when scarcity (limited editions) is built in.
In recent years there has been an explosion in deferred payment services, with some brands even offering 0% credit terms (often through third party providers such as Klarna and PayPal). This works well for big ticket items such as technology, cars, and white goods.
There are many price comparison sites to factor into your price point selection – in the age of the internet it has never been easier for consumers to compare your prices to those of your competitors. Distributors and physical outlets sometimes offer a “Price Promise”, often refunding the difference if a consumer discovers the same product available elsewhere at a more favorable price. In practice, of course, few consumers take advantage of this offer, but it helps build consumer confidence and reduces “shopping around”.
3. Promotion: Messaging in the marketplace
There have never been more distribution channels to get your message out. As well as conventional advertising (which now includes PR (public relations), social media, SEO, and digital marketing), other options include events and media sponsorship, content marketing, direct selling via email, SMS and cold calling, and influencer marketing.
PR is also a form of marketing, ensuring that trade papers and consumer review sites write about your products. Promotion is about more than the creative content of a campaign — it’s ideally about choosing the perfect fit between product, message and medium.
4. Place: Your route to market
Distribution and fulfillment are key. Place has two main components — shopping location and delivery medium. On the one hand, it’s how and where your customers find your product (either by explicitly searching from it, or by encountering it incidentally). But it is also about how the product is delivered (bought in-store, downloaded, delivered to your door).
Car showrooms, market stalls, ecommerce sites, Buy Now links on Instagram — all of these are examples of the “places” your customers might encounter your product.
Secure downloads, BOPIS (buy online, pickup in-store) and same day delivery are all methods of fulfillment you may consider, depending on the nature of your product and what customers want and expect.
For digital products, “delivery” might also include how the product is made available. Can it be downloaded onto multiple devices? Does it require registration? Are patches and upgrades automatically enabled on installation?
5. People: The personnel involved in the sale
The individual personalities and persuasiveness of sales personnel are not to be understated. However, in 2022 “people” isn’t just about sales staff, but also those promoting the product to your target audience through sponsorships and cross-promotion.
Brand ambassadors have become an enormous industry, worth over $16 billion in 2022, according to Influencer Marketing Hub. Unboxings, hauls, podcast sponsorship, event sponsorship, and other activities leverage popular online personalities and celebrities to sell key products.
B2B sales isn’t immune to this either, with LinkedIn becoming a fantastic route for finding industry influencers to help sell your product. Incentives including referral fees are often provided in exchange for this service.
In classic brick and mortar sales, presentation and attitude are everything — having a polite, well-informed, and subtly persuasive manner, without being overbearing. The same applies to remote sales, particularly in B2B, where big ticket items are sold by sales people, to their target market, who come across as trustworthy and knowledgeable.
Examples of the 5 Ps of marketing
Now that we’re considered the importance of all five components of the marketing mix, let’s look at some examples of how each element can be optimized for a marketing plan for a brick-and-mortar sale, an ecommerce purchase, and a B2B transaction.
Example 1: Smartphone
Product: There’s a lot of brand loyalty built into smartphone purchases, so a few innovations and improvements may well sell the next iteration of an iPhone or Samsung phone. There’s also a lot of competition, of course, so selling convenience, advanced technology and flexibility can go a long way to converting vacillating consumers.
Price: Smartphone purchases suffer or benefit (depending on consumer attitude) from the sometimes-bewildering complexity of phone contract pricing strategies. The advertised price of the handset may be set in stone, but the ancillary pricing strategies can be intricate. The good news is that there’s something for everyone.
Those that want to buy the handset in full will benefit from significantly reduced subscription fees. Others who don’t have the cashflow to pay $1500 upfront benefit from credit strategies where they get the handset straight away and pay it off over 18 or 24-month contracts at higher rates.
Promotion: The manufacturers’ landing pages are digital showroom for their products, but major global advertising campaigns including product placement, sponsorship, and physical advertising (posters and billboards) are also used alongside digital banners, pop-ups and social media ads. When there’s a new iPhone out, you’ll know about it!
Place: While some smartphones are bought direct from the brand, either online or in the iStore or equivalent, many more are sold through third-party providers who bundle in phone contracts, entertainment subscriptions, warranties, cases, screen protectors and other key features to add value and reassure the buyers of this high-ticket item.
In 2022 an increasing number of smartphones are bought online, without any human interaction at all. In 2021 around 50% of all US smartphone purchases were made online, according to YouGov research.
People: Given the above trend towards ecommerce, accelerated by the COVID-19 pandemic and resultant store closures and public lockdowns, it may seem odd to focus upon personnel. However, since half of all sales are still made in-store, it’s vital that third-party sales reps are well-informed and that own brand store staff present themselves as informative and impartial experts, helping consumers negotiate a tricky purchase.
Example 2: Package vacation
Product: The product in this case is a customer experience. It’s a somewhat intangible quality which can be suggested through glossy images, video, testimonials, and beautifully crafted copy. The product is also the convenience of purchasing travel and accommodation (and sometimes entertainment) at once. Opportunities to get creative and imaginative are many.
Price: Price is vital in vacation marketing since there are potentially infinite competing experiences for buyers to choose between. Consumers need to know they are getting a price that’s competitive for the region, the season, and the level of luxury they seek. Comparison sites are common, and well-positioned off-season deals can lure consumers.
Promotion: Poster advertising aimed at harried commuters is a popular option, as well as TV and cinema ads which “sell the sizzle”. A well-designed landing page is vital for any vacation promoter, and it’s just as important to check that partner providers such as airlines and hotels are operating at the top of their game too.
Place: Place is of course part of the product, which is unique in that the ultimate point of delivery is the experience. However, the importance of travel and booking sites should not be underestimated since this is where the dream of the perfect holiday takes shape. While travel agencies do still exist, so much travel booking occurs online that point of sale is best understood as online within holiday marketing.
People: Leisure travel is very much a people-orientated business, from the rep who sells you the package to the airline stewards who greet you at the plane or the concierge who welcomes you to the Grand Hotel. People can make a real difference to consumer word of mouth, online reviews and, of course, repeat business.
Example 3: Cloud-based productivity tool for SMBs
Product: The product can be explored in terms of features and benefits. Features are the practical functions of the software which optimize business, such as integrations and dashboards. Benefits are the experiential gains which take place because of its adoption — efficiency and time savings, better communication, more transparency, et cetera. It’s often best to lead with benefits, then move to concrete product features.
Price: As we’ve discussed, SaaS products, like AI marketing tools, usually sell in a range of subscription tiers ranging from freemium versions through to bespoke enterprise pricing. Reps are usually granted leeway within set parameters to offer discounts to valued clients.
Promotion: B2B promotional strategies include press releases, trade sites, LinkedIn and other social media marketing, cold calling, email outreach, landing pages, and blog content.
Place: Most B2B systems are sold online with some direct human intervention in the form of sales reps. However, increasingly deals can be finalized without physical meetings, via phone calls or Zoom conferencing. Links from aggregator review sites such as G2, Marketer Milk, and Capterra can be very helpful in driving potential buyers to landing pages.
People: A proactive, well-informed, and personable sales team is hard to beat when enterprise sales are in the offing. This might include a rep, a sales manager and additional support for demoing the product. Support and customer service staff are key to reducing churn and renewing those all-important monthly or annual subscriptions.
The five Ps: Useful shorthand for the perfect marketing campaign
The 5 P’s of marketing aren’t set in stone in modern marketing efforts, and some models add two more components — process and physical evidence — to extend their usefulness. However, in their simplest, five-variable format, these aspects of a marketing campaign help focus the mind on what’s important — making the best possible pitch to those likeliest to buy.
For that reason, the 5 Ps remain a perennial guide for would-be marketers launching new products into an increasingly competitive marketplace.
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