The marketing mix is a specific marketing tactic of how to approach the targeted segment . The element called “4P” is mainly called the marketing mix. 4P is an acronym for Product, Price, Place, and Promotion, and combining (mixing) these four in a discretionary manner while maintaining consistency.
- What is 4P?
- Reasons for STP before 4P
- Points to make good use of 4P
- What is 4C in the marketing mix?
- Relationship between 4P and 4C from the perspective of marketing strategy
- Marketing mix example
- It is important for the marketing mix to match the STP strategy
What is 4P?
4P is the four elements of marketing to reach out to your target customers.
Neil Bowden proposed the marketing mix around 1950, and Jerome McCarthy proposed “4P” in 1960.
The first “P”, “product,” means product strategy .
It means a product strategy that considers brand development and new brand construction, such as “what kind of products and services to provide” and “what kind of customers to target”. To do this, we start by clarifying the features and concepts of the product.
In this process, we analyze everything from product manufacturing to product manufacturing, concrete packaging proposals, concept establishment, customer warranty and support, and content, and if there are any missing parts, we design the product through trial and error. I will continue to execute.
The second “P” means “price” and is priced for goods and services .
We will set an appropriate price that can secure profits by checking whether the price is appropriate for consumers and the trends of competitors. Pricing is a factor that is directly linked to management because it is related to profits. Therefore, pricing strategies are a very important strategy.
To set the price, you can set the price by adding profit to the cost such as manufacturing and labor costs, setting from the products of competitors, and adding the value of plus alpha to the products and services to differentiate. There are various methods such as doing.
It is also important to adjust the price to a level that consumers can understand by reducing the price depending on the situation.
In addition, it is important not only to set prices in pricing strategies, but also to maintain prices without compromising brand power or competitiveness with competitors.
The third “P” means “distribution” and is sometimes referred to as “ channel strategy “.
Analyze whether your target customers can deliver the products and services they need, when and where they need it.
“Place” is not limited to where to provide products and services, but we also pursue “whether it is convenient for customers” and “whether it is easy to buy”.
Without a distribution channel to the market, we cannot deliver products and services to our customers.
Therefore, it is important to build a distribution channel in order to improve customer convenience. It is important to optimize the distribution channel by selecting sales methods and sales areas such as direct sales and sales under agency contracts.
The fourth and final “P” is “promotion”, which is a strategy for advertising and publicity.
Promotions are aimed at raising awareness of products and services, stimulating demand and leading to purchases .
Specifically, promotion includes not only advertising and publicity through various media such as SNS and paper media, but also event holding, POP posting at stores, direct mail sending, and personal sales that are sold directly by sales. increase. In recent years, promotion methods via the Internet, such as content marketing, may be used.
It is easy to think that corporate promotion is only one-sided advertising / promotion from the company side, but in the promotion strategy, “communication” between both the company and the consumer is important.
There are many companies that set up call centers to communicate with consumers because they change consumers’ purchasing motivation through communication and lead to purchasing.
Reasons for STP before 4P
The reason for doing STP before 4P is that 4P will change if the target and positioning are different. Take a pregnancy test as an example. There are two possible targets for pregnancy tests: “people who want children” and “people who don’t want children”.
If the target is someone who wants a child, positioning is “easy and definitely diagnosing.”
On the other hand, if you’re targeting someone who doesn’t want a child, positioning is “immediately knowing you’re not pregnant and reassuring.” Then, 4P will change depending on which one you target.
If the target is a person who wants a child, the actions of “a bright package with a baby’s face etc.” and “put it in a prominent place in a pharmacy” can be considered. If you can make a reliable diagnosis, a slightly higher price will be fine.
On the other hand, if the target is people who do not want children, it will be a “plain package design” and “a place where the pharmacy is inconspicuous”. If there are many young people, it seems better to keep the price setting low.
Points to make good use of 4P
Utilization of 4P is indispensable for realizing a marketing strategy that adopts the marketing mix. Next, I will explain the points to make good use of 4P.
The key to developing a marketing mix is to make “customer information” as specific and clear as possible. The effect of the marketing mix is high by making assumptions such as “age, gender, occupation, family structure, lifestyle / hobbies and tastes” and “who has the purchasing authority”. Become.
Is 4P consistent?
It is also important to confirm that 4P is consistent in order to realize the marketing strategy. Even assuming that we aim for low profit and high sales, we cannot maximize sales without securing a distribution network. If 4P is inconsistent, it will be easier to find consistency if the customer checks while assuming a story such as “who to buy, why and why to buy”.
Is the balance of 4P in place?
If the 4P is out of balance, the customer may feel uneasy and the customer may leave. Based on the results of STP marketing, such as “Is the set price appropriate for this product?” “Is this promotion optimal when considering product distribution?” It is important to formulate.
Is 4P capable of producing synergistic effects?
By setting the balance of 4P well, you can also create a synergistic effect (synergy). As an example, by skillfully “promoting” products that are limited to “regions” for a limited sales period, the premier feeling of the products will be enhanced, and even if the “price” is slightly higher than the market price, the customer will be satisfied. You are more likely to buy the item. It is important to thoroughly consider whether the 4Ps that have been formulated can produce synergistic effects.
What is 4C in the marketing mix?
“4P” in the marketing mix already explained is a method that is performed from the perspective of the company that implements the strategy.
On the other hand, “4C” captures 4P from the customer’s point of view.
As marketing theory evolved, there was a trend to review “4P” from the consumer’s perspective rather than the corporate perspective. That is the framework called “4C”.
In other words, “4C” and “4P” are a pair, and if you formulate a marketing strategy from the perspective of both the company side and the customer side by combining both, you can produce better results.
“Customer Value” is an element that is paired with “Product” in 4P, and is not limited to the value of the product or service itself, but “What value is found and the customer purchases it.” “What kind of benefits do you get after purchasing?”
It is necessary to reproduce the needs that make customers want, and to provide products and services that meet the satisfaction and needs obtained by purchasing.
The “Customer Cost” that is paired with the “Price” of 4P is the cost and time required for the movement required for the purchase in addition to the cost for purchasing the product or service itself. Applies to “cost”.
Not only the purchase time itself, but also the consideration time until the purchase is included in the “cost”.
In other words, not only the cost required for the purchase but also the time taken to purchase is considered as part of the cost.
Based on these, we will consider how much the price is reasonable to pay for the cost of purchasing the product and using the service, and whether it is easy to use.
“Convenience” is for 4P “Place”, and is an element related to customer convenience at the time of purchase, such as “how to make it easier for customers to obtain products and services”.
No matter how attractive and good a product or service is, it is difficult to sell if it is difficult to obtain.
It is important to implement easy-to-obtain distribution channels and sales methods while considering the convenience of customers when purchasing. In that sense, it is an element that should be considered together with the 4P “Place”.
“Communication”, which is paired with “Promotion” on 4P, means communication with customers.
As I explained in the Promotion part, marketing requires not only one-sided advertising and information provision, but also communication with customers such as support and after-sales service.
In addition to one-way promotion, it is necessary to set up a call center and support desk to carry out communication including receiving inquiries and complaints from customers.
Relationship between 4P and 4C from the perspective of marketing strategy
4P and 4C have a close relationship between each element, so it is important to fully understand them when developing a marketing strategy.
Product and Customer Value
Product and customer value are inextricably linked. The reason is that no matter how much a company publicizes “this is a great product”, it will not lead to product differentiation unless the customer feels the value and benefits.
Price and cost paid by the customer (Cost)
The price paid by the customer includes not only financial aspects but also factors such as effort and time. As an example of the relationship, even if the product is cheap, if the customer needs to assemble the product over time after purchase, it is a heavy burden on the customer side. You may not be able to get sales results.
Distribution (Place) and Convenience
Distribution is closely related to convenience. A home delivery service that allows you to receive products while you are at home is a good example of the relationship between the two, and there is data that customers are interested in something that feels more convenient.
Promotion and Communication with Customers
In addition to unilaterally communicating the attractiveness of products and services from companies to customers through advertising, you can expect higher sales effects by communicating with customers. As an example, if the customer’s voice after using the product is reflected in the promotion, the customer may feel closer to the product and be more motivated to purchase it.
Marketing mix example
Starbucks has become a global coffee chain since it opened its first store in Washington, USA in 1971. Since entering Japan in 1995, we have continued to increase the number of fans as we expand our stores. At Starbucks, we define our business as a place where customers can spend their time freely, such as talking with friends and thinking, rather than “selling coffee”, defining “. We call it “Third Place ” (a third place, neither at home nor at work). Because of the value of such products, even if a cup of coffee is more expensive than the average at the 300 yen level and there is almost no advertising, customers who sympathize with it through PR and word of mouth are using Starbucks.
|Product||Make “third place” customer value instead of coffee|
|Price||A cup of coffee in the $2.9 range|
|Promotion||No advertising, only publicity, word of mouth, and store signs|
|Distribution (Place)||Mainly directly managed stores in the center of big cities|
Established in 2006, Lifenet Life Insurance Company, which became a hot topic in Japan as “the first independent life insurance company after the war,” is an insurance company specializing in Internet sales. In the insurance industry, where face-to-face sales were common, we appealed for “ low prices ” because there is no need for labor costs or store costs. It is supported by the child-rearing generation in their 20s and 30s by disclosing all the breakdown of insurance premiums, which tended to give the impression of being unclear. We have realized “ ease of consultation ” for customer targets, such as developing promotions mainly on the Internet such as search engines and social media, and accepting consultations at call centers until 10 pm. bottom.
|Product||Life insurance for the child-rearing generation in their 20s and 30s|
|Price||Clear and cheap rates such as death protection from $5 and medical coverage from $10.|
|Promotion||Advertisements and word-of-mouth on the Internet such as search engines and SNS|
|Distribution (Place)||Limited to internet sales|
Japan’s freee Co., Ltd. (founded in 2012) released the fully automatic cloud accounting software “freee” in 2013. Targeting “small businesses” such as small and medium-sized enterprises, start-ups, and sole proprietors, we aim to create accounting software that is easy to handle even for users who do not have accounting expertise. It features functions that automate tasks that humans have traditionally performed, such as cooperation with credit cards and banks, receipt scan registration, and automatic journalizing AI. While the mainstream of conventional accounting software is to purchase a package at a store and install it on a PC, freee is developing services in the cloud. By completing the payment from the contract on the Internet and using it without installation, we are quick to meet the needs of high-level net literacy. Initially, by developing digital-centric advertisements, the number of users increased, saying that “the number of contracts exceeded 60,000 one year after the release.” Unlike conventional purchase-only software, it uses a subscription method, and because monthly payments are cheap, it is an accounting software that is also used by small businesses.
|Product||Cloud accounting software with convenient functions (automation, etc.) specialized for small and middle businesses|
|Price||Subscription type monthly fee about $18 ~|
|Promotion||Initially focused on digital marketing|
|Distribution (Place)||Internet from contract to payment|
“Raksul” is a printing sharing platform operated by RAKSUL Inc. (established in 2009) in Japan. In partnership with printing companies nationwide, we have adopted a unique business model of printing using the non-operating hours of the printing press, and we are executing cheap and fast online printing. In the category of “net printing”, while the largest companies were overwhelmingly recognized at the beginning of the business, by developing large-scale mass advertising using TV commercials, until then, the net We also reached a customer base that did not use printing. We expanded sales to meet various needs such as small and medium-sized enterprises that ordered from local “printers”, stores that used to print with copiers and home printers, and individuals. Since the average customer unit price of RAKSUL is 10,000 yen, it is assumed that small lot printing is the mainstream of sales.
|Product||A cheap and fast online printing service that uses the non-operating time of the printing press|
|Price||Flyer / Flyer 1 cent ~|
|Promotion||Adopt mass advertisements such as TV commercials|
|Distribution (Place)||Order from a PC / smartphone and deliver by home delivery|
It is important for the marketing mix to match the STP strategy
Before the marketing mix, “ STP Marketing ” is used to formulate strategies.
STP consists of “segmentation” that subdivides the market, “targeting” that determines the target market from the subdivided segments, and “positioning” that declares the benefits and differentiation of the determined target from the competition. It is a framework that is composed. Perform these three processes to develop a basic marketing strategy.
Implementing an STP strategy determines the basic direction of “what”, “who” and “how” to provide products and services.
In the marketing mix, if there is an error with the content of the STP marketing, the marketing effect will be diminished, such as the customer’s needs are not met, the price is too high and it is difficult to handle, and the product information and attractiveness are not conveyed to the customer. increase.
In addition to the alignment of the marketing mix with the STP strategy, the consistency of the 4P content also contributes to the effectiveness of the marketing method.
For this reason as well, it is important that the marketing mix is consistent with the STP strategy.