What Are The 5 Ps of Marketing & Why Do They Matter?

What are the 5 P’s of marketing, and how can your business use them? Our guest writer explains it all.

As a marketer, brand, or product owner, you need to distinguish yourself from the competition if you want to grow your business. 

Developing a strong marketing strategy is essential to staying ahead of the competition. The goal of these strategies is to bring great products to your customers at the right place, time, and price. Doing this will help you position your business strategically so that consumers continually perceive you as the perfect fit for them.

But for these strategies to be successful, you need to consider the 5 Ps framework.

What are the 5 Ps of Marketing?

The 5 Ps of marketing refers to:

  • Product
  • Price
  • Place
  • Promotion
  • People 

The marketing mix was popularized in the 1960s by marketing professor E. Jerome McCarthy.

The 5 Ps are the key marketing elements you need to focus on to ensure your product is strategically placed in the market. Through the 5 Ps, you can have clarity about your product offer, your niche, and most importantly, the customer, who is the focal point of your business. 

When you complement the 5 Ps framework with tools, you can further ensure the success of your marketing strategies. 

For instance, if you use a sprint planning template for the fifth P (people), you can assign project tasks and goals and follow up on deliverables. This ensures marketing efficiency and collaboration. When you use social media analytics for the fourth P (promotion), you can tweak your marketing strategies according to data and ensure successful social media promotion.

With that in mind, let’s dive into the 5 Ps of marketing.

1. Product

A product is any good or service that satisfies a certain customer need. Before you create any product, you should think about your target audience. What potential customer problems are you trying to solve? Is this a new niche, or do the existing products or solutions in the market not work? 

By understanding customers’ needs, you can adapt your product strategy. This will allow you to make key decisions that affect your product, such as functionality, branding, service, packaging, warranty, and pricing. The product’s unique selling proposition should be clear from the get-go.

Freshsales, a sales CRM, is an example of a brand that has mastered the art of the product. 

Freshsales has adopted an effective SaaS marketing approach. It focuses on a specific target market, i.e., small businesses. Its unique selling point is effective. It is an affordable product that eliminates the typical complexities of a sales CRM. This makes it ideal for startups and growing businesses.

Mejuri is another example of a small business that provides a great product offer.

In the case of Mejuri’s products, you get products that are defined for luxury (let’s say, a gold earring) at a fraction of the price point. The 2.5 micron 14KT and 18KT handcrafted pieces start from $25, going all the way to $4000 for diamond-studded pieces. 

Mejuri makes its value proposition clear: It has something for everyone. Mejuri has mastered both the product and its pricing, which we dive into in the next section. 

2. Price

Next on the 5 Ps of the marketing list is price.

Pricing depends on production and marketing costs. This could include any extra costs (such as shipping) plus the desired profit margin. Pricing should also include factors such as discounts, credit terms, payment arrangements, etc. 

Pricing depends on your market positioning. You should thus consider your product in the wider context of your competitors. Positioning refers to how customers view your product. How do they distinguish it from your competitors and product alternatives?

So, how do you come up with a solid pricing strategy?

Determine your business goals. Is it to increase profitability, cash flow, or customer acquisitions? Is it to gain a larger market share or beat the competition? 

Analyze your target market to know their needs. How can you solve these problems for them, and what are they willing to pay for your product?

Analyze the competition. Have any pricing strategies been adopted by your competitors? These could include discounts and money-back guarantees. You can use Porter’s Five Forces framework to analyze the competitive landscape. See the infographic below.

Source

Finally, create a pricing strategy based on the feedback you get from the questions above. Some pricing models include promotional pricing, penetration pricing, and competitive pricing. Digital products such as progress tracking systems and CRMs offer a lot more price flexibility. Examples of this are the subscription and freemium models. 

In the case of Freshsales, the SaaS uses an initial freemium model where customers pay nothing for using the app with a limited number of features. Customers can then upgrade to higher product tiers with increased pricing. This pricing is competitive based on Freshsales marketing itself as a budget CRM. 

3. Place

The P that stands for place in the marketing mix gives due consideration to various factors. These include product distribution channels, logistics, market coverage, and geographical reach.

Customers can encounter your product incidentally or through an initiated search. Products are no longer geographically limited. They can be drop-shipped from eCommerce platforms in less than 24 hours.

Services can be delivered via an online or desktop application such as a CRM. Examples include hotel booking and air ticketing services.

When considering a place, you need to look at your audience and external factors, too. 

Grocery retailer Ahold Delhaize, for instance, noted people’s difficulty when purchasing basic goods during the pandemic. So it introduced 270 new “click-and-collect” locations to complement its brick-and-mortar stores. Instead of waiting in long lines to pay in brick-and-mortar stores, customers could now pay online and then just pick up their groceries in-store and leave. 

The model was so successful that the retailer saw an almost two times increase in net consumer online sales growth in the 2020-2022 period. In 2021, in particular, the retailer posted a 68.9% increase in online sales compared to the 2020 figure. 

If customers aren’t satisfied with product accessibility, they’ll jump to the next alternative. Make it easy for customers to see your product and buy it.

4. Promotion

Promotion encompasses your brand messaging and the ways you promote your product or service to your target market. 

Promotional methods may include direct marketing, public relations, media ads, blogs, community forums, social media, and sponsorships.

B2B and SaaS businesses adopt unique promotion measures that are mostly digital. These include landing pages, paid ads, and banner ads on social media. Email outreach, newsletters, and cold calling are also examples of this. 

Determining the most effective promotional method should start by establishing a buyer persona. When you know your customer and the journey they take before they make a purchase, you can craft promotional strategies that yield results.

Source

A great example of a brand using tried-and-tested promo tactics is Hubspot. Hubspot has perfected the “content funnel.” It provides the right content at the right time to prospects. 

For example, Hubspot offers leads at the top of the content funnel (awareness stage) blog posts, infographics, YouTube videos, and landing page content. As the prospect moves down the funnel, Hubspot provides conversion content such as case studies, demo videos, and eBooks. This is done all the way to the purchase and advocacy stages. 

Hubspot has developed an acute sense of what its prospects want at every stage of its customer journey. This is why its marketing strategies work so well.

5. People

The last P in the 5 P marketing mix is people. Sadly, this P is overlooked many times. People refer to your customers, staff, and salespeople. They may also include people outside your staff who promote your products to customers, influencers, and PR managers. 

The customer is the basis of any marketing campaign. Customers have certain demographic and psychographic characteristics that influence the marketing mix. These include their habits, desires, fears, income, and where they live.

Customers are the focal point of all your business operations. However, salespeople and customer success teams anchor the service that you provide to your target customers. Without them, your business won’t be able to understand or act on customer needs and pain points as they arise. 

Ultimately, a successful marketing strategy entails you taking into account people–their behaviors, fears, and other psychosocial factors–in everything you do.

There are specific tools you can use to do this. For customers, in particular, there are tools such as Salesforce that give you a 360-degree view of their interactions with your business. The tools can help you craft strategies that ensure customer satisfaction. It’s no wonder companies that use tools such as Salesforce see a 35% increase in overall customer satisfaction. 

Summary

The 5 Ps of marketing or the marketing mix should be at the center of any strategic business framework. 

“Product” considers the quality, packaging, functionality, and appearance of a product/service. “Price” elements include costs, selling price, and competitor analysis. “Promotion” refers to advertising (both traditional and digital), PR activities, and brand messaging.

“Place” includes distribution channels, location, and market coverage. “People” refer to your customers, staff, and partners. These could include salespeople, marketers, and even partners such as influencers.

A keen understanding of the marketing mix can help you craft marketing strategies that will help you position your product strategically in the market. This is essential if you want to increase sales.

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