The “Four Ps”- Product, Place, Price and Promotion, make up what is known as the Marketing Mix. The marketing mix also includes how each element is used within a marketing strategy.
In this article you will learn the ins and outs of each element of the marketing mix and how they contribute to successful marketing campaigns. We will look at the well-known computer software company Microsoft to illustrate the impact the marketing mix can have on marketing tactics and strategy.
Product
Of the Four Ps, Product is usually the easiest to identify. The Product is what your business is selling. An apple cart would have apples as its Product; a car dealership would have automobiles as its Product, a consulting company would have consulting services as its Product. In the case of Microsoft, the Product is computer software.
There are many categories and components within Microsoft‘s software Product, however, each sub-product is designed for use in conjunction with all the others, so in a way, Microsoft offers one large Product that can be purchased together or separately on an as-needed basis. The challenge for Microsoft is to convince the customer that all parts of the Product are desirable and even necessary in order to reap the full benefits of the software. A perusal of Microsoft‘s website will show that one of the ways the company meets this challenge is to offer “product families” (Microsoft.com, 2007). This approach emphasizes the idea that Microsoft‘s products are meant to be used together by implying a familial relationship between the components- a concept that can be very appealing to the customer.
It has been said that Product is “much more than just the physical good that becomes the possession of the customer. It is everything about the purchase experience that a customer finds satisfying” (MOTI, 2005). This view of the first P can significantly affect a marketing campaign as the seller must not only determine the product’s appeal to the customer but also the appeal of how and why the customer will purchase the product.
Place
Place, or Placement, has to do with making the Product available to its target market. This includes everything from packaging and shipping to inventory management to deciding where and how the product should be sold. The advent of the Internet has lent a whole new area for Place consideration; online shopping currently accounts for a large percentage of retail purchases, not to mention sales of many products that are only available in a digital format.
Microsoft, as a manufacturer and seller of computer software, makes its products available online as well as in “old fashioned”, brick-and-mortar stores and shops. Microsoft products can be found virtually anywhere, not only in specialty computer stores but also in department stores, office supply outlets, and even in some convenience and grocery stores. Online, Microsoft products can be purchased in the same form that they are found in the stores, or downloaded in digital form for instant access. As Microsoft‘s target consumers are computer users, offering its product for sale via the computer is a “no-brainer”.
One ingenious strategy that Microsoft has employed regarding Place is to market directly to computer manufacturers. Through contracts with almost every computer company in the industry, Microsoft has ensured that its operating systems are already installed when a customer purchases a computer. From there, the customer has almost no choice but to continue to purchase Microsoft products for his or her computer, since Microsoft‘s software is all designed to work together. Of course, when the customer decides a new piece of software or an upgrade of a previously-owned piece of software is needed, he or she has many choices as to where to buy the desired product. Microsoft‘s answer to the question of Place seems to be “Everywhere!”
Saturating the market can be a key tactic in marketing strategy, but can backfire if supplies begin to outweigh demand. The seller who desires to flood the market would do well to also develop strategies to maintain a continual (or increasing) level of desire for the product in question.
Price
Price can be thought of as the “black sheep” of the Marketing Mix because it is the only element that actually produces revenues for the seller. Determining Price entails a shift from considering costs to considering profits; a price for the product must be chosen that offsets expenses and engenders profits but is not so high that customers will not be willing to pay.
Many factors influence Price, including production and distribution costs, going market values for the product, competitor pricing and choices regarding whether the product will be sold individually or in units. Depending on the product, a successful marketing strategy will offer both choices for purchasing. For example, Microsoft offers many of its software products as stand-alone items but also offers the same products bundled into software packages that cost less than each individual component would cost if purchased separately. In some cases, such as Microsoft’s former practice of including its Microsoft Office ™ suite with its Windows ™ operating systems, the company was actually giving away one of its products with the purchase of another of its products.
This “buy one, get one free” Price tactic is used in many successful marketing campaigns because the multiple sales generated usually far offset any losses that result from the product giveaways. For Microsoft, giving away Microsoft Office ™ with purchase of its operating systems seemed to be a willing sacrifice; the operating systems are the more expensive of the two products, plus Microsoft could look forward to increased revenues from performing technical support for both the Office software and the operating system software. Finally, bundling its software products helped Microsoft to realize its goal of selling the overall Product- i.e. all of the software it has to offer.
Promotion
The final P entails what may be the toughest task- making the Product known to the consumer. Further, the job of Promotion is to convince the consumer that the product in question is the best one for the job- whatever the job may be. Television and radio commercials, print ads, press releases and word-of-mouth are all forms of Promotion; all are geared to catch the attention of target customers and present information that entices those customers to purchase the advertised product.
When it comes to Promotion, Microsoft has a distinct advantage because it is the leader in the software industry. As they say, leadership has its privileges- these days, the most direct Promotion Microsoft has to undertake is when it produces a brand-new software product, and even then, Promotion is usually limited to announcing the availability and uses of the new product. Microsoft does not much need to convince its customers that its products are the best- the company’s reputation and ubiquitous presence in the market does that for them.
Another Promotional advantage enjoyed by Microsoft is that the company markets products that are seen as a necessity by those who own computers. This is of course due to the fact that Microsoft takes pains to ensure that its products are necessary by initially bypassing the average consumer and instead marketing directly to computer manufacturers, ensuring that if customers buy a computer, they will have to use Microsoft‘s products. By utilizing this strategy, Microsoft can concentrate its Promotion efforts on convincing people to buy computers rather than to buy individual software products. A computer on every desktop” (Bill Gates, 1994) is Microsoft’s company motto; a motto that seems rather strange for a company that does not actually make or sell computers. The indirect Promotion tactic of having its products already installed on computers purchased by consumers is what has led to Microsoft becoming a household name and the number one software dealer on the market today.
“The Marketing Mix is about how you use these four P’s. All four will be included in the marketing ‘story’ (advertising) but different emphasis may be placed on any of the P’s depending on the product and business as well as the industry in particular, how competitive the industry is and on what the competition is based. Applying the Marketing Mix aims to make you memorable to your customer, and give them a reason to buy your product or service, when they are ‘looking to buy'”(Mansell, 2004).
The Four Ps of the marketing mix are key ingredients of any successful marketing campaign, not only in their overall inclusion but in the way each is utilized within the campaign. The software company Microsoft depends heavily on proper use of the Marketing Mix in order to sell its wares. Place seems to be the P most heavily utilized by Microsoft, followed by Product, Price and Promotion. This combination of the Four Ps has led to great success for Microsoft; for your business, uses of the Marketing Mix may vary depending on many factors. It is up to the seller (that’s you) to critically examine the elements of the Marketing Mix and, in conjunction with other marketing tactics, determine the best methods for developing a successful marketing strategy.
References
Mansell, Joanne. 2003-2004. Marketing basics- the marketing mix and product lifecycle.
Kaisen Coaching. Retrieved November 27, 2005 from http://www.kaizencoaching.com.au/articles/basics_marketing_PLC.htm
Marketing On The Internet. 2005. http://iws.ohiolink.edu/moti/homedefinition.html
Microsoft. 2007. http://www.microsoft.com
Perreault, Jr., William D. and McCarthy, E. Jerome. 2005. Basic Marketing (15th ed.).
McGraw-Hill/Irwin, New York, NY
