Marketing is all about serving people what they need, exploring different marketing channels, and mastering each craft so the product can never go wrong. Today's article is not fully about email marketing; at least, not entirely. Today's article is about how to present and develop a product or service that is too good to fail. Let's learn about the 7 Ps of marketing.
The 7 Ps of marketing are Product, Price, Place, Promotion, People, Process, and Physical Evidence. But what do they really mean? We'll go through all of them.
First, let's clarify: What is the marketing mix?
In 1960, E. Jerome McCarthy introduced the marketing mix as a collection of tools that businesses can use to cater to the needs and desires of their target groups. This concept allows companies to craft a marketing strategy by selecting from various elements. However, naming these elements and segmenting them effectively is crucial. Using marketing mix strategies, marketing departments and professionals have developed structured marketing plans.
Originally, McCarthy proposed the 4 Ps of Marketing: product, price, place, and promotion. As competition and economic conditions evolved, marketing experts expanded these strategies to include seven elements.
The 7 Ps of Marketing Mix outline the essential components of a strategic marketing plan. By following each step, businesses can build their own effective marketing strategies. These 7 Ps are: product, price, place, promotion, people, process, and physical evidence. In this article, we’ll break down each element and examine their impact with real-world marketing examples.
Understanding the 7Ps of Marketing
Whether you're an online start-up, a small business, or an established corporation, understanding the basics of marketing is essential. Fortunately, today’s world offers an abundance of resources, both physical and online, to help you craft your strategic plan. Here, we’ll introduce the marketing mix, widely regarded as one of the most effective strategies.
The concept began in the 1960s with Jerome McCarthy’s book Basic Marketing: A Managerial Approach, which introduced the core components of marketing strategy by answering the question, what are the four Ps of marketing? These four Ps—product, place, promotion, and price—formed the foundation.
Over time, with advancements in the marketing field, increased competition, and the rise of digital platforms, three more elements were added: people, process, and physical evidence. Let’s walk through each one together.
The 7Ps of Marketing
Product
No matter the service you offer, customers are always focused on what they’re paying for and how it benefits them, either directly or indirectly—this is the product. A product doesn’t have to be a tangible item; anything that fulfills a customer’s needs and reflects your brand identity is considered a product.
Defining and designing your products or services thoughtfully is crucial to convey your values, priorities, and ethical standards. In this way, your product becomes how customers experience your brand. By understanding its elements, you can best showcase your business.
The three key components of a product are the core, actual, and expected product. Your service may fit into one or more of these categories, and identifying which one is critical for creating effective marketing strategies.
Core Product is the fundamental reason a customer desires a product, often driven by essential needs like space, enjoyment, food, or storage—needs that are values-based. This is the level at which a potential customer is exploring the market.
Actual Product is the tangible or digital service available for purchase, whether in a store, online, or as software. This can also include services like economic or psychological consulting, considered actual products due to their direct value.
Expected Product encompasses the features a customer anticipates and desires from the product. Meeting these expectations is key to building long-lasting customer relationships.
For example, Apple Inc.’s iconic iPhone illustrates these product levels. Apple first identified a core need among customers for a larger touch screen and built on this core concept. With the actual product—the iPhone—they launched a recognizable, market-leading product line. Through their design approach, they established a unique and recognizable brand identity for the iPhone.
Price
Pricing is a complex topic to navigate. Since price is a key factor for customers, defining it carefully is crucial. Price represents the exchange value of a product or service and reflects how much it can be purchased for in the market. As a result, how you communicate price can shape perceptions of your brand and product.
Several factors can influence a product or service’s price, including:
Demand: The demand for a product among potential customers significantly affects its price. Higher demand often allows for a higher price point. However, it's essential to analyze data to ensure demand remains steady. If demand is only temporary, it may be wise to adjust pricing accordingly.
Cost and Supplies: Production costs, including raw materials, play a vital role in determining a product’s price. Prices may vary depending on the cost of these materials. Additionally, the labor required to transform materials into the final product must be factored into the overall cost.
Competition: As discussed, competition fuels the market. When multiple businesses offer similar products, they often adjust prices in response to competitors. Companies frequently set prices by evaluating those of their competitors.
A well-known example is Starbucks’ pricing strategy within the marketing mix. When Starbucks entered the market, there were cheaper options available, like Dunkin’ Donuts. By positioning itself with higher prices, Starbucks conveyed an image of premium quality. Over time, customers began associating Starbucks with gourmet coffee, and being a “Starbucks drinker” became linked to a work-oriented, refined lifestyle.
Place
In the actual purchasing process, deciding where to sell your product is a crucial consideration. You’ll need to address questions such as:
- Will your product be sold in physical locations?
- Where can customers find it?
- Will you set up an online store for local or global sales?
- Are you planning to sell through your own business channels?
- Will you use resellers, distributors, or other third parties to manage customer service?
- Are you interested in B2B2C or B2C2B models, selling products through other channels?
For example, Amazon’s distribution system allows sellers to reach a vast audience and expand globally. This enables even small businesses to sell their products and services through e-commerce, displaying items to a wider customer base and accessing international markets through a robust distribution network.
Promotion
Promotion is the final element in what are the four Ps of marketing, and it’s the part of the marketing mix most commonly associated with classic marketing. This encompasses various strategies, such as email marketing, social media campaigns, display ads, digital marketing communications, and search engine marketing. By integrating these promotional channels, businesses can build a seamless, omnichannel experience for their customer base.
Tactics like PR, direct marketing, and sales promotions contribute to broader marketing efforts. Through marketing automation, businesses can streamline product promotion across social media or traditional marketing channels.
A prime example of effective global promotion is Coca-Cola. Though they didn’t invent cola soda, their marketing efforts have made their brand iconic. The Coca-Cola bottle, recognizable by its unique silhouette, became widely familiar due to strong print media campaigns in the 1950s. With mascots like the polar bears and the association of red and white with Christmas, Coca-Cola’s advertising successfully established a lasting brand identity.
People
"People" is a newer addition beyond the original 4 Ps of marketing, focusing on anyone who interacts with customers before, during, or after the sale. This includes roles like customer service representatives, sales teams, marketing staff, brand identity designers, and even packaging designers. Prioritizing skilled, communicative people in these roles is crucial for ensuring a positive customer experience.
Here are some tips for selecting team members who will engage with customers:
- They should have strong communication and empathy skills.
- Reinforce the importance of the brand’s identity, as they are representing it.
- For direct customer interactions, hiring experienced professionals is essential.
A prime example of the "people" component in action is Ritz-Carlton’s approach to exceptional customer service. As a hotel brand, they place a strong emphasis on making each guest’s stay memorable. With personalized touches, such as greeting guests by name and delivering high levels of service, Ritz-Carlton aims to earn customer loyalty by first building trust. Their motto reflects this approach: to gain a customer’s loyalty, you must first earn their trust. This commitment to going above and beyond sets them apart in customer care.
Process
Considering the entire customer journey is crucial for building loyalty and encouraging repeat business. By designing each stage of the process, you can ensure customers leave with a positive experience. This includes every step, from a customer’s decision to purchase, to shipping and logistics.
Key factors to address include third-party retailers, staff satisfaction, website reliability, and delivery scheduling. By managing these elements, you can respond to issues as they arise, maintaining a smooth and dependable customer experience.
A strong example of process optimization is McDonald's standardized food preparation system. Through years of perfecting fast-food service, McDonald’s has streamlined each step, from preparation to tray assembly. By assigning specific stations for each item in the meal, they have set a standard for efficiency in the fast-food industry, creating a model that others strive to replicate.
Physical Evidence
When customers view your website or browse the store aisle, one thing captures their attention above all: the first impression. The design of your packaging, product, or service presentation creates the “physical evidence” for customers, setting the tone for their experience. Here are some tips to make the most of your packaging design:
- Highlight Your Brand Identity: Packaging design offers a chance to showcase your brand's identity, including its colors and patterns. Use this space to communicate your product’s qualities and reinforce brand recognition.
- Leverage Color Psychology: Color has a powerful impact on perception. For example, a healthy meal prep kit can benefit from greens and blues, which convey wellness and freshness, while a red or orange car design can suggest speed and energy. Choosing colors thoughtfully can subtly influence customer perception.
- Add Value with Promotional Items: Including promotional elements like coupons or gift cards can increase excitement and encourage repeat purchases. Small incentives within the packaging can drive customers to return.
Starbucks provides a strong example of physical evidence by designing an inviting environment that encourages customers to stay, study, or work. By offering a welcoming space for electronic use and reading, Starbucks has cultivated a brand experience that aligns with a “studying” or “working” lifestyle, making their cafes more than just a quick stop for coffee.
7Ps of Marketing Examples from Big Companies
Nothing illustrates the effectiveness of the 7 Ps of marketing better than real-world examples. Here’s a look at how successful companies exemplify these principles:
1. Apple Inc.:
Product: Apple Inc.'s product launches are highly anticipated each year, showcasing innovative designs and features that captivate tech enthusiasts.
Price: The company employs a premium pricing strategy to maintain its high-end image, while also offering educational discounts to attract younger customers.
Place: Apple is selective in its distribution strategy, selling products through meticulously designed Apple Stores and a limited number of authorized premium retailers.
Promotion: Significant investment in advertising uses compelling messaging that emphasizes security, professionalism, and value.
People: Apple prioritizes customer experience, ensuring frontline staff are knowledgeable and can offer tailored product recommendations.
Process: The customer journey, from need assessment to in-store experience, is carefully crafted to ensure a welcoming atmosphere and readiness to assist.
Physical Evidence: Apple’s minimalist store design focuses solely on products, and the unboxing experience is meticulously designed to guide customers through the process.
2. McDonald's:
Product: McDonald’s offers a standardized menu but also incorporates local favorites to attract tourists and cater to regional tastes.
Price: Competitive pricing varies by location, balancing value and service quality to remain appealing in the fast-food market.
Place: McDonald's employs diverse distribution strategies worldwide; for example, the UK emphasizes takeout and delivery services, while US customers favor drive-thrus.
Promotion: The brand exemplifies an omnichannel marketing strategy, utilizing various platforms for advertising and outreach.
People: Staff members are trained for quick service and effective communication, aiming to expedite order taking and problem resolution.
Process: The ordering system is designed for minimal effort from customers, ensuring a quick and efficient experience.
Physical Evidence: McDonald's iconic logo and standardized menus make it instantly recognizable, bolstered by memorable mascots and branding elements.
3. Amazon:
Product: Originally focused on books, Amazon now offers a vast array of products, categorized and displayed to enhance customer experience. Services like Amazon Prime and Prime Gaming add value globally.
Price: Competitive pricing strategies, including gift cards and special offers, make customers feel valued, especially with Amazon Prime.
Place: As the largest online retailer, Amazon serves customers in over 100 countries, enabling sellers to reach a global audience.
Promotion: Amazon's recommendation algorithm tailors suggestions based on individual customer interests, enhancing engagement and upselling.
People: The company invests in its workforce, providing training through online courses, workshops, and seminars to ensure motivated, skilled employees.
Process: Efficient logistics and a user-friendly website streamline the customer journey, making it easy to find and purchase products.
Physical Evidence: Amazon's immersive shopping experience features a fast, user-friendly website with visually engaging product displays, enhancing customer satisfaction.
The History and Evolution of the Marketing Mix
From the 4Ps to the 7Ps
With the advent of printing technology and advancements in marketing tools, various marketing strategies began to emerge. In the 1960s, E. Jerome McCarthy introduced the concept of the marketing mix, defining it with four foundational elements: product, price, place, and promotion.
Over the years, other marketing professionals and academics have expanded on this model. In 1981, Bernard Booms and Mary Bitner contributed to the framework by adding "people," resulting in the 5 Ps of marketing. Later, the addition of "process" further emphasized the importance of service delivery and the human aspect of marketing. Ultimately, the model was completed with the inclusion of "physical evidence," leading to the 7 Ps of marketing that we recognize today. In today's service-oriented economies, these 7 Ps serve as a valuable framework for targeting specific customer groups.
Importance of the 7Ps in Modern Marketing
Adapting to Market Changes: Segmenting your marketing strategy is crucial for simplifying processes. Utilizing the 7 Ps within your marketing approach enables you to quickly adapt to shifts in the market. This framework allows you to monitor market changes more efficiently and adjust your marketing tactics in response to the competitive landscape.
Delivering Value: A key component of delivering value lies in ensuring that your product or service is of high quality. Quality—whether in the service, product, or overall experience—is vital in contemporary marketing. By consistently providing high-quality offerings, you can deliver value to your customers, fostering trust and cultivating long-term relationships.
How the Marketing Mix Elements Affect Each Other
One of the key advantages of the 7 Ps of marketing is their interconnectedness; none of these elements operate in isolation. This raises the question: how do the components of the marketing mix interact with one another?
| Element | How it influences ‘Product’ | How it influences ‘Price’ | How it influences ‘Place’ | How it influences ‘Promotion’ |
|---|---|---|---|---|
| Product | If the product is expensive to produce, the price will have to be higher | If the product has to be tried on, it may be most successful if sold from a shop | A new product may need more promotion than a mature product | |
| Price | If price needs to be low, the quality of the product may be affected | It would not be advisable to sell expensive products through discount retailers | Expensive products may be best suited to being promoted with a free gift | |
| Place | A product sold in luxury outlets needs to be high quality | A product that is sold cheaply may be sold in discount shops | A product that is only sold online may need a different approach from one sold in shops, e.g., more information about the product | |
| Promotion | A buy-one-get-one-free offer would not be suitable for an expensive product | Promotions can be used to reduce the cost of products that have a high price | A promotion campaign that used national media would require the product to be available nationally |
The 4 Ps and 7 Ps of marketing are mutually reinforcing, with each element influencing the others in various ways. For example, altering the price of a product can impact how customers perceive its value. Similarly, changes in promotion strategies can affect demand, which in turn may necessitate adjustments to your distribution methods. Consequently, your marketing strategy can lead to shifts in sales performance across different platforms, illustrating how promotion influences place within the marketing mix.
Effectiveness of Each Element of the 7Ps
We’ve explored the intricacies of the marketing mix, so let’s examine how the various elements interact with one another. Research on the effectiveness of each component of the 7 Ps reveals valuable insights, supported by statistical evidence that highlights the significance of each element.
Effectiveness of Each Element:
Price: Price emerges as the most critical factor for consumers when making a purchase. Research indicates that over 290 out of 400 respondents rank price as their top consideration, underscoring its substantial influence in buying decisions.
Product: The product itself is crucial, as consumers typically prefer items they recognize. Familiarity with a brand enhances customer loyalty; studies show that nearly 45% of respondents favor purchasing products from brands they know and trust.
Promotion: Various forms of marketing—whether digital, print, or audio—play a significant role in reaching audiences that may not engage with products directly. Investment in promotional activities is essential, as research indicates that over 260 out of 400 respondents are swayed by marketing efforts.
Place: The shopping environment, including store aesthetics or website usability, significantly impacts customer decisions. More than 70% of respondents indicate that they are more likely to shop in visually appealing environments, highlighting the importance of a well-designed customer experience.
People and Process: Customers prioritize businesses that excel in customer care and service quality. Approximately 300 out of 400 respondents emphasize that attentive service and efficient processes are key contributors to their overall satisfaction.
Overall, the interplay between these elements demonstrates how interconnected they are, each influencing customer perceptions and behavior in meaningful ways.
How to Apply the 7Ps Effectively
Analyze Your Current Marketing Mix:
When considering the elements of your business, including product, pricing, place, promotion, people, and physical evidence, how can you classify them? By identifying the 7 Ps of marketing and applying them to your business plan, you can assess each aspect in relation to your own operations.
Understand Your Target Market:
After defining the marketing mix relevant to your business, you can connect it to your target market. It is crucial to analyze both your competition and target audience to meet customer needs and preferences. Conducting local and global research will enable you to grasp your target market better and adapt your strategies accordingly.
Develop Strategies for Each Element:
Once you comprehend how the marketing mix elements interact, you can create targeted strategies for each component. This approach allows you to establish clear objectives and formulate your marketing strategy. Additionally, you can develop action plans for these strategies to ensure they yield beneficial results in your efforts.
Monitor and Adjust:
Utilizing metrics from your marketing plan is vital. This enables you to identify which campaigns have been most effective and which may require improvements. You can evaluate effectiveness and gather feedback from your customers regarding their journey with your brand.
Conclusion
Marketing strategies involve numerous criteria and factors. Identifying and working with these elements can significantly strengthen your business. The 7 Ps of the marketing mix is a fundamental strategy that traces its roots back to the 1960s. By leveraging these seven critical components of successful marketing—product, pricing, place, promotion, people, process, and physical evidence—you can enhance your business's effectiveness.
We encourage you to utilize the 7 Ps of marketing examples provided and conduct your own analysis. You can establish your own categories and apply them effectively to refine your marketing strategy.
We would like to extend our gratitude to Riddhisha Jain from Nirma University and Sanjeev N. Jain from Sanjeevan Engineering and Technology Institute for their insightful work, "Analyzing and Exploring the Effectiveness of Each Element of 7Ps of Marketing Mix" (January 2022). Their research and analysis have served as a valuable source of inspiration and guidance in shaping our article on the 7Ps of Marketing.
Thank you for your contributions to advancing the understanding of marketing strategies and frameworks. Your dedication to this field has greatly enriched our work.
7Ps of Marketing: Marketing Mix FAQs
Which of the following is not one of the three elements of a marketing mix?
The three main elements are Product, Price, and Promotion. Anything outside these, like People or Process, may not be part of the traditional marketing mix.
Which marketing mix element deals specifically with retailing and marketing channel management?
Place deals with retailing and marketing channel management.
What are the components of the product mix?
The product mix includes product lines, product length, product width, product depth, and product consistency.
How do the marketing-mix elements affect each other?
The elements are interdependent; changes in one (e.g., price) can impact others (e.g., perceived value, demand, or promotion strategy).