Framework library · Marketing strategy

4Ps of marketing

The marketing mix breaks an offer into the decisions a business controls: what it sells, what it charges, where and how customers buy it, and how they hear about it. The decisions only work together: a premium product sold through a discount channel with a price-led message fails, however sound each choice looks on its own. A service adds three more decisions, about people, process and physical evidence.

LevelFoundational
TimeAn hour to draft for one offer, and longer if price and channel need testing
Who to involveThe product or marketing owner, with sales, finance for the price, and whoever runs the channels.
Also calledmarketing mix, four Ps, 7Ps, services marketing mix, product, price, place, promotion

Use it when

  • You are launching an offer and need the product, price, channel and message decided together rather than by four separate teams.
  • An offer is selling below plan and you want to find which of the four decisions is out of line with the others.
  • You are adapting an existing offer for a new segment or country and need to see what has to change.
  • The service depends on installers, support staff or field teams, and the people, process and physical evidence need the same attention as the price.

Avoid it when

  • You have not chosen the customer yet. Segment and target first with STP, or the mix will be designed for an average customer who does not exist.
  • The question is whether the offer meets a real need. Use a value proposition canvas or jobs to be done. The mix assumes the need is there.
  • You need to compare the economics of options. The mix records choices. Test their arithmetic with unit economics or break-even analysis.

How to run it

  1. Name the customer and the offer

    Write the target segment and the offer in one line at the top. Every box is a choice for that customer, not for the market as a whole.

  2. Define the product as the customer receives it

    Include the service around it: installation, support, contract length and what happens when it fails. For a connectivity service, this is most of the product.

  3. Set the price from value and the alternative

    Start from what the customer pays for the alternative and what the offer saves or earns them, then check it covers cost. Write the realised price after discounts, not the list price.

  4. Choose where and how customers buy

    Channels, partners, coverage and the steps from interest to installation. Count the cost of each channel per sale.

  5. Decide how customers will hear about it

    Message, media and sales effort, matched to how this customer actually chooses. One clear reason to buy beats a list of features.

  6. Add people, process and physical evidence for a service

    Who the customer deals with, how the service is delivered, and what they can see or hold that shows it is working.

  7. Check the boxes against each other

    Read across: check that the price fits the channel and that the message matches the product. Most failures are inconsistencies, not bad single decisions.

Work through it

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Mistakes to avoid

  • Filling in each P separately, often in different teams, so that the price says premium and the channel says discount.
  • Treating promotion as the whole of marketing. Most of the decisions that win or lose a customer are in product, price and place.
  • Leaving out the service elements of a connectivity product. Installation, support and billing are part of what the customer buys.
  • Writing aspirations ("competitive pricing") instead of decisions ("$79 a month, no contract"). A box nobody can act on has not been decided.

Where it comes from

E. Jerome McCarthy grouped the marketing mix into product, price, place and promotion in Basic Marketing: A Managerial Approach (Irwin, 1960). The term "marketing mix" is Neil H. Borden's, used in his 1953 presidential address to the American Marketing Association and set out in "The Concept of the Marketing Mix", Journal of Advertising Research, 1964. Booms and Bitner added people, process and physical evidence for services in Donnelly and George (eds), Marketing of Services (American Marketing Association, 1981). Source.

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