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I was introduced to E. Jerome McCarthy’s four P’s later in my career. I wish I had known them earlier. There is no more perfect summation of marketing. Each of the P’s is a lever at your disposal. As a startup founder or CEO, understanding the four P’s will help you know which of the four levers to pull to beat your competition. — TM
What is marketing? Ask one hundred marketers, and you are likely to get one hundred different answers. Consult the dictionary, and you find stolid definitions like the following: “The commercial functions involved in transferring goods from producer to consumer.” But, what does that really mean? And what exactly would a head of marketing be in charge of?
In his 1960 book Basic Marketing. A Managerial Approach, E. Jerome McCarthy, a marketing professor at Michigan State University, created a simplified model and mnemonic for the key elements of marketing. His model is known as the Four Ps: product, price, place, and promotion. McCarthy’s model was a simplification of earlier work on the key marketing ingredients, or “marketing mix,” by Neil Borden from Harvard Business School.
Let’s take a closer look at McCarthy’s Four Ps.
Product – Refers to the actual goods or services, and how they relate to the end-user’s needs and wants. The scope of a product also includes supporting elements such as warranties, guarantees, and customer service.
Price – Refers to the process of setting a price for a product, including discounts. Although most often price is described in terms of currency, it doesn’t have to be. What is exchanged for the product or services can be time, energy, or even attention.
Place – Indicates how the product gets to the customer; for example, point-of-sale placement and retailing. Also known as Distribution, place can refer to the channel by which a product or service is sold (e.g., online vs. retail), the geographic region, (e.g., Western Europe) or industry (e.g., Financial Services), and the target market segment (e.g., young adults, families, business people).
Promotion – Refers to the various strategies for promoting the product, brand, or company, including advertising, sales promotion, publicity, personal selling, and branding.
In practice, the Four Ps should be thought of as four levers. To grow a business or to fix a faltering business, you need to employ one or more of the Four Ps. Moving those levers up or down as needed will have a direct impact on the business.
McCarthy’s Four Ps are perhaps the most important concept a marketer can master. You will be hard pressed to find a more concise and durable definition of marketing. The Four Ps will serve you well when you need to determine whether you are working on the right things.
Startup essentials is a series of excerpts from The Professional Marketer. I’ve pulled out what I think are the most essential skills a founder or a marketer at a startup would need.