How to Leverage the 4 Ps of Marketing to Accelerate Growth

Initially developed by E. Jerome Mccarthy and published in his book Basic Marketing: A Managerial Approach (1960), the “4 Ps of Marketing” has become an essential framework for developing effective marketing strategies that drive sustainable revenue growth.

The 4 Ps stand for product, placement, price, and promotion. Many business owners and marketing professionals focus primarily on promotion, leaving product, placement and pricing strategy siloed in other parts of the business and not part of their overall marketing strategy. Those focusing on all 4 Ps of Marketing are in a stronger position to achieve their revenue and other growth goals faster and more cost-effectively.

Product

As the first “P,” product refers to what is sold and includes physical products, software and even services.

Products offering the most value are those that solve problems and create new opportunities. The best target markets – often referred to as the ideal client/customer profile (ICP) – are those most likely to see value in a product and be willing to pay what is needed to be profitable.

The difference between clients and customers is that a professional relationship is formed with clients over time and transactions are conducted with customers without forming a relationship – even experienced businesspeople often mix these up.

Product roadmaps capture future versions of a product that will solve more problems and have more value for current or future target markets. Product managers are responsible for listening to the “voice of the customer” in terms of both end-user and channel partner requirements and work with engineers and developers to fulfill as many of those requirements as time and money allows. Whatever can’t be fulfilled in one version of a product may be fulfilled in future versions, leading to the development of the product roadmap.

Placement

This is the marketing “P” that is most often forgotten. It refers to how products are “placed” with customers – i.e. the go-to-market strategy and whether a product is sold directly to customers or sold through channels.

Many businesses sell through channel partners that already have relationships within a target market. Access to these markets through channel partners is possible when they are allowed to purchase the product at a discount from what customers have to pay so channel partners can mark it up and make a profit. Channel partners selling new technology solutions (software and hardware) typically want to make a 30-40% margin, while they may only expect a 10-20% margin for older, commoditized products.

Service providers typically sell directly to customers because services don’t need to be stocked or installed like physical products and software do, respectively. However, there are exceptions like construction general contractors (GCs) utilizing sub-contractors – the sub is essentially selling their services to a developer or building/property owner through the GC.

Pricing

Determining how much to sell a product for and the price for when it is sold direct vs. through channel partners is the crux of any pricing strategy.

Listening to the voice of the customer in the form of market research will result in an understanding of how much they may value a product and what they’re willing to pay for it. Knowing cost of goods sold (COGS) is also essential so that products are priced high enough so that each sale is profitable.

It’s also important to understand how profitable ownership or executive leadership wants a given product to be, which becomes the profitability target. If prospects aren’t willing to pay what is needed to hit profitability targets, then additional ways to add value need to be found or it could be back to the drawing board.

Promotion

This marketing “P” is what most people think marketing is, but it refers specifically to how products and their value are communicated to prospects, including both prospective customers and channel partners.

There are two main types of promotional marketing: inbound and outbound. Inbound marketing is how to get the attention of prospects that are actively searching for a given product. Inbound marketing is also referred to as “demand capture” because it focuses on capturing existing demand, which starts with website content that is leveraged with search engine optimization (SEO).

For any given solution, there are always far more people not searching for it at any given time than those who are. That is where outbound marketing or “demand generation” comes in. When people aren’t searching, it’s important to generate demand by bringing marketing messages to them. This is often achieved via campaigns – email, ads, public relations, and being a guest on shows (podcasts, radio, TV) – as well as through events, which can be in-person (e.g. tradeshows and industry association meetings) or virtual (e.g. webinars).

Promotional marketing includes a wide variety of communication mediums from print to digital. Print includes advertising, direct mail, catalogs, promotional merchandise (i.e. tchotchkes handed out at events), and any other form of promotion printed on a physical medium.

Digital marketing is any form of promotion that only exists on a screen and includes your website, third-party websites, social media, email campaigns, and advertising on search engines, a.k.a. pay-per-click (PPC) ads – e.g. Google Ads, Linkedin Campaigns, and Microsoft Ads.

Effective promotional marketing should generate a tangible ROI, which requires a deep understanding of the target market’s problems and what they value, then communicating that in a way that will resonate with them.

The “Fifth P”

When the product, placement, pricing and promotion components of a marketing strategy are effective, the most important or “Fifth P: Profit” will be generated.

Profit is the lifeblood of any business. While sales and revenue generation tend to be easier to measure and understand, the growth of profitability is what determines success or failure. Many get excited when their revenues are growing significantly but, if profitability growth doesn’t follow suit, it can be a big problem.

Technology startups in particular will operate at a deficit for many years, hoping they will be profitable someday but those that don’t become profitable fast enough for their investors are those that don’t make it.

Growing a B2B business requires a marketing strategy that is carefully aligned with the needs of prospects. This can be much easier when partnering with a B2B digital marketing agency that offers proven B2B digital, content marketing, and SEO services.