4P in Marketing is the core strategy in the modern marketing thinking of many businesses today. In which, focusing on customer value and needs is essential for any Marketing campaign to implement. The article below will explain in detail what 4P in Marketing is and the steps to build an effective 4P strategy.

1. What are the 4Ps in Marketing?

4P in Marketing is a model of a set of Marketing tools including 4 basic elements such as: Product, Price, Place, Promotion. This term was officially conceptualized by E. Jerome McCarthy in 1960, to solve the following problems:

• Understand customer needs and wants.
• Find out why your current product/service is failing.
• Solve problems and adjust users' perceptions of products/services
• Increase competitive advantage
• Understand the interaction process of the product with the consumer and vice versa

2. Components that make up the 4P model in Marketing

The 4P model in Marketing is created by 4 main factors, these factors do not work individually but interact with each other. Below are the factors that make up the 4P model in Marketing:

2.1 Product - Product

Product is what a business offers to attract consumers to buy and use the product/service. The goal of Product is to satisfy customer needs and make a profit. Products are usually goods, services, locations, events, information, ideas, etc. Products are divided into 2 main types:

• Consumer product (Consumer product):

Product categories include: Essential products (food, daily necessities, beverages), choice products (clothing, electronics, furniture), specialty products (luxury cars, designer items, electronics, furniture) and non-desirable products (insurance, funeral services, blood donations).

• Industrial Product

Industrial products include: Machinery and equipment (CNC machines, 3D printers, industrial machines), raw materials and commodities (iron ore, cotton, wood, components, microprocessors) and industrial services (machinery maintenance, technical consulting, staff training, logistics).

In general, a Product will have its own life cycle consisting of 4 stages:

• Introduction: This is the stage when the product has just been launched and sales are not yet stable.
• Growth: The product is widely promoted, sales increase rapidly and competitors appear.
• Maturity: The stage when the product reaches a stable level, sales growth is slow or stable, and competition is fierce.
• Decline: The product is no longer popular, sales decrease due to changes in demand and other substitute products.

2.2 Price - Price

In the 4P model, price is one of the factors that directly affects consumers' purchasing decisions. To own a product/service, customers must pay a certain amount of money, and that cost will affect the quantity of products/services that the business sells. Specifically:

• Low pricing: Will make customers think the product is of poor quality and reduce profits.
• High price: Customers will buy less or buy in small quantities.

In particular, product prices must be consistent with brand image and product quality, determining high-end or low-end segments to implement effective marketing strategies. Some popular pricing strategies include:

• Market penetration pricing: Low price to attract customers.
• Skimming pricing: High price at launch and then gradually decreases.
• Premium pricing: Premium pricing focuses on the high-end customer segment.
• Competitor-based pricing: Price your product/service competitively against competitors.
• Cost-based pricing: Includes production costs and profits.
• Value-based pricing: Price reflects the value the product delivers to the customer.
• Psychological pricing: Offer odd numbers like 199,0000 VND instead of 200,0000 VND.
• Combo pricing: Selling products in bundles.
• Pricing by location: Prices will vary by location.

2.3 Place - Distribution

Distribution is the journey of a product to its target customers in an efficient manner. In addition, distribution is also a way for businesses to choose a location where customers can see and buy the product. Typically, there are two main forms of distribution: Direct and Indirect distribution.

• Direct distribution: Products are delivered directly to customers, through the business's website or store.
• Indirect distribution: Products are brought to customers through intermediary networks such as supermarkets, retail agents or distributors.

2.4 Promotion - Trade promotion

Promotion in 4P is promotional activities to seek opportunities to exchange, buy and sell goods and provide services to increase business sales, including: Advertising campaigns, promotions, product introductions, fairs, trade exhibitions...

In today's era, businesses can use many tactics to promote their products to potential customers such as:

• Advertise products on TV channels, radio, newspapers...
• Online advertising through social platforms, online advertising techniques…
• Participate in events and exhibitions.
• Direct marketing via phone, Email Marketing.

In general, Promotion is considered the guiding principle for businesses to increase sales and attract potential customers. However, product ideas still occupy the core position for businesses to identify target customers, the starting point of all strategies and the most important P. Choosing the right product will be the foundation for businesses to develop the remaining 3 Ps: Pricing, Promotion and Place. Therefore, when choosing a product, businesses need to carefully research some key aspects to come up with appropriate plans.

3. The importance of 4P strategy in Marketing

The 4P model in Marketing plays an important role in helping businesses implement effective product marketing strategies. Applying the 4P helps businesses achieve the following achievements:

• Create quality products

For the 4P Marketing Mix strategy to be effective, businesses need to carefully research the market, needs and desires of customers. Thereby, helping businesses create quality products, suitable for tastes and increase sales.

• Enhance brand value

The 4P strategy in Marketing helps to promote products and brands widely, maintain relationships and increase customer loyalty to the business. This strategy not only helps businesses enhance value and reputation, but also helps to improve business efficiency and competitive advantage for the brand.

• Building a healthy competitive environment

Competition is an indispensable factor in all business fields, especially in today's era. Therefore, businesses need to constantly innovate to improve the value provided to customers. The 4P strategy in Marketing will help businesses do this effectively.

• Create benefits for customers

Besides bringing many benefits to businesses, applying the 4P strategy in Marketing will help consumers receive many benefits from products/services, prices, convenient purchases and many other useful information.

4. Steps to build 4P in effective Marketing Mix for business

4P in Marketing is a strategy that helps businesses achieve their set business goals. To effectively apply the 4P method in Marketing Mix, businesses need to follow the following 6 steps:

4.1 Step 1: Identify product USP

USP (Unique Selling Point) is the unique selling point of a product/service, helping the brand stand out from its competitors. This is an important factor when developing the 4P strategy in the Marketing Mix. To determine the USP, businesses need to learn about the needs, interests and problems that customers are facing with the business's products/services. In addition, this is also the stage where businesses research and analyze competitors about what they are offering, as well as find out the weaknesses that businesses can exploit.

4.2 Step 2: Listen to customers

After determining the product USP, businesses need to understand customers through answers to the following questions:

• Who will buy the product?
• What problems do customers have that need to be solved?
• What product do they want? Describe in detail

In short, market research is a popular way for businesses to collect customer information effectively. Managers can refer to methods such as: Conducting surveys, interviews, analyzing data, collecting customer opinions via email, website, etc.

4.3 Step 3: Competitor analysis

The process of researching and analyzing competitors helps businesses determine their position compared to competitors, evaluate strengths and weaknesses, and find opportunities and threats from competitors. Through this, businesses will be able to develop competitive strategies to achieve business goals and offer the most suitable pricing strategy to their customers.

4.4 Step 4: Learn about distribution channels

Before looking for distribution channels, businesses need to answer the following questions:

• Where do potential customers tend to buy?
• Which shopping channels do they prefer to use?
• What information do customers want to be exposed to?

When choosing a distribution channel, businesses need to consider the channels that customers often use, then find ways to reach them effectively. Some popular communication channels include: Facebook, Youtube, Instagram... In addition, building a reputable website and optimizing search engines are also solutions to help businesses reach customers effectively. However, if the product/service is only developed to serve a specific market, focusing on a channel/geographical area will help businesses focus resources on the right target customers.

4.5 Step 5: Develop promotional strategies

After finding potential customers and creating a price for the product/service, the business needs to develop promotion strategies that are suitable for the goals and budget to convey messages about the product/service to customers. Thereby boosting sales and completing business goals.

4.6 Step 6: Check

For the 4P strategy in Marketing to be successful, businesses need to evaluate whether the factors of Product, Price, Place and Promotion match each other or not. Therefore, the Marketing team needs to spend a lot of time evaluating and measuring the combined effectiveness of the above factors on a regular basis. From there, businesses can determine whether the product meets the needs and desires of customers or not, whether the price is suitable for the value of the product/service, whether the distribution location is convenient for the target customers and whether the advertising strategy attracts customers or not.

5. Advantages and disadvantages of the 4P model in Marketing

The 4P model in Marketing is an important and useful tool for businesses when implementing marketing strategies. In addition to the benefits, the model still has many limitations. Let's learn about the advantages and disadvantages of 4P in Marketing with 1C Vietnam.

5.1 Advantages

The 4P strategy in Marketing has the following outstanding advantages:

• Facilitate customer interaction: Through customer feedback on social media platforms and brand posts shared by people, businesses will know what customers think about the brand and the marketing strategies being implemented.
• Easy Parameter Measurement: When implementing marketing strategies on communication channels, businesses can easily measure indicators that show the success of their brand promotion campaigns. In addition, effective parameter measurement support tools also help businesses know which channels achieve high results, thereby creating motivation to implement the next plans.
• Reaching the public: Currently, there are many tools that help businesses reach target customers easily. Among them, Google or Facebook advertising is the tool that many businesses apply to promote products to customers and promote the conversion rate of the business's products.

5.2 Disadvantages

Besides the above advantages, the 4P model in Marketing still has many limitations such as: causing inconvenience, being ignored by customers and fierce competition.

• Annoying: Customers will feel annoyed when being constantly tracked and receiving advertisements or suggestions. Especially inappropriate suggestions and appearing repeatedly will make customers uncomfortable.
• Being ignored by customers: Reaching target customers with marketing strategies is very easy to be ignored by customers. If the business is running ads on social platforms, customers will scroll down and ignore the ads.
• Fierce competition: The Marketing market is extremely fierce, so businesses need to constantly innovate strategies and attractive content to meet the needs of potential customers. In particular, strong financial resources are an important requirement to participate in this battle.

6. Some variations of the Marketing Mix model

The Marketing Mix model was originally called 4p and included elements such as: Product, Price, Place, Promotion. However, over time and the development of Marketing, this model has appeared in many different variations, demonstrating the complexity and diversity of Marketing strategies. Below are some common variations of the Marketing Mix model:

• 4C: This model includes elements such as: Customer Solution, Cost, Convenience and Communication. Instead of focusing on creating product quality, 4C always puts customers at the center of the Marketing strategy. This creates a more modern perspective, proposing solutions for customers, considering price, customer convenience and effective communication.
• 7P: The 7P model extends the 4Ps by adding 3 new elements: People, Process, and Physical Evidence. People focuses on the role of employees in providing services and supporting customers. Process focuses on the production and supply process. Meanwhile, physical evidence is related to all elements such as packaging and equipment.
• 8P: The 8P model adds the Packaging element to the list of 7Ps to emphasize the role of product packaging in attracting and reaching customers.
• 9P: The 9P model improves the 7P by adding 2 elements: Partners and Positioning. In which, Partners focuses on combining with external partners to bring value to customers. Positioning is how businesses position their brands in the market and in the minds of customers.

7. Some notes to successfully apply the 4P method in Marketing

In addition to understanding what the 4Ps in Marketing are and the steps to build the 4Ps, businesses need to pay attention to the following issues to ensure the model brings the highest efficiency.

7.1 Product strategy

• Understand the product

In the 4P model, businesses need to determine whether the product has just been launched or already exists on the market. If it is a new product, what unique features attract customers? If the product is already available, businesses need to show customers that the product is better or cheaper than what competitors are offering. Therefore, businesses need to clearly understand the advantages of the brand's products compared to other products on the market and how the product will help work and life.

• Branding

The brand of a business will be determined through factors such as characteristics, design, color and taste of the product. Therefore, businesses need to build a brand that clearly shows the individual personality of each product. There are many ways to name a product, each naming method will have its own advantages and disadvantages that businesses need to calculate to avoid risks to the brand and product. Currently, many businesses choose to name by combining the brand with the individual name of each product. For example: Samsung Group launched product lines with the names Samsung A5, Samsung Note 5, Samsung S6, etc.

7.2 Pricing strategy

• Build the right pricing strategy:
  • Pricing based on product features and market: The price must be consistent with the value of the product, the better the quality and design of the product, the higher the price. If the price of the product is too low, customers will think that the product is of poor quality and its features are not outstanding compared to competitors. On the contrary, if the price of the product is too high, customers will buy less, reducing the competitiveness and development of the product.
  • Segment pricing: If the product is for high-end customers, the product is of high quality or limited edition, the price will be higher than the general market level. If the product is about technology, the business should price according to the skimming strategy, focusing on outstanding features, investing in image, advertising and increasing the price. If the product is aimed at mid-range customers, the business will price the product to suit their budget. Or products with long life cycles such as watches and metals need to increase quantity quickly, competitive prices to help businesses get familiar with the brand, then start raising prices.

• Set up product pricing strategy

Product pricing strategies can be applied when a business launches a new product. There are two forms of building a pricing strategy:

Build a promotional package: Additional products will be given away when purchasing the main product. For example: Customers who buy a tube of toothpaste will receive a free toothbrush.

Build discounts and product discounts: Applied when customers buy in large quantities, pay immediately, the total value of the order is over a certain amount of money... Then the business will reduce the price and discount a percentage on the total value of the order.

• Reasonable location

When implementing the 4P strategy in Marketing, businesses cannot ignore choosing suitable business locations, should choose distribution channels suitable for products/services or combine many forms of distribution to ensure products reach customers. In addition, businesses can display products at their business premises to build trust with customers, have their own website so that customers can buy genuine products with many preferential policies.

7.3 Marketing Strategy

Marketing strategies need to be consistent with the product and the business's costs to achieve widespread effects. Below are some popular marketing strategies that have been and are being applied by many businesses:

• Advertising on television, newspapers, radio.
• Social media advertising and online advertising techniques.
• Distribute flyers at supermarkets, shopping malls, fairs.
• Organize events, press conferences or exhibitions to introduce new customers.
• Direct marketing by phone, email or mail.

8. Case Study of 4P Strategy in Marketing of Coca Cola Brand

Coca Cola is a soft drink brand that was launched in 1886 and quickly became a brand chosen by many customers, almost leading the market compared to competitors. So, how did Coca Cola build a solid reputation? Join 1C Vietnam to learn about the strategies that Coca Cola has used in the section below:

• Product

Coca Cola brand has built its brand with the main product Coca-Cola Classic. This drink has gradually become widespread and familiar to all customers around the world. To meet the diverse needs of customers, Coca-Cola constantly updates and innovates products in its business strategies.

• Price

Coca-Cola applies a flexible and diversified pricing strategy to meet the needs of different customer segments and markets. For example, discount and promotion campaigns during the summer or holidays to increase demand and stimulate consumers' desire to buy.

• Place (Distribution)

Coca-Cola has a large distribution network around the world. Therefore, its products can be found in every store, supermarket, restaurant and bar around the world. In addition, Coca-Cola has built close relationships with retailers and distribution partners to ensure that products reach customers conveniently and easily.

• Promotion

Finally, Coca-Cola has implemented unique and impressive promotional campaigns using multiple media such as television, radio, social media and special events. In addition, Coca-Cola has also built a positive image through sponsorship of important sporting and cultural events such as the World Cup, Olympic Games, major concerts, etc.

9. Support for successful and effective application of the 4P model with the 1C:ERP solution

After applying the above 4P strategies in Marketing, businesses can choose to apply the 1C:ERP solution in parallel with the customer management subsystem (CRM & Marketing) to approach potential customers and effectively take care of that customer source. Below are some outstanding features that this solution brings to businesses:

• Optimize operational processes: 1C:ERP solution helps businesses manage their operations, eliminate duplicate work and manual operations, and optimize processes during software application.
• Long-term customer and partner management: CRM in 1C:ERP provides powerful tools and utilities to help businesses attract and retain potential customers.
• Real-time reporting system: Managers can easily create reports on demand, are ready to collaborate with companies and departments, and can change reporting options without knowing programming.
• Improve product/service quality: Quickly checking inventory levels, shipping policies and recording customer feedback will help businesses optimize services, ensuring product/service quality when reaching customers.
• Security commitment: Data encryption and strict authorization help businesses easily manage information and ensure transparency of information and user operation history.
• Improve investment efficiency: 1C:ERP solution helps businesses optimize operating costs and control KPIs, including Marketing KPIs. At the same time, the software is compatible with most necessary software, has the same user interface on browser and winform, will help businesses optimize investment value for their digital transformation journey.

Above are the shares about 4P in Marketing and the steps to build a 4P strategy that any business is interested in. It can be seen that learning about the 4P strategy in Marketing helps businesses seize opportunities, take advantage of market factors to build a sustainable brand. For more detailed advice on the 1C:ERP solution with CRM & Marketing subsystem to help businesses maintain relationships with customers and deploy successful Marketing campaigns, please contact the hotline: 0247.108.8887, the 1C Vietnam support team will respond promptly!