Jerome McCarthy introduced the term "4 P's" many years ago to describe a brand's marketing mix. All marketing textbooks use this terminology to refer to product, price, place and promotion. But in a study of marketing textbooks, it was found that there is no common order to the way they are listed or treated as tactical marketing decisions. Indeed, the idea that they are tactical and not strategic also is not generally discussed.
The first "P" can be considered to be product or product strategy. But this is nothing more than positioning, which itself includes virtually all aspects of how a product is designed to be perceived by a consumer. Since positioning is strategic in the sense of determining where a brand should be in the minds of consumers vis á vis competition, once the positioning decision is made, there are just tactical marketing mix variables to set. This, then, is the "3 P's." And there is only one logical order for the 3 P's and that is price, then place, then promotion.
As a restatement of a brand's positioning strategy, a brand's core benefit proposition suggests what pricing strategy it should use. If it's offering more "benefit," then a price skimming strategy (relative to its closest competitor) makes sense; if it's offering more "value," then a price penetration strategy would be most appropriate.
From the product strategy, i.e., the core benefit proposition, and the pricing strategy, a brand can deduce its distribution strategy. Since a brand's business model is influenced by price and place, a price skimming strategy generally implies selective distribution and a price penetration strategy generally implies intensive distribution. Yet many companies mix this up and try to make a profit selling a few low margin items.
Finally, promotion comes last. Advertising agencies won't like this, but it's the truth. Promotion is communicating the product, price and place strategies to the target market. That's all. Too many companies look to advertising and promotion to rescue a brand in trouble when the problem lies in the core benefit proposition. Both push and pull promotion strategies can be used to communicate the core benefit proposition, but with advertising (a pull strategy) it seems easier to forget what promotion is for.
If advertising doesn't reflect a brand's core benefit proposition, then it may be amusing or interesting, but it's useless as a driver of sales. "Enjoy the Ride" and "Life Tastes Good" have nothing to do with the evaluative dimensions that consumers use to choose among brands of cars or soda. Nissan and Coca-Cola learned that the hard way.
Even the best marketing plan (the positioning or product strategy as represented by a brand's core benefit proposition plus the 3 P strategies) will have reduced effectiveness if it can simply be copied by competitors. What is needed is some way to deal with that.
Source: Principles of Marketing.
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