[MUSIC PLAYING]

SPEAKER: A new look at the four Ps of marketing. 

Nothing explains a complicated business algorithm like a cute mnemonic device. Hence, the four Ps of marketing. This is one of the first things they drill into your head in business school-- actually, in any type of formal marketing instruction. It's everywhere. Everyone knows it, and you need to know it, too. So here it is. Let's go. 

Four Ps-- Product, Place, Price, Promotion. Got that? Let's say it again. Say it out loud. It helps. Product, price, place, promotion. One more time, with feeling. Product, place, price, promotion. Never forget these four words. 

Each of the four Ps represents one of the really, really important elements of marketing that you need to consider when developing your campaigns. Alone, none of them will do you much good. The four Ps need to work together. They're like the four wheels of a car or the four legs of a table. If you've got trouble with, or heaven forbid are missing one entirely, you'll have trouble getting anywhere. So it's easy, right? Find a good product, slap a good price on it, sell it somewhere people go, and throw together some promotion. 

Yes? No. Because first you have to figure out how to define these things as good. It's all about fit. Each of the four Ps has to be geared towards your specific target market and work with each of the other four Ps to do so. 

The first P is product. This is what you're selling-- be it a pot scrubber, e-book, or car detailing service. But it's not just the item or service itself that's included in the product P. It's also the different varieties of your product, the quality of it, how it's designed, packaged, and branded. Anything that adds value to your product, any reason a customer might want to purchase it, is part of the product. Obviously, it's pretty important. 

The next P is price. You may be tempted to believe that the price of your product or service is merely the amount you charge customers when they purchase it. Dispel that notion immediately. The price includes the retail price, any discounts or special offers, bonuses, payment plans, and credit terms-- in short, anything even remotely related to money. It makes sense when you think about it. A discount lowers the price of an item. A bonus offer also lowers the price. Credit terms and payment plans make it easier for your customers to pay the price. All of these must be considered. 

The third P is promotion. This is what most people think of when they think of marketing. Promotion includes advertising, personal selling, sales promotion, and public relations. Sponsoring your nephew's little league game? That's promotion. Making a sales call? That's promotion. Handing out brochures? That's promotion. Answering client emails? Still promotion. 

The final P is place. Place is also known as distribution. How do your clients find your product and get what they've paid for once they've paid for it? Is it delivered to their door? Is it right there in a retail location? Do they download it? Place also includes the logistics of each of these things. If your product is sold in retail stores, how did it get there? How many of them are there? How soon do you need to get more there? Everything that you need to consider about how to get your product to your customer or to a place where your customer can find it is part of place. 

Now remember, it's not enough to choose a good product, price, place, and promotion, because we have to know how to define good. Let's use an example to illustrate. Let's say that your seven-year-old wants to set up a lemonade stand to make some extra money. What will she have to figure out? She'll need to decide where to place her stand, how to make the lemonade, what she should charge for it, and how to let people know what she's doing. If she came up to you and asked you how to do all of this, you'd have to tell her that it depends. 

Where she sets up her stand depends on who she wants to sell the lemonade to-- grownups or kids. Should the stand be in the park or at the end of her driveway? Same with the recipe. How much sugar should she add? More for kids than for grownups, probably. If she makes grown up lemonade, she might be able to charge more for it because adults have more money to spend. On the other hand, if she sets up her stand in the park and sells sweet lemonade to kids, more of them will see it, and she won't have to tell people about it. 

You have to know who your target market is before you make any of the four P decisions, or you'll be in the same mess as a seven-year-old-- not knowing which course of action is best for any of the Ps. If the seven-year-old knew from the get go that she wanted to sell lemonade to other kids, she would have been able to decide right away that she should have a sweet lemonade-- product-- that she should sell in the park-- place, promotion-- for $0.10 a cup-- price. 

If she wanted to sell to grownups, she would have her stand at the end of her driveway, where lots of adults walk to and from work-- place. The lemonade would be tart-- product. Her mom would probably tell some of her neighbors about it-- promotion. And she could charge $0.25 a cup-- price. 

At the end of the day, it comes down to figuring out your target market and what works for them. Your offering will be perfect for some people, and those are the ones you need to reach. 

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