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Sample 4Ps Marketing Essay
Managing 4 Ps in Marketing
Introduction
At the core of every successful organisation lies an effectively managed set of
controllable variables deployed to meet the impact of uncontrollable variables in the business
environment. A company’s controllable variables are the marketing mix elements of Product,
Price, Place and Promotions. Management of these four elements needs to be carried out with
a deep insight in to the business environment and the demands made by the uncontrollable
variables. A company’s uncontrollable variables include its internal environment,
microenvironment and macro environment. Impact from uncontrollable variables such as
Political, Economic, Social and Technological factors as well as Customers, Competitors,
Suppliers, Publics and the company’s internal environment needs to be managed so that the
opportunities are capitalised upon while countering any adverse effects. Managing the
controllable variables in a company involves the managing of the marketing process.
Marketing process involves identifying the consumer needs, selecting the need segments,
which the company aims to cater to, and focusing on the selected segments with a well
formulated marketing mix.
Overview of Controllable Variables
A company’s controllable variables include the elements of its marketing mix. These
are termed as the 4 Ps, representing Product, Price, Place and Promotion aspects of the
marketing process. Each company uses these elements in different combinations to come up
with the most effective marketing mix which will utilise the internal resources to the
optimum level in capitalizing upon the business opportunities offered by the business
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environment (Armstrong & Kotler 2000). These controllable factors are also used in
lessening or countering the adverse effects resulting from the environmental factors, which
are largely beyond the company’s span of control. It is important that companies consider
factors such as internal resource levels, its core competencies and the company’s overall
vision and objectives when planning out the controllable variables in its marketing process
(Thomson & Strickland 2004). Companies differ in their manner of controlling the marketing
mix and the importance placed upon each controllable variable will depend upon the market
situation, targeted segments, the product positioning strategies and the overall business
objectives (Wisner 1996).
Product Element
The product element is the most crucial element of the marketing mix and needs to be
offered with the required level of quality and with an ability to satisfy the need it is catering
to. Broadly defined, the products include “physical objects, services, persons, places,
organisations, ideas or a mix of these entities” (Armstrong & Kotler 2000). A product is not
merely a tangible object but a mix of elements. There are three levels, which form the overall
product, which includes the core product, actual product and augmented product. The core
product is the actual key benefits and problem solving offered by the product. The next level
of product is designed around this core product. The actual product, which is the second level
of the product, includes quality, features, design, brand name and packaging. The third level,
which is the augmented product, aims at offering additional services and benefits to add value
to the product. This perspective of product element indicates the variety of choice the
companies have in forming the product offer.
Price Element
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Price can be defined as the “sum of values, which a consumer exchanges for the
benefits derived from a product or service” (Armstrong & Kotler 2000). This is one of the
most flexible elements in the marketing mix as it can be changed quickly and largely
controlled by the company. But many companies fail in their pricing decisions due to reasons
such as not revising prices often enough to reflect market changes, pricing being too cost
oriented, pricing not being compatible with the rest of the marketing mix and not having
prices to suit different market segments. Pricing decisions of a company is affected and
influenced by a host of internal and external factors. The company’s marketing objectives,
marketing strategy, cost structure as well as other organisational considerations will affect the
pricing decisions at an internal level. External factors such as the market conditions,
competition as well as other environmental factors such as status of economy, number of
resellers involved in the distribution chain and the government price controls will also affect
the pricing decisions of a company.
Place element
Organisations use intermediaries in the process of taking their product to the
consumers. Distribution Channels are formed with a “set of interdependent organisations
involved in the process of making a product or service available for use or consumption by
the consumer or business user” (Stern et. al. 1996). Some companies are still using
conventional channels of distribution where there is little control over each other within the
channel members and the individual decisions are made with own profit maximization
intentions rather than with overall effectiveness of the channel in mind. The difference
between a Conventional marketing channel and a Vertical Marketing System (VMS) is that in
a VMS, the members wield high level of power over each other through ownerships,
contractual agreements or scale of volumes. Therefore the decision making in a VMS is more
integrated and consumer oriented.
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Promotions Elements
Promotions element in the marketing mix is used to communicate the features of the
rest of the marketing mix elements to the targeted consumers. More and more companies are
now resorting to practice what is being termed as Integrated Marketing Communication
(IMC), which involves coordinating various promotional elements along with other
marketing activities to communicate with a firm’s customers (Fitzgerald 1988). Traditionally
the companies used the promotional element in isolation and in ad-hoc manner. However
with the concept of IMC, firms seek to create cohesion between all the promotional elements
utilized so that the projected image is a unified.
Today the promotional tools available for marketing communicators has expanded to
include innovative interactive modes such as the web and media options have changed
dramatically over the decades. Advertising, which is considered the strongest element of the
communication mix, is defined as any paid form of no personal communications about an
organization, product, service or idea by an identified sponsor (Belch & Belch 2004). With
the advent of the Internet, the direct marketing means have widened and have brought in
newer interactive media such as websites. Direct marketing can be in the form of direct
response advertising, direct sales, telemarketing, direct mail shots and email campaigns
(Shultz & Barnes 2001). Sales Promotions refers to those marketing activities, which provide
extra value or incentives to the sales force, distributors or to the ultimate consumer with the
aim of stimulating sales volumes (Belch & Belch 2004). Public Relations is the management
function, which evaluates public attitude, identify the policies and procedures of an
organization with the public interest and execute programs of actions to earn the public
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understanding and acceptance (Harris 1998). Personal selling involves any form of direct
selling carried out by the company’s sales force.
In conclusion, it can be noted that organisations have a wide choice of decisions in
choosing how they intend to manage the controllable variables in the marketing process. The
need for constantly monitor the impact of the uncontrollable variables in the environment and
modify the controllable variables in the marketing mix is the challenge for the marketing
personnel. Each company’s combination of marketing mix elements will differ based on
internal and external factors. Organisational capabilities and resources as well as
organisational goals will impact on how the controllable variables are managed. Importance
placed upon each element of the marketing mix will vary according to the markets being
served and in line with the organisational objectives. Lastly it can be noted that with
innovative approaches and flexibility, companies can make use of the wide choice of
decisions pertaining to controllable variables and formulate their marketing strategies to
achieve a sustainable competitive advantage.