The 4P and 7P marketing mix and its importance for business success

Marketing mix - definition

Philip Kotler, along with Gary Armstrong, in one of the most widely used marketing books, aptly titled Marketing, define the characteristics of the marketing mix as "The marketing mix is a set of tactical marketing tools - product, pricing, distribution and communication policies - that enable a firm to tailor its offerings to the desires of customers in its target market."

The concept of the marketing mix, also known as the 4Ps, was first introduced by academic Jerry McCarthy in his 1960 publication Basic Marketing: A Managerial Approach. It can be broken down into several related categories that may overlap.

The marketing mix consists of the following 4 components: price, place/distribution, promotion and product. These components form the basis of everything your organization is about:

• Product - includes product utility, brand, packaging, assortment, quality, warranties, design, manufacturer image and ancillary services.
• Price - includes not only the price of the product itself, but also the costs associated with production, various wholesale and retail price lists, discounts, price promotions, refunds, credit options and payment terms.
• Distribution (Place) - this includes the entire process by which a product travels from the manufacturer to the customer: sales channels, logistics, transport methods, availability, intermediaries, as well as the point of sale, whether it is a physical store, a network of sales representatives or an electronic store (e-shop).
• Promotion - the various tools used to inform customers about the product, gain their attention, build awareness of the company and the brand. These tools include advertising, public relations (PR), sales promotion, social networking, internet marketing and word-of-mouth.

Why are the 4Ps crucial for companies?

The 4P marketing mix provides companies with an overview of their current marketing approach and shows areas for improvement. When companies understand that the different components of the 4Ps are interconnected and should not be considered in isolation, they can develop comprehensive strategies that lead to improved results. It is also important to recognize that even though each of the P's is considered separately when developing an overall strategy, they influence each other.

For example, an increase in price may reduce demand due to availability problems, but at the same time may reinforce the perception of quality if associated with premium products. Similarly, changes in promotion can increase awareness, which in turn leads customers to consider buying.

The expanded 7P marketing mix then includes the following additional points:

• People: this component focuses on all the people who are part of the delivery of the product or service, whether they are employees, salespeople, consultants or customers.
• Process: Process refers to the systems and procedures that an organisation uses to deliver its products or services to customers. This includes the entire sales process from order to delivery as well as any follow-up services after the sale.
• Physical Evidence: This category includes all tangible elements that show customers what the product or service is. This can include the physical product, packaging, marketing materials, website, testimonials and sales premises. The goal is to provide the customer with tangible evidence of the value the product or service delivers.

How to apply the marketing mix in everyday business operations?

The main key to using the marketing mix successfully lies in the right perspective. Some entrepreneurs make the mistake of seeing it only from a salesperson's perspective. However, for optimum results, the marketing mix should be understood primarily from the customer's perspective. We are talking here about the 4C (Customer Value, Communication, Convenience and Cost) marketing mix:

• the product is seen as a value for the customer (or a solution to their needs),
• price represents the customer's cost,
• location is perceived as comfort/convenience (or availability of the product/service)
• and promotion is seen as communication with the customer.

Address segmentation, targeting and positioning

It is essential to define segmentation, targeting and positioning well before deciding to apply the marketing mix.

• Segmentation is the process of dividing the customer base into similar groups with respect to different criteria (age, gender, geographic area, interests, etc.). The next step is to determine the size of these groups and create profiles of them. Then, the segments to which the organisation is able to give long-term attention and which are capable of generating sufficient profit are evaluated and selected.
• Segmentation is complemented by the targeting process, which consists in selecting the most suitable markets for the company. This includes predicting the growth of the customer base, assessing their financial capabilities, evaluating possible substitutes, competitive threats and other factors. Targeting is a key part of the marketing strategy.
• Positioning is the process of forming the opinions and attitudes that customers have towards a brand. The aim is to arouse specific psychological reactions in them. They need to be told what your values are so that they can identify with your brand and have the desire to buy your products or services. This step should clearly communicate to potential customers why they should choose you.

Algotech's cloud services marketing mix

We are a leading Czech IT company that specializes in providing comprehensive services and solutions in the field of communication and information technology. Our company focuses on innovative approaches and we offer a wide range of services to help our clients optimize their business. One of our key services is cloud solutions. And what would the marketing mix for this service look like?

(This is a simplified example to understand the individual 4P items, it is not the actual Algotech mix)

• Product: Algotech offers cloud solutions designed to support the efficiency and scalability of business operations. These solutions include data storage, backup and other services to optimize IT infrastructure. Key product features include a high level of security, 24/7 availability, and personalization to meet customer needs.
• Pricing: cloud solutions are priced on a pay-as-you-go model, allowing customers to pay only for what they actually use. Algotech also offers packages for a variety of business sizes - from small to large corporations, allowing for multiple pricing options.
• Distribution: Algotech services are available nationwide and beyond. We distribute our cloud solutions through our sales team and consultants who personally interact with customers to offer customized solutions. We also use online platforms such as our website where customers can find detailed information and contact forms. We also work with a partner network and participate in professional conferences and trade fairs to reach a wider audience and potential customers.
• Promotion:Algotech uses various marketing strategies to promote its cloud solutions. These include digital marketing, the aforementioned participation in industry trade shows and conferences, press releases and case studies that showcase successful customer implementations of our solutions.

A few tips to finish - what shouldn't you forget?

When considering your business, don't just focus on your own needs, but rather the needs of your customers. Try to think like them. How will your product benefit them? What costs will they have to incur? How accessible is your product to them and how can you approach it so they know it's right for them? Be creative and innovative - the marketing mix is not just a template, tailor it to your company's needs.  

The key to your company's success

Find out who your customers are, how to reach them and how to reach them. What is your biggest focus as a company? How do you want to present your company? There is no exact prescription, so of course always use your own judgement and the current situation. You just can't do it without innovation. The marketing mix should not be static, as it is constantly evolving, just like everything else.

Your data, our care: Algotech - a long-term partner

At Algotech, we offer you not only data storage, but also a reliable and long-term partnership. Your data will be stored in our data centre in the Czech Republic. The price for purchasing OwnCloud is determined by your needs, not by the number of users you add. Our ServiceDesk is here for you 24/7/365 in both Czech and English. We respond to each request within 5 minutes on average and resolve most of them within 30 minutes. With us, you will have a long-term partner by your side who has been on the market for more than 25 years and who has more than 120 permanent specialists at his disposal.