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The Most Important 4P A company's marketing efforts are essentially about manipulating the 4Ps in various ways. Practitioners become familiar with marketing starting from the 4Ps. The 4Ps are like Play-Doh; it seems anyone in marketing can mold them, even without formal training. In fact, the 4Ps are the DNA of marketing. The magic of the 4Ps lies in the fact that, whether you start with product, price, place, or promotion, you ultimately arrive at a combination of the four elements in some state. This combination determines the company's survival and future destiny. Among these, the most important is the marketing mix centered on the company's cash cow products. Why not star products? Whether star products or question mark products, the marketing mix centered on them is dynamic—neither stable nor final, and possibly fleeting. The logic behind why the cash cow marketing mix determines a company's survival and future is as follows:
- Through market promotion, the company gains a leading product or cash cow product.
- Because of these products, the company's price levels are set, and its distribution channels are formed.
- Because of these products, the company's product line begins to combine—"When one person attains the Tao, even their chickens and dogs ascend to heaven." As a result of product combination, price, place, and promotion also form combinations.
- Ultimately, they together constitute the company's marketing mix.
- Consequently, the company's operational and maneuvering space gradually expands, marketing enters a virtuous cycle, and the company embarks on a normal track and a fast lane of development. Every time a company successfully launches a new product, it effectively creates a new 4P. Once a company adjusts its promotional methods or intensity, it changes the established marketing mix. Therefore, companies that frequently rely on promotions never achieve a stable cash cow marketing mix. Though they work as diligently as bees, they never produce honey. Companies that continuously launch new products but treat their fate carelessly will never form a stable cash cow marketing mix. Even well-known companies, if they treat new products carelessly, will find it difficult to form a new cash cow marketing mix or inject new vitality into their existing one. Under such circumstances, no matter how excellent the current cash cow marketing mix is, it will eventually age. It is not scary when a product ages. But if a company's cash cow marketing mix ages, the company will surely face a catastrophe.
Interpreting the Tactical 4Ps Strategically As carriers of tactics, the two most commonly used elements of the 4Ps are price and promotion. This is the most essential difference between tactical marketing and strategic marketing. Tactical marketing focuses first on sales volume, then price; strategic marketing focuses first on price, then sales volume. In tactical marketing, achieving sales is success; in strategic marketing, failing to hold price is failure. Therefore, for those marketers who treat the marketing mix simply as tactics—constantly using price and promotion to gain sales—they must at least grasp the following key points, or the company will never have peace.
First, the combination of tactical 4Ps. From a tactical perspective, around each product, a new marketing mix can be formed. A company in its growth stage is actually composed of several interdependent and mutually supportive marketing mixes. Without a deep understanding of this, one cannot maximize the power of the marketing mix or create strategic depth for the company's marketing. If a company fails to form a 4P combination and instead continuously plays with price and promotion for a single product, it will soon fall into a predicament. In the past, when Hualong and Baixiang competed with Huafeng and Nancun, the latter lost because they had only one leading product. That product was used to develop the market, maintain the market, and defend against competition. When Hualong and Baixiang defeated that product, they defeated the company. In contrast, consider Master Kong. When Hualong and Baixiang attacked Master Kong's market, Master Kong countered with Fumando. Hualong and Baixiang could never directly attack Master Kong's leading product. Facing attacks from numerous small and medium enterprises, Hualong and Baixiang launched many tactical products, and the attackers eventually exited the market. Those small and medium enterprises that survived were those with more than three marketing mixes. Simply put, companies with a single product and price all closed down.
Second, the company's promotional capability. In every fixed marketing mix, there is a "promotional mix." In the process of building the company's marketing mix, besides product development capability, the most important capability is "promotional capability." This capability determines the overall level and vitality of the company's marketing mix. Clearly, without it, the company will not have an increasingly improved product structure, price structure, and channel structure. The company's promotional capability is determined by its advertising, public relations, personal selling, sales promotion, and direct marketing capabilities.
Third, the formation of differentiation. Differentiation is a strategy; difference is the result. Tactical marketing essentially belongs to natural competition. The ideal result of natural competition is the formation of differences. If natural competition cannot produce differences, then the company's participation in competition results in losing its reason for existence. This difference is not simply reflected in the product but is rooted in the 4Ps. As the company's marketing mix becomes rich and complete, differences inevitably arise. These differences are reflected both in specific marketing elements and in the mix itself. The distinction is that if reflected in specific elements, they are easier to imitate; if reflected in the mix, especially the overall mix, they are easier to fix and pass down.
The above three aspects will ultimately be solidified into three more specific areas in practice.
Product mix: According to the Boston Matrix, the company's product mix can be examined from four aspects. Are there cash cow products, star products, question mark products being promoted, and how many dog products? What is the proportion of these four types? Do they support the company's goals of stable performance and sustained growth?
Market mix: Based on the product mix, the company's markets can also be examined from three aspects. How many mature markets are there, and what is the company's position in these markets? How many growing markets are there, and what is the growth rate and momentum? How many markets are being developed or researched, and what are the development results?
Channel mix: What is the main channel? What is the channel structure? Is the structure continuously optimized?
Tactical 4Ps are, of course, relative to strategic 4Ps. But I do not think there is a clear distinction between the two in practice, because all marketing strategies ultimately must be implemented through tactical 4Ps. Therefore, the difference lies only in creativity and grasp, mainly in how the company's tactics support its strategy.
To express my view more clearly, I call a single marketing mix a micro-mix. In reality, around each product there is such a mix, or each roughly similar type of product has a roughly similar mix. Ultimately, what distinguishes a company's micro-marketing mix is superficially the product, but essentially the price. We can call the company's overall marketing mix the macro-marketing mix.
The level of competition mainly depends on the micro-mix; the level of marketing mainly depends on the macro-mix. If the micro-mix has layers, the macro-mix has strategic space.
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