8P Marketing Mix – An Approach to Marketing Strategy

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As marketing evolves from 1.0 to 4.0 or 5.0, models like the 4P, 6P, 7P, 8P, and even 9P continue to be updated and expanded. Each of these models represents a value chain that brands aim to deliver to their customers. Depending on the specific sector, businesses will choose different models corresponding to different “Ps.” This article provides a comprehensive overview of the 8P marketing mix, a model that is widely applied today.

Understanding the 8P Marketing Mix

I. Definition of the 8P Marketing Mix and Its Evolution

The marketing mix concept was introduced by Neil Borden in 1960. He described it as a blended marketing strategy encompassing multiple tools to guide businesses on how to bring their products to target customers.

However, E. Jerome McCarthy refined the marketing mix model by proposing four core pillars: Product, Price, Place, and Promotion. The 4Ps in the marketing mix are regarded as the most popular tools for constructing marketing strategies and plans.

With the rise of various business types and fields, the marketing model has been innovated and supplemented with additional “Ps” to align with the evolving landscape. As the service sector gains prominence, and customers become more interested in the human element and service processes, the 7P model emerged by adding three new elements: People, Process, and Physical Evidence.

The 8P marketing model further enhances the previous seven Ps by adding Performance. This model offers a holistic view and is widely utilized across industries.

The 8P marketing mix analyzes eight different aspects of a business essential for developing effective marketing strategies:

1. Product
2. Price
3. Place
4. Promotion
5. Physical Evidence
6. People
7. Processes
8. Performance

The following sections will provide fundamental insights into each of the 8Ps, assisting you in effectively building your marketing and business strategies.

II. The Elements of the 8P Marketing Mix

1. Product

The term “product” encompasses everything that fulfills customer needs. It can be tangible (physical goods) or intangible (services, ideas, experiences). In this context, marketers must clearly define the utility and characteristics of their products.

Using Philip Kotler’s model of five product levels, businesses can generate product ideas:

• Core Benefit: What fundamental needs or wants does your product satisfy?
• Basic Product: What essential features must the product possess to function?
• Expected Product: What additional features might customers expect in the product?
• Augmented Product: What elements differentiate your product from competitors?
• Potential Product: What future improvements or features could enhance the product?

In essence, when designing a product, marketers should focus on two critical points:

1. The product should solve customer problems.
2. The product should meet or exceed customer expectations.

Additionally, when implementing product strategies in your marketing framework, consider the following:

• What product will you sell, and why?
• Which target customer segment are you aiming for?
• Specify the five developmental levels based on customer and competitor research.
• What distinguishes your unique selling proposition (USP)?
• What are the long-term competitive factors of the product?

2. Price

Price is an indispensable part of the marketing strategy. It reflects the value exchanged between the business and consumers. Setting the right price is never straightforward.

Pricing directly influences customers’ perceptions of the brand, products, and market positioning. An overly cheap product may imply low quality, while an excessively high price might alienate potential buyers. Incorrect pricing strategies can lead to business failure.

Numerous factors contribute to product pricing, including production costs, desired profit margins, competitive pricing, and customer expectations. Depending on the market development strategy, businesses will balance profit and costs when determining price.

Common pricing strategies include:

• Cost-Plus Pricing: The price is set based on all costs plus the desired profit.
• Competitive Pricing: Prices are determined based on competitor pricing to capture market share directly.
• Price Skimming: Initial high pricing followed by reductions to attract customers and rapidly grow market share.
• Value-Based Pricing: Prices are set based on customers’ perceived value of the product, particularly effective for unique products.
• Penetration Pricing: Introducing a significantly lower price than competitors to enter the market and gradually increasing it once established.

To effectively implement pricing strategies, consider the following actions:

• Analyze all product costs, including production, management, sales, and marketing expenses.
• Study competitor pricing to ensure your price satisfies customers and remains competitive.
• Assess market reactions to your pricing and adjust accordingly.

3. Place

The “Place” element answers the question, “Where will the product be sold?” A crucial guideline in selecting distribution channels is to sell where customers are present. These locations must allow customers to find the product easily.

Common distribution channel groups include:

• Direct Distribution: Businesses develop their store chains to sell directly to consumers.
• Modern Retail: Involves shopping malls, supermarkets, and convenience stores.
• Traditional Retail: Includes markets, grocery stores, wholesalers, and retailers.
• On-Premise Consumption: Such as bars, restaurants, and hotels.

The distribution strategy corresponds to the business strategy for the product. Three popular distribution strategies are:

• Intensive Distribution: This aims to distribute the product across as many outlets as possible. It is commonly applied to low-cost, essential products that do not require extensive consultation, like instant noodles, toilet paper, and bottled water.
• Exclusive Distribution: This strategy limits distribution to a single outlet or distributor, often for high-value products that require intermediary sales agents to provide additional services.
• Selective Distribution: This strategy involves choosing specific intermediaries or sales points. It is suitable for high-tech or specialized products like computers and smartphones.

When developing distribution strategies, answer the following questions:

• Who is your target customer? Where and how do they make purchases?
• What are the storage and transportation requirements affecting the distribution channel?
• How does pricing and product positioning align with the distribution channel?
• What is the preferred distribution channel?
• What is the budget for establishing the distribution channel?

4. Promotion

Promotional programs aim to reach and persuade customers to purchase products. Typically, businesses do not use isolated tactics but rather combine various promotional tools effectively.

Some commonly used promotional tools include:

• Personal Selling: Direct interaction between sales representatives and customers on a one-on-one basis. This highly personal tool fosters a close relationship between the salesperson and the customer, ideal for solution-based products.
• Advertising: This involves conveying a message to encourage customers to take specific actions regarding a product or brand through media outlets such as newspapers, TV, billboards, and social media.
• Sales Promotions: Programs designed to drive substantial short-term sales increases, such as direct discounts, vouchers/coupons, gifts, sweepstakes, and sampling.
• Public Relations (PR): Developing close relationships with the media and the public to enhance the brand image and mitigate unnecessary media crises.

Before establishing promotional strategies, consider the following:

• Who is your target audience? Which media will help you reach them?
• What are the advantages and disadvantages of each promotional tool?
• How can you effectively combine promotional tactics to achieve marketing objectives?
• What is the budget for promotional activities?

Each tool yields different effectiveness; therefore, choosing and combining strategies based on your current situation and marketing objectives is essential.

5. Physical Evidence

Physical Evidence refers to all the tangible aspects customers see, touch, taste, and feel when interacting with a business, including packaging, labeling, the physical environment of stores, uniforms, and staff attitudes.

Physical Evidence is a strategy that can easily create differentiation from competitors, especially in service industries. For instance, two restaurants may offer the same menu, but the ambiance, location, and staff demeanor can significantly influence customer preference.

If you are unsure how to apply strategies related to Physical Evidence, consider the following guidelines:

• What unique elements do you want to create at customer interaction points?
• What physical evidence are competitors providing?
• What aspects can you improve currently?
• What is the investment required for implementation, and is it worthwhile?

6. People

People are a crucial element for any business and are especially important in the 8P Marketing model. The right personnel can help businesses innovate, develop, and sell products.

They play a vital role in helping the business achieve unexpected success. Conversely, companies should support their staff’s personal development to create value. Continuous training enhances their professional skills.

It is essential to ensure employees feel respected, recognized for their achievements, and secure. Support staff in understanding their roles in the company’s success.

When strategizing for the “People” element, outline a specific development roadmap, including:

• What positions and how many staff are needed?
• What are the monthly and quarterly training plans?
• What benefits and rewards can enhance employee loyalty?

7. Processes

In the 8P marketing model, Processes refer to how a business delivers its products or services to customers. Establishing processes aims to minimize costs and time in delivering products or services while reducing risks.

The more detailed your processes, the greater your business efficiency will be. Common processes in many businesses include:

• Ordering and Delivery Process: This enables businesses to process orders more quickly and manage risks at each step. For customers, it allows them to track their orders and know when to expect delivery.
• Return and Refund Process: This relatively complex procedure involves both parties’ interests. Businesses need to develop specific processes with terms to avoid disputes and additional costs.
• Service Delivery Process: In service sectors, establishing a service delivery process is particularly vital. Customers must know the activities they need to undertake, who they interact with, and how long it will take. Each customer touchpoint should have a reasonable time frame for customers to know the expected duration.

In summary, addressing key issues such as:

• What processes will ensure the efficient delivery of goods/services?
• What systems and technologies will enhance the efficiency of internal operations?
• What procedures will facilitate customer satisfaction during their journey?

8. Performance

Performance focuses on measuring and improving outcomes in the 8P model. Measurement metrics help businesses understand the effectiveness of each marketing element. KPIs related to the 8Ps allow marketers to track marketing effectiveness, determine profitability, and evaluate overall marketing performance.

To integrate Performance in your marketing strategy, consider asking:

• What KPIs will measure overall performance?
• What analytics will help you improve individual Ps?
• How will you manage performance-related issues effectively?

III. Conclusion

The 8P marketing mix is a comprehensive model essential for organizations seeking sustainable competitive advantages. By addressing each element in the mix, businesses can enhance customer satisfaction, build loyalty, and drive profitability.

A well-executed 8P strategy is crucial for adapting to the ever-evolving landscape of marketing, catering to new consumer behaviors, and maximizing opportunities for growth and success in the market.