Understanding the 7P Marketing Model: Steps to Implementation

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The 7P model in marketing is an integral component of the marketing mix strategy, enabling businesses to gain a deeper understanding of customer needs and expectations. By doing so, they can formulate effective solutions to meet these demands. This article will delve into the 7P marketing model and outline the steps for its successful implementation.

What is Marketing Mix?

Before exploring the 7P model, it is essential to grasp the definition of the marketing mix.

The marketing mix refers to the collection of marketing tools that a business utilizes to achieve its marketing objectives in the marketplace. Traditionally, it was categorized according to the 4P model, which consists of Product, Price, Place, and Promotion, focusing primarily on tangible goods marketing. Over time, this model evolved into the 7P framework to accommodate the complexities and advancements in modern marketing.

What Does 7P in Marketing Entail?

The 7P marketing model encompasses seven critical elements and strategies essential for effectively promoting products to target audiences:

• Product
• Price
• Place
• Promotion
• People
• Process
• Physical Evidence

Distinguishing Between the 4P and 7P Models in Marketing Mix

The original 4P model was first introduced by Professor E. Jerome McCarthy in 1960, focusing on four fundamental elements: Product, Price, Place, and Promotion. This model serves as the foundation for developing subsequent marketing mix frameworks and remains widely applicable across various industries today.

However, by the late 1970s, marketers recognized the necessity for enhancements to the marketing mix strategy to better align with evolving market conditions. In 1981, Booms & Bitner expanded this strategy by introducing three additional elements, resulting in the 7P model. This new framework allowed for broader application, encompassing not only tangible goods but also services.

It is worth noting that the 7P model is an evolution of the original 4P model. The significant distinction lies in its aim to provide businesses with profound insights into customer needs and expectations, enabling them to develop appropriate solutions. In contrast, the 4P model primarily serves as a crucial tool, particularly beneficial for small enterprises dealing with conventional goods.

For businesses focused on providing services or offering highly differentiated products, applying the 7P model is imperative. In such cases, the customer experience and post-sale care play pivotal roles in fostering customer satisfaction.

Moreover, the 7P model assists businesses in identifying and addressing key issues affecting their online marketing mix strategy. The fourth technological revolution, digital transformation, and the rise of e-commerce have reshaped consumer behavior in product discovery and purchase. Consumers are no longer passive in their choices; they exhibit selectivity and higher expectations. Consequently, the 7P model places customers at the center by incorporating three additional elements: People, Process, and Physical Evidence.

In summary, the rapidly evolving market landscape driven by technological advancements necessitates an adaptable marketing approach. While the 4P model remains relevant in business operations, the digital age has fundamentally altered how customers select products. Thus, the emergence of the 7P model is crucial for navigating an increasingly dynamic marketplace.

Key Elements of the 7P Marketing Model

As mentioned earlier, the 7P marketing model comprises the following elements:

1. Product
2. Price
3. Place
4. Promotion
5. People
6. Process
7. Physical Evidence

Let’s analyze each of these elements in detail below.

Product

The first “P” in the model, Product, serves as the core of any business. While many perceive products as merely tangible items, an expanding definition now includes intangible offerings—commonly referred to as services—due to increasing consumer demand.

To clarify the essence of a product, marketing experts categorize it into three distinct versions:

• Core Product: This is the inherent value or benefit that a product offers to consumers, which cannot be physically touched. For instance, when purchasing a car, the core benefit lies in convenience, allowing for easy travel at any time and place. Additionally, speed is another benefit, enabling relatively fast movement.

• Actual Product: This refers to the tangible item that customers can physically touch and experience. In the car example, the actual product is the vehicle itself, which can be driven and interacted with directly.

• Augmented Product: This element differentiates a product from its competitors by offering added value. Examples include warranties, customer support services, and post-sale care that enhance the overall customer experience.

A successful product must fulfill customer needs and desires; otherwise, competitors will seize market share, potentially leading to the product’s obsolescence. Hence, understanding the Product Life Cycle (PLC) is crucial.

The PLC consists of four stages:

1. Introduction: This stage marks the product’s entry into the market, requiring significant investment in marketing and promotional campaigns.

2. Growth: During this phase, sales begin to escalate rapidly due to increasing awareness and demand for the product, along with the cost reductions associated with mass production.

3. Maturity: This represents the peak growth phase, where the company generates maximum profits.

4. Decline: With the emergence of new competitors, a business may start losing market share if it fails to innovate its product.

Researching and understanding the product’s life cycle is vital for extending its “life” by prolonging the growth and maturity stages while delaying the decline phase.

Price

Price represents the monetary cost consumers must pay for a product. It is a critical element in defining the marketing mix. Within the 7P model, pricing strategies significantly impact a company’s profitability and sustainability.

Adjusting product pricing can greatly influence the overall marketing strategy and has substantial implications for sales volume and demand.

For instance, if a company is new to the market and lacks brand recognition, its target customers are unlikely to pay a premium price initially. While they may be willing to invest more in the future, capturing that initial interest can be challenging.

When pricing a product, marketers should consider the perceived value it offers.

Marketers need to enhance the perceived value of the product’s benefits alongside its actual value. They must also take into account supply costs, discounts, and competitor pricing. In some instances, companies may choose to raise prices to position their product as more premium or lower prices to enhance accessibility and encourage trials.

Timing discount offerings is also crucial. While discounts may initially attract customers, they can create a perception of lower quality compared to higher-priced competitors.

Pricing policies shape consumers’ perceptions of the product.

Always remember that lower prices may imply inferior quality in consumers’ comparisons with competitors. Conversely, excessively high prices may lead to customers valuing their money over the product.

Consider assessing competitors’ pricing strategies to establish a competitive yet profitable price point.
For further reading, explore: 10 Common Pricing Strategies in Marketing.

Place

“Place” refers to the distribution channels through which goods or services are transferred from producers to consumers.

When making decisions about distribution channels, companies aim to determine where to sell their products and how to effectively reach the market. The primary goal is to ensure products are accessible to potential buyers.

This might involve strategically positioning products in specific retail outlets or optimizing in-store displays. In some cases, “place” may even involve featuring products in television shows, movies, or websites to increase visibility.

To maximize distribution efficiency, businesses must define a distribution strategy. Here are three common distribution strategies:

1. Intensive Distribution: This strategy aims to establish a product’s presence across as many outlets as possible, increasing visibility and customer encounters.

2. Exclusive Distribution: In this approach, manufacturers sell only through select distributors. This strategy helps maintain brand image and is commonly used for premium products, such as those from Chanel or Ferrari.

3. Selective Distribution: This strategy involves carefully choosing distribution channels, with only a limited number of stores selected to carry the product.

It’s crucial to position and distribute products where they are easily accessible to target consumers. This often necessitates a thorough understanding of the market to identify distribution channels that directly connect with your audience.

Consider these questions when developing your distribution strategy:

• Where do customers typically discover your services or products?
• Which types of stores do potential customers frequent? Do they shop in malls, traditional stores, supermarkets, or online?
• How will you access various distribution channels?
• How does your distribution strategy differ from competitors?
• Do you require a strong sales force?
• Should you participate in trade shows?
• Or should you build an online sales channel?

Promotion

Promotion encompasses various marketing communication activities, including advertising, public relations, direct marketing, sales promotions, and personal selling. The primary goal of promotion is to communicate to consumers why they need a product and why they should pay a certain price for it.

Promotion plays a vital role in the marketing mix. Without effective promotion, customers may be unaware of your products and services, leading to stagnant sales.

Let’s delve deeper into the five components of promotion:

1. Advertising: Advertising is most effective when it reaches a wide audience and captures the target market’s attention. Forms of advertising vary from offline methods, such as billboards and bus banners, to online platforms, including social media ads.

2. Public Relations: Companies leverage public relations to communicate messages through existing channels—typically media outlets—by sharing credible information that can be disseminated to a broader audience. Public relations tools range from press releases to guerrilla marketing campaigns, special events, and sponsorships.

3. Direct Marketing: As the name suggests, direct marketing involves marketing directly to specific target audiences. This can include outreach via phone calls, emails, or catalogs.

4. Sales Promotion: Sales promotions aim to stimulate consumer demand. A well-executed sales promotion