Marketing models: from the 4Ps to customer-centred models, and which fits your industry

Marketing models are shorthand. The 4Ps, the 7Ps and the 4Cs each give you a short list of decisions to check, so you do not forget one while you concentrate on another. None of them tells you what to decide. Below you will find where the best-known marketing models come from, what each adds, where each falls short and which fits which kind of business.

A payroll bureau serves as the running example. Amounts are in euros; the logic works in any currency.

What a marketing model does, and what it does not

Marketing is more than selling. Strong businesses line up what they offer, what they charge, where they sell and how they keep in touch, so that every element tells the same story. A model helps you see whether that is the case. Its value lies in the connections: a price rise without better service or clearer communication invites customers to leave. What a model cannot do is replace research. It tells you which questions to ask, not what your customers will answer.

Where the marketing mix comes from

Neil Borden of Harvard Business School popularised the term marketing mix. He liked James Culliton's description of the marketing executive as a "mixer of ingredients" and listed twelve ingredients for manufacturers, from product planning, pricing and branding to packaging, display, servicing, physical handling and fact finding. E. Jerome McCarthy condensed the list into four headings in his textbook Basic Marketing (1960): product, price, place and promotion. The short version stuck, helped by being easy to remember; Borden's long list is still a useful check for manufacturers.

The 4Ps of marketing (McCarthy)

The 4Ps are written from the seller's side and were designed with physical products in mind. Two later models address exactly those limits.

The 7Ps for services (Booms and Bitner)

In 1981 Bernard Booms and Mary Jo Bitner proposed three extra elements for service firms, in a chapter of the American Marketing Association's Marketing of Services. A service cannot be inspected before it is bought, so customers judge it by the people who deliver it, the way it is delivered and the tangible clues around it.

Ruth Brandt runs Brandt Payroll, which handles payroll for small employers such as restaurants, shops and practices. Her mix:

The 4Cs (Lauterborn): the customer's view of the mix

In 1990 Robert Lauterborn, professor of advertising at the University of North Carolina, argued in Advertising Age that the 4Ps had had their day, and proposed four Cs seen from the buyer's side.

The cost to the customer is where the 4Cs earn their keep. One of Ruth's clients is a restaurant with 12 staff. The owner spends about five hours a month collecting paper timesheets and answering queries. Ruth offers a timesheet app at a higher fee, which cuts that time to about one and a half hours. The owner values an hour at €40, what that time could earn in the restaurant.

Fictitious Firmfocus example. All names and figures are invented to show the method.

The fee rises by €432 a year, yet the client's total cost falls by €1,248. Seen through the 4Ps, Ruth is raising her price; seen through the 4Cs, she is lowering the cost to satisfy. Her communication should say "about €1,250 a year less in fees and your own time", not "new app, new fee".

Other marketing models worth knowing

Which marketing model fits your industry?

Many businesses straddle two rows. A café that sells coffee beans online needs the 7Ps for the café and the 4Ps for the webshop. Industry guides such as start a restaurant or café, start an online store and start a consultancy show what matters in each.

Three things that matter more than the model

• Needs before offer: find out what customers struggle with before you design the product, as in value proposition and jobs to be done.
• One story across all elements: price, channel, service and message must support the same promise.
• Reputation as an investment: reviews, referrals and repeat business build slowly and are lost quickly.

Marketing models in a small business and a larger organisation

Marketing model pitfalls

• Filling in boxes: a completed table is not a choice; each line should say what you do differently.
• Treating elements separately: the value lies in how they fit together.
• Ignoring the customer's other costs: time, effort and risk count as much as your price.
• Forcing a product model onto a service: without people and process you miss what clients judge you on.
• Swapping models every year: keep one long enough to compare quarters.

To apply the mix on a small budget, read marketing for small businesses; to put it into a plan with objectives and KPIs, see strategic marketing plan. All marketing topics are in Marketing, and the guides for new businesses in Start a business.