The five principles of marketing include what are commonly known as the four Ps, plus a more recent fifth principle: product, price, promotion, place and people. The marketing industry dictates that without these elements, an effective and complete marketing plan is impossible. To ensure the success of any business, a mix of these five principles must be understood and executed properly.
Defined by the American Marketing Association, “Marketing is the activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large.”
The product is the core of any business. If there is no relevant product, good or service, and no need for it, there is no business. The structure and characteristics of the product are important in the marketing mix and must be distinct from the competition.
The second principle is promotion. Having the perfect product is of no significance if no one knows your product exists. Promotion is the process of communicating to a targeted audience a product's benefits and availability. Promotion can also involve creating a perception about the product or service. Advertising, promotional incentives and public relations campaigns are all effective methods of promotion.
The third principle is price. Pricing the product correctly plays a significant role in the marketing mix. Pricing too high or too low can influence consumer perception of the product as well as its availability. There are many strategies that can be implemented with price. A business may believe that a lower price would attract more consumers. However, if the target market is more concerned about elements such as quality, a higher price may be warranted.
The next principle is place. Where a consumer can actually get the product is key. If the product or service cannot be conveniently acquired, a consumer may purchase from the competition. For example, a business may find that offering a product online is more effective than opening a physical store.
The fifth principle is people, or consumers. Understanding customer demand can dictate the product. Products are often developed based upon perceived needs of the consumer.