The 4 Ps approach to marketing is a traditional way of marketing that has been used by many companies since the 1950s. It focuses on the product itself where the 4 Ps stand for Product, Price, Place and Promotion. The value approach to marketing was introduced years later and focuses on creating, communicating and delivering value to the customer. The main difference between the two approaches is that the 4Ps focuses on the product whereas the Value approach focuses on value to the customer (Gabbott, 2004).
The major elements of the 4Ps are Product, Price, Place, and Promotion. The product means producing the right product to satisfy the needs of the company’s target customers. A company using this approach will create a product or service that is unique, distinctive or better than the competitors products. A company will create a unique product through introducing a new product to the market or upgrading an existing product. Once this is done, the product should sell itself due to its uniqueness.
The price means the right product at the right price. Under the 4Ps approach, the company should price the product or service in order to have a competitive advantage. The company may use different pricing strategies such as price reductions or premium pricing depending on the product and target market. The right product should sell itself with the right price.
Place means that the company should create or find distribution channels through which to sell its products and services. It requires that the product is delivered where the customer can purchase it. Under the 4Ps approach this means the right product at the right price available at the right place where customers can purchase it.
Promotion means communicating to customers on the advantages, features and unique qualities of the product or service so that the customer learns about the product, prefers it to the competitors product and takes the opportunity to buy it at some location. It involves informing potential customers about a product, its price and where it can be purchased.
The market has developed since the 1950s, and this has led to the 4Ps being ineffective because the concept of product, price, place and promotion are no longer the only activities that are involved in marketing a product or service. It is for this reason that the value approach to marketing was developed which is more effective than the 4Ps (Kotler, 1991).
In the value approach, the first step is creating value which means creating a product that give vaue to the customer which is very similar to the product stage of the 4Ps approach. However, in the 4Ps approach the company only creates the product where as in the value approach the company creates a product plus additional benefits to the customer. For example a company selling home appliances will create a product such as washing machine. Under the 4Ps approach the company will focus on the unique features of the washing machine. However under the values approach a company will offer a post-sales service for the washing machine. The company in this case sells a value offering and not the product itself as is the case in the 4Ps approach. Creating value includes additional factors in the marketing of the product (Gummesson, 2008).
The second step in the value approach is communicating value. This is similar to the promotion element in the 4Ps approach as they both involve providing information to the customer. The promotion in the 4Ps deals with promoting and advertising the product while the value approach communicates the value of the product that includes service, benefits, and the enjoyment the customer will receive with the product. It also includes learning about the customer’s preferences and desires as they offer the benefits.
The final step in the value approach is delivering value. This is similar to the place element in the 4Ps approach to marketing. The difference is that place only requires a location where the customer can buy the product; while delivering value involves ensuring that the customer is able to get the most of the product or service.
In conclusion, the 4Ps approach focuses on the product while the value approach focuses on the customer. The value approach creates, communicates, and delivers value to customers in order to enhance customer relationships and benefits the organization and stakeholders. It is often viewed as a more effective way of attracting additional customers, getting them to buy the company’s products, and keeps them delighted even after they have purchased the product or service. Such customers are likely to tell their family and friends about the product and come back for more. Marketing is an important function for any company which can make or break a business. Companies may use either approach, but it is important to note a company using the 4Ps approach must ensure that each element creates value for its customers.