University of the People

BUS 2201 - AY2021-T2

PRINCIPLES OF MARKETING
Written Assignment Unit 1
Instructor Dr Linda Howe
Date: November 14, 2020

Prepare an essay comparing and contrasting a 4-P (price, product, place and promotion)
approach to marketing versus the value approach (creating, communicating, and
delivering value). What would you expect to be the same, and what would you expect to
be different between two companies who apply one or the other approach?
Abstract

Before understanding and being able to compare the 4P approach with the value approach;

we define ​marketing according to our textbook: "the activity, set of institutions, and

processes for creating, communicating, delivering, and exchanging offerings that have value

for customers, clients, partners, and society at."(Raymond, 2010)

4P approach and ​Value approach are two different marketing approaches used by

companies to ensure the success of their products. They are similar but with nuances that

characterise the differences that we will see shortly.

By analysing the various characteristics of the two approaches, ​we will highlight the points

where they are similar​. Later we will talk about the multiple divergences highlighting how

and why the two methods differ.

4P approach:

Price: ​The price represents how much an individual is willing to pay to acquire or use a

particular good or service. It means a fundamental lever for developing new customers or

keeping customers already acquired. By working on the price, it is possible to carry out

campaigns for the launch of new products, eliminate unsold stocks or cover new markets

where there is intense competition.

Product: ​The product or service is the "object" of exchange between the company that sells

and the customer. It represents the reason for the exchange. The product has various

interpretations and classifications that we will surely see later in our course. We have
companies that aim to have a unique product such as Apple or companies that aim to have the

cheapest and most competitive product such as H&M. We always talk about the product.

Place: ​Many years ago the area was a defined and physical place, today thanks to

computerisation and the internet there are physical places such as shops where products or

services are sold for a price, and virtual locations, where the consumer chooses, and the

establishment of purchase becomes the peace of delivery a typical example of this type of

place is Amazon, which represents a type of dematerialisation of the sale.

Promotion: ​The set of actions that advertise our product or service and that push the

customer to buy it. It may concern the characteristics of our product, the conditions of sale or

other particularities that could lead to a purchase.

Value approach:

Creating: ​The offering of value is, everything that is developed and designed to transfer a

value (which in the 4P approach is the product) to a consumer against a currency

exchange.

Communicating: ​The art of communication is the basis of marketing but more generally of

business and humanity. Knowing how to communicate, understanding the needs of

consumers represents the edge in every company. The communication aims to identify and

satisfy the customer's needs to snatch him from the competition. ​(which in the 4P approach

is the promotion)

Delivering value: ​In the value approach, the delivering covers a particular function aimed

not only at the simple delivery of the object or service ​as in the 4P method but ​here we are
in the presence of a much more critical element: giving added value, satisfying the customer

by selling the product or service more according to his needs the best according to how much

an individual is willing to spend.

Exchanging​: “Trading value for those offerings.”​(Raymond, 2010) similar to the 4p ​Price

What would you expect to be different between two companies who apply one or the

other approach?

Moving on to the analysis of the differences between the two approaches, the most evident is

that the ​4P approach tends to be product-oriented​. In contrast, the ​Value approach tends

to be a customer and value-oriented​.

At the basis of the use of one or the other approach, there is a market and product analysis

that will lead the company to use the 4P method if the focus will be on the product and the

value approach if the focus will be on value-added that the customer will acquire with the

purchased object or service.

The price is another point of divergence between the two approaches; in the 4P approach, the

focus is on the most competitive price. The price is used to acquire the customer or keep it, in

the Value approach the price is defined as a value because the intention is giving value to a

customer and this may not coincide with the best price theory but with the certainty of the

best product that best meets the customer's needs.

The place in the two approaches is a different concept in the 4P system represents a physical

or virtual place, a sales channel, a meeting point between supply and demand to put it in

economic terms. In the value approach, the place is focused on value, on the effect that the
so-called customer experience has on the customer, which could be an exceptional package

rather than a multi-sensory sales environment.

The communication this concept is closely linked to the difference in views between the two

approaches regarding the product and value. In the 4P, the communication highlights the

product, its characteristics and at least its competitive price. In the value approach,

communication highlights the added value of your product, its uniqueness and the features

that make it unique.

Conclusions:

From my point of view, the two approaches are the mirror of two specific types of companies

positioned differently in the reference market that intend to take market share using a method

that is more suited to the product and service sold.

I can assume that the 4P approach is used by companies that deal with consumer goods and in

any case with high competition. The value approach is used by companies that, due to the

characteristics of the product or service sold, have no interest in highlighting the best price or

demeaning the competition, they simply focus on the value that their product or service will

bring in the life of the customer who buys.

Reference List

Tanner, J. & Raymond, M.A. (2015). ​Principles of Marketing.​ University of Minnesota Open
Textbook Library.​ Retrieved
from:​https://open.umn.edu/opentextbooks/BookDetail.aspx?bookId=50