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The 4 Ps of Logistics: An Overview of the Model for Success in Shipping

There are many different models that ensure success in any company, but for the purposes of simplicity, we have chosen one model: the 4 Ps of logistics (product, price, promotion, and place). A fifth P for “people” is sometimes suggested as an add-on. There have been a few other add-ons throughout the years, but since the 1950s, the 4 Ps, have stood the test of time against the backdrop of the other “P” term add-ons. Will the newest P for “people” stand the test of time? One would hope. People are important, but who knows what the future will hold as we move towards automation and other new and exciting forms of technologies.

Let’s briefly go over the Ps as well as the newest of the Ps.

Product

The P for product can simply refer to the product itself or can be present in more subtle ways. For example, a company’s logo, the name of the company, packaging designs and methods, services provided, etc. It is basically whatever is being sold. The product, in essence, is what drives the market. Without it, there is no need for the 4Ps model.

Price

The P for price can be associated with prices per-unit involved in making the product, the price of services, energy costs, shipping costs, tariffs, taxes, etc. This is essentially the cost of doing business vs. profitability.

Promotion

The P for promotion may take many different forms. They can be the form of holiday parties, word-of-mouth, business cards, television adds, charity events, deals and discounts being offered at the appropriate times, etc. Even just doing a job well done can easily promote a company.

Place

The P for place can be expressed in warehouse locations, ports of entry, where products are shipped from, the last mile, etc. The place is pretty much any location that the product touches and any location connected to the product being shipped. But the most important aspect of the place is where the product ends up. For the most part, it is irrelevant how the product got there. It is more about the product making it to its destination when it was supposed to be there.

People

The P for people is obviously about the human element involved in the whole process. That could be a customer to a customer representative, a truck driver to the dispatcher, a sales representative to a customer and the rest of the company, or members of a shipping company or logistics company. The human aspect comes in many shapes or forms and is undoubtedly very important.

The 4 Ps (or 5, if you count an extra one!) are not mutually exclusive from one another.

They interrelate with each other to create a sense of balance and can be applied to most aspects in our day-to-day business habits. For instance, a product could be made cheaply elsewhere. But, if the costs to ship that product are too high it may be worth it to find a more costly product domestically, or a product may be stocked up in the warehouse. At the same time, the product simply cannot be moved (maybe through human error or technical difficulties) and at the same time another product can be shipped on demand, making it to the destination faster because that supply chain is running with very little kinks.

Whatever the case may be, try to keep in mind the 4 Ps (or 5 Ps, respectively) in order to strengthen your path to success.

Emre Reyhan
Emre Reyhanhttps://www.mts-logistics.com
Emre is Export Operations Manager at MTS Logistics, and has been with the company since 2006. He holds a bachelor's degree in economics.
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