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Lesson 2 of 5Business Functions
Unit 3 · Lesson 2 of 5

Marketing: The Three Cs and Four Ps

Marketing starts by studying the company, the customer and the competition, turns what makes you different into a mission statement and value proposition, then builds a marketing mix of product, price, place and promotion for each target market.

7 min read1 quick check9 practice questionsInteractiveAsk AI about this →

Key things to remember

  1. 1The three Cs: company (what we do well), customer (who they are and what they need), competition (who else offers it).
  2. 2USP = the one difference customers care about that competitors do not offer.
  3. 3A mission statement says what the business does, for whom and why, built from its USP and brand values.
  4. 4The four Ps: product, price, place, promotion. They must all send the same message to the same target market.
  5. 5Different target markets can get different marketing mixes, but the brand values stay the same.
  6. 6Markup on cost = (price − cost) ÷ cost × 100%; margin = (price − cost) ÷ price × 100%.

Making a great hoodie is only half the job. If nobody hears about Class Act Hoodies, or the price is wrong, or ordering is a hassle, the hoodies stay in Maya's basement. Marketing is the business function that figures out who the customers are, what they want, and how to get the right product in front of them at a price they will pay. Good marketing is not tricking people into buying. It is matching what you do well to what customers actually need.

The three Cs: company, customer, competition

Before choosing a price or making a poster, a business studies three things. The company is you: your skills, equipment, money and values. The customer is the group you want to serve: what they need, what they value, and what they can afford. The competition is everyone else offering something similar, including doing nothing at all. The sweet spot is something customers want, that you do well, and that competitors do not already offer.

CustomerCompanyCompetitionValue propositiona need customers have, that we meet well, and rivals don’tCustomerWho are they?What do they need orwant?What problem do theyhave?What will they pay?CompanyWhat are ourstrengths?What skills andresources do we have?What can we do welland still profit?CompetitionWho else meets this need?What are their strengths and weaknesses?How are we different?
Fig 1The three Cs: the value proposition sits where customer needs meet what the company does well, outside what competitors offer.
CQuestionClass Act Hoodies' answer
CompanyWhat do we do well?Custom designs made with the grad class; a heat press at home; delivery at school; sizes S to XL, expanding to XS to 3XL
CustomerWho are they and what do they need?Graduating students who want a class hoodie that feels personal, arrives on time and costs less than $50
CompetitionWho else offers this?Online custom-print websites (shipping takes weeks and adds cost), a local print shop (large minimum orders), plain hoodies from a mall store
Class Act Hoodies' three Cs.

USP, value proposition and mission statement

  • A unique selling proposition (USP) is the one thing that makes you different from competitors, in a way customers care about. Class Act Hoodies' USP: each grad's name printed on the sleeve for free, delivered at school within one week.
  • A value proposition is a short promise of the benefit a customer gets and why it beats the alternatives: "A class hoodie designed with your grade, with your name on the sleeve, delivered at school in a week, not shipped in a month."
  • A competitive advantage is something that lets you beat competitors and is hard for them to copy, such as being inside the school, knowing the grad class personally, and having no minimum order.
  • Brand values are the beliefs the business promises to act on. Class Act Hoodies': student-made, inclusive (every size, no extra charge), and low-waste.
Example: a student-run bike repair serviceFeatureCustomersneed it?We offer it?Competitorsoffer it?ResultSame-day repairsUSP: a gap only wefillFree pick-up at schoolUSP: a gap only wefillLow pricesExpected: match it,but it isn’t uniqueSells new bikesNot needed by ourcustomers: skip itValue proposition statementFor busy students whose bikes break, our service offers same-day repairs with free pick-up atschool, unlike bike shops that take a week.
Fig 2Finding a USP: keep only what customers need, you offer, and competitors do not. The example shown is a student bike repair service.

A mission statement says what the business does, for whom, and why, in one or two sentences. A strong one is built from the USP and the brand values, so everyone working in the business knows what to prioritize. Class Act Hoodies': "Class Act Hoodies makes custom hoodies designed with each graduating class, with every grad's name on the sleeve, delivered at school within a week, in every size and with low-waste packaging, so every grad can wear their milestone."

TodayFutureMissiontoday: our purposeWhat do we do?For whom?Why does it matter?Example“We tune and repair bikesat customers' homes sostudents and families inour town can ride safely,without hauling a bike to ashop.”SMART goalsmilestones along the wayWhat will we achieve?How much?By when?Example“Complete 60 tune-ups at$50 each, for $3,000 insales, by August 31.”Visionthe future we aim forWhere are we going?What will we become?Example“To be our region's go-tobike-care service, helpingmore people ride everyday.”Is the goal SMART?S Specifictune-ups forlocal ridersM Measurable60 tune-ups,$3,000 in salesA Achievable5 a week × 12weeks = 60R Relevantbuilds our coreserviceT Time-boundby August 31
Fig 3A mission says what you do today, for whom and why; goals are measurable steps; a vision says where you want to be.
Quick checkTry it before you read on
1
Which of these is a unique selling proposition rather than just a feature every competitor has?

The four Ps of the marketing mix

The marketing mix is the set of four decisions a business makes to reach a target market: product (what you sell, including features, sizes, quality and packaging), price (what customers pay, and any discounts), place (how and where customers get it), and promotion (how customers hear about it and why they should buy). The four Ps must complement each other, which means they support the same message. A premium hoodie sold at a bargain price in a messy pop-up sends mixed signals, and customers notice.

ProductWhat will we sell?Features, quality, and designBrand name and packagingProduct line: sizes and versionsWarranty and after-sale servicePriceWhat will customers pay?Pricing strategy and objectivesList price, discounts, and salesPayment terms and financingPerceived value vs. competitorsPlaceHow will it reach them?Channels: direct, retail, onlineStore locations and coverageInventory, storage, andtransportOnline ordering and deliveryPromotionHow will we tell them?Advertising and social mediaSales promotions and contestsPublic relations and eventsPersonal sellingTargetmarketevery P isaimed at them
Fig 4The four Ps work together around one target market.
PClass Act Hoodies' decisionHow it supports the others
ProductHeavyweight hoodie, class design, name on sleeve, sizes XS to 3XLPersonal and high quality, which justifies a mid-range price
Price$40 each (cost $26)Below online sites once their shipping is added; still leaves $14 per hoodie
PlaceOnline order form; pick-up at school at lunchNo shipping cost or delay, which backs up the one-week promise
PromotionInstagram posts of real grads wearing samples; a table at a grad council meetingShows the product on people the customers know
Class Act Hoodies' marketing mix for graduating students.
Loading interactive…
Try a cost of $26 and a price of $40, then change the price to see how markup and margin move.
VideoWatch each of product, price, place and promotion applied to one real business, then try the same with your own venture.Watch on YouTube

Different strategies for different target markets

A target market is the specific group of customers a business chooses to serve. Businesses often serve more than one, with a different mix for each. They divide the market (this is called segmentation) by things like age, location, lifestyle and buying behaviour. Class Act Hoodies notices that sports teams and clubs also want matching hoodies, but they care about different things.

Four ways to divide a market into segmentsDemographicWho are they?Agee.g. 13–17, 18–24, 25–34, 65+Incomee.g. low, middle, or high household incomeFamily life stagee.g. single, young family, empty nesterGeographicWhere are they?Regione.g. Atlantic, Quebec, Ontario, Prairies, B.C.Population densitye.g. urban, suburban, ruralClimatee.g. snowy winters vs. a mild coastPsychographicHow do they live and think?Lifestylee.g. outdoorsy, homebody, gamerValuese.g. eco-friendly, thrifty, status-seekingPersonalitye.g. adventurous, cautious, socialBehaviouralHow do they act toward the product?Usage ratee.g. heavy, medium, light, non-userBenefits soughte.g. low price, convenience, quality, statusBrand loyaltye.g. loyal, brand switcher, first-time buyer
Fig 5Common ways to divide a market into segments.
AGraduating students
  • Product: class design plus each name on the sleeve
  • Price: $40 each
  • Place: individual orders, pick-up at school
  • Promotion: Instagram, grad council table
BSports teams and clubs
  • Product: team logo and player number, team colours
  • Price: $36 each for 10 or more (bulk discount)
  • Place: one bulk order through the coach or club lead, delivered before the season
  • Promotion: email to club leads, a sample hoodie at tryouts
Brand consistency
Even with different mixes, the brand stays the same: student-made, every size at no extra charge, low-waste packaging. Changing the mix for a market is smart; changing your values for a market is not.
TRAILBITFuel the next summit.granola insideLogoMountain-peak symbol peoplecan recognize without readinga word.Name“Trailbit”: short, easy tosay, and hints at trailsnacks.Slogan“Fuel the next summit.”States the benefit in a fewwords.PackagingResealable pouch with awindow: protects and showsthe product.ColourEarthy green on every itemsignals natural and outdoors.Brand promise (what every element repeats)“Real ingredients and steady energy for every outdoor adventure.”Brand equity (built over time)The extra value the name earns: recognition, trust, loyalty, and theability to charge more than an unknown brand.
Fig 6Name, logo, slogan and colours all carry the same brand values.

Worked examples

Reveal one step at a time and try to beat it to the next line.

Example 1
Build Class Act Hoodies' mission statement from its USP and brand values.
Example 2
Each hoodie costs Class Act Hoodies $26 to make and sells for $40. Find the markup on cost and the profit margin, each to one decimal place.
Example 3
Class Act Hoodies offers sports teams $36 per hoodie for 10 or more. Is the bulk price still worth it? Compare the profit from one team order of 15 hoodies with 15 single grad orders.

Where marks get lost

  • Calling something a USP when every competitor offers it, like "good quality" or "comfortable".
  • Writing a mission statement so vague it could belong to any business ("We provide great products to customers").
  • Choosing the four Ps separately so they clash, such as a premium product with bargain-bin promotion.
  • Using one marketing mix for every target market even though the groups want different things.
  • Mixing up markup (divide by cost) and margin (divide by price).

Flashcards 8

The three Cs
Unique selling proposition (USP)
Value proposition
Competitive advantage
+ 4 more

Practice

1
Match each Class Act Hoodies decision to the P it belongs to.
Sizes XS to 3XL with a name on the sleeve
$36 each for orders of 10 or more
Pick-up at school at lunch
Instagram posts of grads wearing samples
2
Which of the three Cs does the question "How long does an online print site take to ship?" belong to?
3
Which is the strongest mission statement?
4
A product costs $15 to make and sells for $25. What is the margin, as a percent to one decimal place?
%
5
Class Act Hoodies wants a 60% markup on a $26 cost. What price should it charge, to the nearest cent?
$
6
Why might a business use a different marketing mix for sports teams than for individual grads?
7
What is the three-letter short form for the one difference that makes a business stand out from competitors?
8
Which marketing mix does NOT complement itself?
9
Put these marketing planning steps in a sensible order.
  1. 1Identify the USP and brand values
  2. 2Build the four Ps for the target market
  3. 3Write the mission statement
  4. 4Study the company, customer and competition

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