8Ps formla for business growth (framework)

How to Grow Your Business with the 8Ps Formula

The 8Ps formula is a powerful framework that helps businesses identify and solve the key challenges they face in the market. The 8Ps stand for problem, prospect, people, product, price and positioning, process and performance, profit, and purpose. By applying these elements to your business, you can create a clear and compelling value proposition, attract and retain your ideal customers, optimize your operations and marketing, and achieve your financial and social goals.

In this article, we will explain what each of the 8Ps means, why they are important, and how to apply them to your business. We will also provide some examples of successful businesses that have used the 8Ps formula to grow and thrive.

Problem

The first P of the 8Ps formula is problem. This refers to the specific pain point or need that your target market has, and that your product or service can solve or satisfy. Your problem should be clearly defined, validated, and quantified, as it is the foundation of your value proposition and your competitive advantage.

Some questions to ask yourself when identifying your problem are:

What is the main problem that your target market faces?
How does this problem affect their lives or businesses?
How big is this problem and how many people have it?
How do they currently try to solve this problem and what are the drawbacks of their solutions?
How can you solve this problem better, faster, cheaper, or easier than anyone else?

Some examples of businesses that have identified a clear and compelling problem are:

Airbnb: Airbnb is a platform that connects travelers with local hosts who offer unique and affordable accommodation options. Airbnb’s problem is the lack of variety, availability, and affordability of traditional accommodation options for travelers, especially in popular destinations. Airbnb’s solution is to enable travelers to access a wide range of local and authentic experiences, while also empowering hosts to earn extra income from their unused spaces.
Slack: Slack is a cloud-based collaboration tool that allows teams to communicate and work together more efficiently and effectively. Slack’s problem is the inefficiency, fragmentation, and complexity of traditional communication and collaboration tools, such as email, phone, and meetings. Slack’s solution is to create a single platform that integrates all the tools and information that teams need, and that enables them to communicate and collaborate in real time, across devices and locations.

Prospect

The second P of the 8Ps formula is prospect. This refers to the potential customers who have the problem that your product or service can solve, and who are willing and able to buy from you. Your prospect should be clearly identified, segmented, and targeted, as they are the focus of your marketing efforts.

Some questions to ask yourself when defining your prospect are:

Who are your ideal customers and what are their characteristics, such as demographics, psychographics, behaviors, etc.?
How can you reach your prospects and what are the best channels to communicate with them?
How can you attract your prospects and generate interest and awareness for your product or service?
How can you qualify your prospects and move them along the sales funnel, from leads to customers?

Some examples of businesses that have defined and targeted their prospects effectively are:

Spotify: Spotify is a streaming service that offers millions of songs, podcasts, and playlists to its users. Spotify’s prospects are music lovers who want to access and discover new music, as well as create and share their own playlists. Spotify reaches its prospects through various channels, such as social media, email, referrals, and partnerships. Spotify attracts its prospects by offering a free trial, personalized recommendations, and exclusive content. Spotify qualifies its prospects by using data and analytics to segment and target them based on their preferences, behaviors, and locations.
Shopify: Shopify is a platform that enables anyone to create and run an online store. Shopify’s prospects are entrepreneurs who want to sell their products or services online, without the hassle of coding, hosting, or managing inventory. Shopify reaches its prospects through various channels, such as blogs, podcasts, webinars, and ads. Shopify attracts its prospects by offering a free trial, a user-friendly interface, and a variety of templates and features. Shopify qualifies its prospects by using landing pages, forms, and chatbots to collect and nurture their information and needs.

People

The third P of the 8Ps formula is people. This refers to the human resources that are involved in your business, such as your employees, partners, suppliers, and customers. Your people should be aligned with your vision, mission, and values, as well as your product, price, and place. Your people should also be trained, motivated, and empowered to deliver your product or service to your customers.

Some questions to ask yourself when managing your people are:

What are the roles and responsibilities of your people and how do they contribute to your business goals?
How do you recruit, train, and retain your people and what are the skills, knowledge, and attitudes that they need?
How do you motivate, reward, and recognize your people and what are the incentives, feedback, and recognition that they expect?
How do you empower, communicate, and collaborate with your people and what are the tools, systems, and culture that you foster?

Some examples of businesses that have managed their people well are:

Zappos: Zappos is an online retailer that sells shoes, clothing, and accessories. Zappos is known for its exceptional customer service and its happy and loyal employees. Zappos recruits its people based on their fit with the company’s core values, such as delivering wow, being adventurous, and being humble. Zappos trains its people extensively, including a four-week customer service course and a two-week culture camp. Zappos retains its people by offering generous benefits, such as free health care, paid vacations, and a $2,000 quitting bonus. Zappos motivates its people by giving them autonomy, purpose, and growth opportunities. Zappos empowers its people by allowing them to make decisions, express themselves, and have fun.
Southwest Airlines: Southwest Airlines is a low-cost airline that operates in the US and beyond. Southwest Airlines is known for its friendly and efficient service and its dedicated and passionate employees. Southwest Airlines recruits its people based on their attitude, personality, and teamwork skills, rather than their experience or qualifications. Southwest Airlines trains its people rigorously, including a six-week flight attendant course and a three-week pilot course. Southwest Airlines retains its people by offering competitive pay, profit sharing, and stock options. Southwest Airlines motivates its people by giving them recognition, appreciation, and celebration. Southwest Airlines empowers its people by allowing them to be themselves, have fun, and make a difference.

Product

The fourth P of the 8Ps formula is product. This refers to the tangible and intangible products and services that you offer to your customers. Your product should meet or exceed your customers’ expectations and solve their problems or satisfy their desires. You should also consider how your product differs from your competitors’ products and what unique value proposition you can offer to your customers.

Some questions to ask yourself when developing your product are:

What are the features and benefits of your product?
How does your product fit the needs and wants of your target market?
How does your product compare to your competitors’ products in terms of quality, design, functionality, etc.?
How can you improve your product to make it more appealing, useful, or innovative?

Some examples of businesses that have created successful products are:

Apple: Apple is known for its innovative and user-friendly products, such as the iPhone, iPad, Mac, Apple Watch, AirPods, etc. Apple’s products have a distinctive design, high performance, and seamless integration with other Apple devices and services. Apple’s products also create a loyal fan base and a strong brand identity.
Netflix: Netflix is a leading provider of online streaming services, offering a wide range of movies, TV shows, documentaries, and original content. Netflix’s product is convenient, affordable, and personalized, as it allows customers to watch what they want, when they want, and how they want. Netflix’s product also adapts to the changing preferences and behaviors of its customers, as it uses data and algorithms to recommend and produce relevant content.

Price and Positioning

The fifth P of the 8Ps formula is price and positioning. This refers to the amount of money that you charge for your product or service, and how you position your product or service in the market. Your price and positioning should reflect the value that you provide to your customers, as well as your costs, profit margins, and competitive position. You should also consider how your price and positioning affect the perception and demand of your product or service.

Some questions to ask yourself when setting your price and positioning are:

What are the costs involved in producing and delivering your product or service?
What are the profit goals and objectives of your business?
What are the prices of your competitors and how do they compare to yours?
How sensitive are your customers to price changes and what are their price expectations?
How can you use pricing strategies, such as discounts, bundles, premiums, etc., to influence customer behavior and loyalty?
How do you want your customers to perceive your product or service in relation to your competitors and the market?
How do you communicate your value proposition and differentiate your product or service from others?
How do you leverage your brand image and reputation to enhance your price and positioning?

Some examples of businesses that have used effective pricing and positioning strategies are:

Starbucks: Starbucks is a global leader in the coffee industry, offering a premium product and experience to its customers. Starbucks charges higher prices than its competitors, such as Dunkin’ Donuts or McDonald’s, but it also delivers higher quality, variety, and customization. Starbucks’ pricing and positioning strategy reflects its brand image, value proposition, and customer loyalty.
Uber: Uber is a popular ride-hailing service that uses dynamic pricing to adjust its fares according to the supply and demand of drivers and riders. Uber’s pricing and positioning strategy allows it to optimize its revenue and utilization, as well as to attract and retain customers and drivers. Uber’s pricing and positioning strategy also creates a sense of urgency and scarcity among its customers, who may be willing to pay more for a ride during peak times or surge periods.

Process and Performance

The sixth P of the 8Ps formula is process and performance. This refers to the activities and systems that are involved in delivering your product or service to your customers, and how you measure and improve the quality and efficiency of your delivery. Your process and performance should ensure that your customers receive your product or service in a timely, consistent, and satisfactory manner. You should also consider how your process and performance affect your customer satisfaction, retention, and loyalty.

Some questions to ask yourself when managing your process and performance are:

What are the steps and stages involved in delivering your product or service to your customers?
How do you ensure that your delivery is fast, reliable, and accurate?
How do you handle customer inquiries, complaints, and feedback?
How do you monitor and evaluate your delivery process and performance?
How do you identify and resolve any issues or problems that may arise in your delivery process and performance?
How do you improve and innovate your delivery process and performance to meet or exceed your customers’ expectations?

Some examples of businesses that have managed their process and performance well are:

Amazon: Amazon is an e-commerce giant that offers a vast selection of products and services to its customers. Amazon’s process and performance is remarkable, as it delivers its products and services in a fast, convenient, and reliable way. Amazon uses advanced technology, such as artificial intelligence, robotics, and drones, to optimize its delivery process and performance. Amazon also offers various options and benefits to its customers, such as Prime membership, free shipping, and easy returns.
Domino’s Pizza: Domino’s Pizza is a pizza delivery chain that offers a variety of pizzas and other products to its customers. Domino’s Pizza’s process and performance is impressive, as it delivers its pizzas in a hot, fresh, and tasty way. Domino’s Pizza uses innovative technology, such as online ordering, GPS tracking, and voice ordering, to enhance its delivery process and performance. Domino’s Pizza also offers various incentives and guarantees to its customers, such as rewards, coupons, and 30-minute delivery.

Profit

The seventh P of the 8Ps formula is profit. This refers to the financial results and outcomes that you achieve from your business activities, and how you use them to sustain and grow your business. Your profit should reflect the value that you create for your customers, as well as the value that you capture for your business. You should also consider how your profit affects your stakeholders, such as your employees, partners, suppliers, and society.

Some questions to ask yourself when managing your profit are:

How do you calculate and report your profit and loss?
How do you analyze and interpret your profit and loss?
How do you compare and benchmark your profit and loss with your competitors and the industry?
How do you allocate and reinvest your profit and loss?
How do you balance your short-term and long-term profit and loss?
How do you optimize your profit and loss?

Some examples of businesses that have managed their profit well are:

Costco: Costco is a warehouse club that offers a wide range of products and services to its members at low prices. Costco’s profit is remarkable, as it generates high sales volume and revenue, while maintaining low operating costs and margins. Costco uses a membership fee model, a limited product selection, a high inventory turnover, and a low-cost leadership strategy to maximize its profit. Costco also shares its profit with its stakeholders, such as its employees, customers, and communities.
Patagonia: Patagonia is an outdoor clothing and gear company that offers high-quality and environmentally friendly products and services to its customers. Patagonia’s profit is admirable, as it generates high customer loyalty and advocacy, while maintaining high social and environmental standards and values. Patagonia uses a premium pricing strategy, a strong brand identity, a loyal customer base, and a social and environmental mission to optimize its profit. Patagonia also donates its profit to its stakeholders, such as its employees, customers, and causes.

Purpose

The eighth and final P of the 8Ps formula is purpose. This refers to the ultimate reason and goal that you have for your business, and how you communicate and demonstrate it to your customers and stakeholders. Your purpose should inspire and motivate you and your people, as well as your customers and stakeholders. You should also consider how your purpose aligns with your vision, mission, and values, and how it guides your decisions and actions.

Some questions to ask yourself when defining your purpose are:

Why do you exist as a business and what is your ultimate goal?
How do you create value and make a difference for your customers and stakeholders?
How do you express and share your purpose with your customers and stakeholders?
How do you measure and evaluate your purpose and its impact?
How do you evolve and adapt your purpose to changing needs and expectations?

Some examples of businesses that have defined and demonstrated their purpose well are:

Tesla: Tesla is an electric vehicle and clean energy company that offers innovative and sustainable products and services to its customers. Tesla’s purpose is to accelerate the world’s transition to sustainable energy. Tesla creates value and makes a difference by developing and delivering cutting-edge and eco-friendly products and services, such as electric cars, solar panels, and batteries. Tesla expresses and shares its purpose with its customers and stakeholders through its visionary founder, Elon Musk, its bold marketing, and its loyal fan base. Tesla measures and evaluates its purpose and its impact by setting and achieving ambitious and audacious goals, such as launching a car into space. Tesla evolves and adapts its purpose to changing needs and expectations by constantly innovating and expanding its product and service portfolio.
TOMS: TOMS is a shoe and eyewear company that offers stylish and comfortable products to its customers. TOMS’ purpose is to improve lives through business. TOMS creates value and makes a difference by following a one-for-one model, where for every product purchased, a person in need is helped. TOMS expresses and shares its purpose with its customers and stakeholders through its founder, Blake Mycoskie, its storytelling, and its social media. TOMS measures and evaluates its purpose and its impact by tracking and reporting its giving activities, such as providing shoes, sight, water, and safe birth to millions of people around the world. TOMS evolves and adapts its purpose to changing needs and expectations by diversifying and improving its product and service offerings, as well as its giving partners and programs.

Conclusion

The 8Ps formula is a comprehensive and practical framework that can help you grow your business in a strategic and effective way. By applying the 8Ps to your business, you can create a clear and compelling value proposition, attract and retain your ideal customers, optimize your operations and marketing, and achieve your financial and social goals.

The 8Ps formula is not a rigid or fixed model, but rather a flexible and adaptable one. You can use it as a guide and a tool to design and implement your own marketing mix that suits your business and your market. You can also review and revise your marketing mix periodically to ensure that it is aligned with your purpose and your customers’ needs and expectations.

We hope that this article has given you some insights and inspiration on how to use the 8Ps formula for your business growth. If you need any help or guidance, feel free to contact us. We are here to help you succeed.