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Understand the concept and principals of marketing and their application in the business environment.

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Introduction

BTEC National in Business P2- Introduction to marketing Understand the concept and principals of marketing and their application in the business environment. Darren Case Introduction Much thought goes into advertising a product and having a successful product, most people don't realise how much effort and time needs to be put into advertising a product. The main point's businesses use in creating and advertising a product is the four P's, product, price, place and promotion. Place Placement is very important in marketing because you need to know what type of distribution will work best for your company. Placement is the part of the market that deals with distributing products to customers. A business should make the right choice of placement to get their product to customers. If the business doesn't do this then they're not going to make the best possible amount of sales and there's no reason for advertising if customers are unable to find the product in the right place. Placement includes where Poppets are sold and these are called outlets. The best-known places where Poppets are sold are ASDA, Londis, Morrison's, Sainsbury, Tesco, WH Smith, Wilkinson's and Woolworths. The second part of placement is the method of distribution to the customer. If your business chooses the wrong method of distribution then your product may not make enough sales or they may not make any sales at all. ...read more.

Middle

Poppets use this pricing method because their product's regulated retailer price is 40p and they could make it 39p to make the customer feel they're getting more for their money. Differential pricing is charging different prices to different people for the same product. This use of pricing is normally used for student discounts or off/on peak. There is no evidence that shows Poppets use this method of pricing but they don't have o because their product is cheap enough and if they gave a 20% student discount on Poppets then their product will still only be 30p rather than 35p which is not really much difference. This method of pricing doesn't suit Poppets because they have no need to give a student discount because their product is already cheap enough. Penetration pricing is when the price of a product is set low when it is first launched to gain interest. When the product is later into the product life cycle then they will make the price of the product low again to keep interest of the product. Poppets do use this type of pricing because they sometimes make their product cheap to keep the target market interested in the product. It suits Poppets because they will need to keep appealing to their target market and by giving them the product for cheaper than usual it keeps them wanting the product and also other people who haven't had Poppets may try them because they're cheaper than their competitors. ...read more.

Conclusion

While there is no single recipe to determine pricing, the following is a general sequence of steps that might be followed for developing the pricing of a new product: 1. Develop marketing strategy - perform marketing analysis, segmentation, targeting, and positioning. 2. Make marketing mix decisions - define the product, distribution, and promotional tactics. 3. Estimate the demand curve - understand how quantity demanded varies with price. 4. Calculate cost - include fixed and variable costs associated with the product. 5. Understand environmental factors - evaluate likely competitor actions, understand legal constraints, etc. 6. Set pricing objectives - for example, profit maximization, revenue maximization, or price stabilization. 7. Determine pricing - using information collected in the above steps, select a pricing method, develop the pricing structure, and define discounts. These steps are interrelated and are not necessarily performed in the above order. Nonetheless, the above list serves to present a starting framework. Poppets have a relatively higher regulated retailer price for their products as they feel that their product is a higher quality than their competitors. The price for their product is 69p but some retailers will sell it at a higher or lower price. The two pricing methods Poppets use are psychological pricing and cost-plus pricing. Poppets have good pricing methods because it allows them to be a little bit unique from its competitors and this allows them to make the profit they need. Even though they don't have a huge part of the market share they still make plenty of sales every annum. ...read more.

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