(Quote from Business Studies 4th Edition Bruce R Jewell)
Marketing mix activities, or elements, can be organized into four distinct but related categories. The goal in carrying out all our marketing activities is to have the right product in the right place at the right price with the right promotion. For convenience we call these categories the Four Ps of marketing: , , , .
Product
The first P in the "Four Ps" stands for Product. A product is the thing that we offer to satisfy the customer need. A product may be a physical good, or a service, or a blend of both.
We must be concerned with developing the right product for the target market. Just because a product is newer, or faster, or shinier doesn't mean that it will sell in the marketplace. Unless features satisfy needs, customers won't buy them.
The market segment that my customers belong to are
- Single married – young – no children
- Newly married – young – no children
- Full nest (1) – youngest child under 6
- Full nest (2) – youngest child over 6
- Full nest (3) – children at home but working
- Empty nest (1) – children left home, partner still working
- Empty nest (2) – both partners retired
- Solitary Survivor – still at work
The main competition any large electronic organisation faces is from larger rival companies such as Dixon’s, Curry’s Comet. These larger national companies pose a threat, as they have greater power to control the market and prices. The main competitors my electronic business has are from smaller rival companies such as Cash Converters, Capital FX, Big W, Caz Electrical Corner and Empire.
Dropping, adding, modifying products / changing design, quality or performance / consolidating and standardising are all involved in the mix of the product.
Tangibles – shape, colour, size, design, packaging, appearance important
Intangibles – after-sales service, customer care policy, availability of spare parts, guarantees.
“We are optimistic about the prospects for the sector. The UK consumer economy is slowing down, but at present there appears to be no risk of recession. The sector has been suffering from a product gap, but there is a stream of new products now becoming affordable (eg recordable DVDs) and we except to see another surge in demand”.
“There has not been comparable product development in the white goods market, which remains primarily a replacement market, a new fridge, cooker or washing machine is only usually bought when the previous one breaks. One factor that can influence this cycle is the housing market as consumers often like to surround themselves in a new home with new white goods, or are forced to leave fitted applicants behind. There have been some discernible trends within the white goods market, noticeably towards larger American style fridges, bagless vacuum cleaners and latterly towards larger cylinder washing machines that don’t rely upon the traditional belt drive”.
(Quotes taken from Executive Summary Mintel Report)
The products that are basically sold day-to-day in an Electronic store are price sensitive because if the prices fall, customers are going to be attracted more and more but if the price rises a little, the customers will not be interested.
Place
The best, most satisfying product in the world is useless if the customer can't get it when he or she wants it. The second P, Place, represents the combination of all the things that we do to get our product to the target markets. Location of the store is very crucial. Getting the right product to the right customers in the right amount at the right time means convenience for the customer and maximizes profit for the company.
Transport can be a key cost component. Physical goods reach customers through .
Services are usually provided directly from producer to customer and are usually marketed by the same person who is providing the services.
I think the best location for my Electrical Goods business is in Bradford-8 White Abbey Road, because this location can lead to many benefits such as being located on a main road can introduce vast amounts of passing trade, the local community is based around White Abbey Rd, CCTV cameras have also being installed on this road, as you may have noticed the crime figures are also low compared to the Town Centre and direct transportation from buses. Distribution can be brought in direct from the motor ways into town centre and on White Abbey Rd rather than using pipelines, rail, air, sea, containerisation, road haulage, agencies or contract hire.
Price
The third P stands for Price. Price equates to value how much the customers perceive our product to be worth to them. When we set prices, the primary consideration is the value that the customer places on our product's ability to satisfy there needs.
An organisation’s positioning is to some extent limited by its capabilities and resources. The diagram below demonstrates the options a provider may have to position their product. As you will see the model demonstrates that the only viable options are ‘High Price’ ‘High Performance’ or ‘Low Price’ ‘Low Performance’.
Low Price
Price is possibly one of the most important factors in successful marketing. However, most entrepreneurs believe it is important to have the lowest price. This is due to a simplistic view of markets, marketing principles and customer perceptions.
Price is important because it is part of the profit equation:
Factors determining the amount of profit include:
- volume of sales - affected by market growth and competition
LOW PRICE
This strategy I will use to price my products, it is one followed in highly competitive mass markets. It is also the domain of products that have little differentiation. Low price can, however, be used as a tactic; it can open up markets; improve market share; deter competitor intrusion and even damage competition - dependent on who has the larger resources.
Promotion
The fourth P stands for Promotion. Promotion is all the things we do to tell the target markets about the products, price, and place. Promotion is also known as marketing communications.
Changing selling / salesforce organisation / changing advertising or sales promotion / changing PR policy / increasing – decreasing exhibition coverage /
Non-Pricing Strategies
- Non controllable methods – word of mouth / personal recommendations / brand heritage / loyalty
- Controllable methods – carefully directed eg. advertising
The goal of promotion is to provide information that helps prospective customers to buy.
Competitors such as Cash Converters, Empire and Big W promote their products on local broadcasted TV that can be expensive. The way I am going to promote my products are:
- Big and flashy adverts in local newspapers, adverts that are very eye catching – is technique fairly expensive.
- Comical advertising, this will make people listen and enjoy the advertisement being played on local radio stations. This type of promotion will really stain the minds of customers – this can be expensive depending on how long its being broadcasted for and what radio station its been broadcasted from.
