The marketing mix

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THE FOUR P’S

The 4 P’s in Marketing

The four P’s in marketing are Product, Price, Promotion and Place (Distribution).

 

Marketing mix

The marketing mix provides us with a useful way of looking at the marketing of products. Businesses will need to create a successful mix including the right product or service, to sell it in the right place, at the right price and using the most suitable form of promotion.  All successful businesses follow the four P’s format and Converse is a good example of a company that successfully uses this marketing strategy.

We already know that the simple mix is often referred to as the four P’s of product, promotion, price and place.  This is a very easy way of looking at what has become a very difficult business environment and has at times been felt too simplistic and restrictive in terms of the real mix and what should be the fullness of our understanding. In recent times, therefore, it has been expanded to include three more P’s with the additional elements of people, provision of customer service and process management.

People

People have been known as the greatest advantage of a modern business. The main thing is that everybody who works for my business is a customer, either the internal or external customers. Both sets of customers expect to be supplied with the service they need if it’s on time or specified. This principle holds well for everyone in the company, whatever their level of skill and experience, whether what they do is answer a telephone or mastermind a key new project. It works to everyone’s benefit. In doing so it provides the individual with genuine responsibility and scope for initiative and it guarantees that my businesses performance will be much better

Provision of customer service

The Customer service has become very important in a swiftly changing market place. It has been linked more with the centre product. Customer service is connected with developing a bond with my customers in order to create long-term relationships that lead to advantages for all groups. It does not just happen. It is a process which involves pre transaction, transaction and post transaction considerations. importance upon customer service will change from one product to another.

Process management

This will involve all of the procedures, tasks, mechanisms and activities through which my service will be given to the customers. In my business the processes are a key part of the marketing mix, concerning on initial priorities and ways of meeting customer need. A process involves key decisions about the customer involvement and employee judgment. In today’s quickly changing business environment, in order to meet consumer needs more closely, it is marketing that should determine the processes that link manufacturing with the customer. The marketing mix is therefore a series of controllable variables that I can use in order to best meet the customer needs and ensure that an organisation is successful in the markets in which it serves.

The four P’s

Price:

  • Allowances and deals
  • Distribution and retailer mark-ups

Product:

  • Packaging
  • Brands
  • Service
  • Quality

Promotion:

  • Advertising
  • Sales promotion
  • Personal selling
  • Publicity

Place:

  • Channels of distribution
  • Outlet location
  • Sales territories
  • Warehousing system

Price

Price will be the only element of the marketing mix that will directly generate me income, other elements of the marketing mix are costs. The importance of price in the marketing mix varies. In the fashion markets, such as clothing and shoes, the one I am going to try break into, it is not that important. My service will be designed to suit a particular segment while others perform a precise purpose regardless of price. For consumers with limited budgets, price is a key purchasing criterion, while for those whom money is no object is less important. This is good for me because I have a big budget available at which is not at a precise figure.

My first pricing task is to create an overall pricing goal for my business which is in line with my marketing strategy, and then determine objectives for each of the product lines. The price charged for a service/product is associated with a given level of sales.

A good way to express customer sensitivity to price changes is through a measure known as price elasticity of demand. This is the measure of how much quantities purchased will alter in response to given price changes. Demand is said to be elastic if the change in quantity demanded is of a greater proportion than the change in price that initiated it.

If the price of a converse trainer fell by 10% and there was an increase in sales of 20% the demand for the product would be said to be elastic, the changes in price led to more than proportionate response in quantity demanded.

When a relative change in the quantity sold is less than the relative change in price, demand is said to be inelastic. For example if a price increase of 10 percent results in a 5 percent fall in sales price elasticity will be -0.5. Price elasticities vary with the level of competition. The more competition in the market, the more likely it is that the demand for a product/service will be elastic. Price elasticity also varies during the product life-cycle. In the early days, when there is little competition, price inelasticity will be the rule within a sensible price range. However as products mature elasticity will increase in the competitive price range.

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target profit or return on capital employed, prices fair to firm and customers, prices similar to those of competitors, stable prices,

Penetration pricing

Penetration pricing is appropriate when the seller knows that demand is likely to be elastic. A low price is therefore required to attract consumers to the product. Penetration pricing is normally associated with the launch of a new product/service for which the market needs to be penetrated. Because the price will start low the product/service will initially make a small loss until the consumer awareness is increased.

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