The first of the four ps I will speak about is price. There are many pricing strategies a business can use, which I will go through now:
Market led pricing: a firm will use market led pricing if the price of the product helps decide whether consumers will buy.
Penetration pricing- this is where a firm charges a very low price when this product iis new to get people interested in the product. When this price is below cost it is called loss leader. Once the product is established then the firm will increase the price of the product.
Skimming- this is the opposite of penetration pricing. Firms charge a high price to begin with and this helps to create interest in the product. When the product is established then the rice is lowered and it becomes a mass-market product.
Destroyer pricing - also known as predatory pricing. This is where firms charge prices that they know are unprofitable for their competitors and themselves. When the rivals are driven out of the market the firms increase their product.
Price discrimination- this is where firms charge different prices to different consumers for the same product.
Competition pricing- this is where firms have to charge similar prices to their competitors. It happens when there is a lot of choice but not much product differentiation-like petrol.
Cost plus pricing: firms will use this method if they are not in price competition with their competitors
The cost of the product plus the percentage mark-up - So if a product cost £2 and you want a 25%mark-up, you will sell it for £2 + (2 x 25%) = £2.50.
Cost of product plus profit margin- so if a product cost £2 and you want a 20% profit margin, you will sell it for £2.50.
In my business I will use competition pricing since there will be many other business selling clothes so I will have to charge similar to them, other wise if I were to charge higher people would not but from me and if I charged lower then I would make any profit at all. Since there is a large demand for clothes I should by charging similar to my competitors still make a profit.
The next of the four ps I will speak about is product and the product mix; the product mix is the number of individual products produced or sold by an organization. The mix is defined by the industry and manufacturing environment, and management strategies that position the company as a specialty, niche or broad-based supplier of goods and services. Instances where the product mix varies widely from period to period often requires more investment in facilities and inventory, and may result in lower levels of customer service.
The next concept I will speak about is place. I will first talk about the channel of distribution, this is how businesses get their goods to the customer, some may be simple and sell form the manufacturer to the customer like a farmer selling at the market, but some are more complicated and involve more people. e.g. from a manufacturer via a wholesaler to a customer, or from a manufacturer via a wholesaler and a retailer to the customer or just from a manufacturer via the retailer to the customer. As more people are involved in the channel of distribution the higher the price for the item as each person involved will be wanting to make a profit so they charge more to who their selling to, this means eventually the customer will have to pay more since he is at the end of the line.
In my business I will have to use a wholesaler as it is to hard to get my clothes straight from the manufacturer and it is too expensive to use a retailer. This will mean I will be able to get my supplies without having to pay to much money for them so I will be able to make a profit.
The final aspect of the marketing mix I will speak about is promotion. In my business I will use a couple of things to promote my business, I will put up an add in the local newspaper, as well as that I will put up an advertisement at the entrance of the mall where my shop is located. This is sure to grab the attention of my target audience.
The reason I will be putting up an advertisement at the front of the mall is because since I am aiming to target customers who are living local and usually shop at the mall, so placing an advertisement at the entrance of the mall is the perfect way of advertising. I will also put up advertisement by my shop to catch the audiences attention, since many people who may not at the time be looking to shop in my store will walk past the advertisement and it will stay in their mind so at a later date when they or someone they know wants clothes or equipment they want, they will come to my shop. The disadvantages of having a poster in the mall and outside it, is that it wont be seen by people who depend more on the internet, or internet shoppers, they find all their supplies on the internet and will not see my shop, even so I still thin this is the most cost effective way of promoting my business.
