Marketing Mix
Essay Preview: Marketing Mix
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The 4Ps and the marketing mix
The 4Ps are the ideas to consider when marketing a product. They form the basis of the marketing mix. Getting this mix right is critical in order to successfully market a product. The 4Ps are:
1. Product
2. Price
3. Promotion
4. Place
If market research is carried out effectively, a company can plan a promotion for the right product, at the right price, and to get it to their chosen market, in the right place.
Now look at the 4Ps in more detail.
Product
A product can be either a good or a service that is sold either to a commercial customer or an end consumer. A customer buys a product, and a consumer uses it. Sometimes these are one and the same, as an industrial firm can also be a customer and a consumer. For example, British Airways might buy aeroplanes from British Aerospace, so it is a customer. It wont sell on the planes to another buyer, as BA needs the planes to provide its service, so it is also a consumer. Sometimes a wide product range covers both (Mercedes produce lorries for haulage companies, and cars for domestic use).
More commonly, there will be a number of sellers forming a chain of distribution. For example, a gold mine may sell gold to a jewelery manufacturer, who in turn will sell on rings to wholesalers and retailers, before we get to buy them in the high street. Each is a customer, but only the final user is the end consumer. A marketing manager will identify who his/her target market is, what they want, and sell it to them at each stage in the chain.
Price
No matter how good the product is, it is unlikely to succeed unless the price is right. This does not just mean being cheaper than competitors. Most people associate a higher price with quality, so you would expect to pay more for a Rolls Royce than for a Lada. On the other hand, is one cola worth more than another, and if so, how much?
As a rule, a producer of luxury or medical products will use skim pricing or premium pricing initially, in order to maximize its profits. This is useful, as it helps them to recover expensive research and development costs quickly.
For fast moving consumable goods (fmcgs) like colas, penetration pricing is usually used. The firm will want a large share of the market, so will settle for a small profit on each item. In the long term, they hope that the turnover,