Marketing Mix - 4 P
Introduction
The marketing strategies are the actions that are undertaken to achieve the marketing objectives through the marketing mix.The marketing mix refers to the 4Pís of marketing- product, price, promotion, placement (distribution). The small business owner has control over these elements.The product life cycle plays and important role in marketing. Depending on which stage the product is at in its lifecycle will determine which element of the 4Pís will have the most emphasis. If the product is just being introduced, a different marketing strategy will be required compared to if it was in its decline stage
Product
The product is a combination of:

  • Quality
  • Design
  • Name
  • Warranty and guarantee
  • Packaging
  • Labeling
  • Exclusive features
  • Customer service is important at this stage. Ongoing customer service, especially for complex and expensive products, is crucial for maintaining a strong customer relationship.The packaging is also important. It helps to promote the product and encourage first-time buyers to purchase it.

    Price
    If the price is too high, it could lead to lost sales (unless superior customer service is offered). If price is too low, it could give the impression of a Ďcheap and nastyí product.Four methods of calculating prices,

  • 1. Cost plus margin- calculating total cost of production plus adding a percentage (margin) for profit
  • 2. Market price- pricing according to the interaction between quantity the customers are willing to purchase and the quantity that producers are willing to supply. Shortage of product= high price, surplus of product= low price
  • 3. Competitors price- price thatís either below, equal to or above competitors
  • 4. Discount price- reducing the price to stimulate demand
  • Promotion
    A promotion strategy details the methods that a business uses to inform, persuade and remind customers about its products. The 4 main forms of promotion are:

  • 1. Personal Selling- sales assistant outlines the features of the good or service to the customer. (discuss advantages and disadvantages of this)
  • 2. Sales promotion- activities and materials used to attract interest and support for the good or service. Eg free samples, coupons with cash refunds, loyalty programs
  • 3. Publicity- the business sets up a free news story about the product. The aim is to enhance the image of the product and the business
  • 4. Advertising- print or electronic mass media used to communicate a message about the product.
  • The internet, use of E-commerce, online chat rooms, etc have also proven to be successful in the promotion of products.

    Price
    Where is the product going to be distributed? The business owner needs to decide how to transport and store the finished products. They also must decide on how many intermediaries (middle agents) to involve in the distribution of the product (eg wholesalers and retailers). Distribution can be exclusive or as wide as possible.

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