Marketing Mix and Tools: Product, Price, Place, and Promotion - Term Paper Example

? MARKETING MIX & TOOLS Introduction Marketing Mix is among the most basic ideas in marketing. For drawing customers, all companies have to focus on four basic building blocks - Product, Price, Place, and Promotion. A fair grouping of these marketing components is known as Marketing Mix. This marketing mix is the most useful tool for marketing manager and helps in achieving marketing goals. He should employ these four elements of marketing mix in a sensible way to get his marketing goals with respect to volume of sales as well as consumer support. The secret of flourishing marketing is utilizing the suitable means to target the audience. Marketing the business is regarding how one positions it to satisfy the market’s requirements. There are four vital building blocks within marketing of products as well as business. These are known as the four P’s of marketing. Product. The appropriate product to go well with the needs of the target client. Price. The appropriate product sold on the appropriate price. Place. The appropriate product accessible easily on the appropriate price at the appropriate place so the customers can purchase it. Promotion. Updating prospective customers about the “availability of the product, its price and its place” (Tehrani, p. 154). All the four P’s are variable that one manages while forming the marketing mix that will create a centre of attention for potential customers. The marketing mix must be something that gets the complete attention because the accomplishment of business relies on it. As a business executive, one should find out the way to apply these variables for attaining the profit prospective. Product Product means the commodities as well as services offered to the customers. Other than the physical merchandise, there are factors linked with the product that consumers may be paying attention to, for instance, it’s packaging. Additional product aspects incorporate excellence, characteristics, alternatives, facilities, guarantee, as well as brand name. Therefore, the business might imagine what it offers as a “bundle of goods and services” (Tehrani, p. 239). The product’s look, purpose, and support comprise what the customer is in fact purchasing. Successful executives keep a close eye on the needs their product bundles offer to consumers. The product bundle must go well with the requirements of a specific target market. For instance, a lavish product must generate simply the accurate image for consumers who posses everything, whereas a number of essential products are required to be positioned for price sensitive buyers. Some additional main features of product take account of a suitable product range, “design, warranties, or a brand name” (Tehrani, p. 241). Through study of consumer preferences is a most important component in creating a successful marketing mix. Understanding of target market as well as competitors will let businesses to present a product that will attract customers and circumvent expensive blunders. If a business is are thinking about launching a new product, then it should ensure that the product bundle will fit its strengths as well as weaknesses, and that it will offer a tolerable “risk/return trade-off” (Tehrani, p. 278). Such as, if the business is extremely good in well-timed reaction to customers’ queries, then appropriate service must be a significant factor of the product bundle. One should think in long-term perspective regarding the venture by considering the ways by which product bundle can be intensify as well as expand, such as, one may be capable of taking benefit from prospects to ‘add value’ by “processing, packaging, and customer service” (Tehrani, p. 266). Other potential development may let business to present the product to various customers. New ventures are successful for the most part when they target their hard work on single product or single market, such as an eatery or an automobile service station does. Afterwards, development may take place in the similar spot or may be within various geographic areas. A changed form of development would be an expansion of products, with the business providing associated goods. Presenting a complete collection of products is mainly successful if the unprocessed resources, production procedures, as well as allocation systems are alike, which indicates that business does not have to purchase new suppliers, expertise and tools, as well as allocation techniques. In general, a product can be divided into three fundamental levels. The first level is mostly known as the core product, what the customer in fact purchases with respect to advantages. For instance, customers do not simply purchase 4-wheel drives. Instead, customers acquire the advantage that 4-whell drive provides, such as being able to drive on bumpy or uneven roads. Second level is the actual product, which is developed around the core product. The actual product incorporates the trade name, characteristics, packaging style, different components, and styling. These factors offered the gains to customers that they try to find in the first level. The third level of the product is the improved component. The improved component takes account of further facilities as well as gains that encircle the initial two levels of the product. Examples of improved product components include technological support for handling the product as well as service contracts. Products are categorized by how long they can be used, their sturdiness as well as their tangibility. Products that can be used repetitively during an extensive period are known as sturdy products. For instance, sturdy products take account of cars, furnishings, and residences. Price Price indicates the amount business charges for the product or service. Selecting the price of the product can be complicated as well as terrifying. A number of small business proprietors think they should entirely have the least possible price around. As a result, they start their business by generating a thought of ‘bargain pricing’. On the other hand, this may be an indication of cheap value and not part of the image business would like to represent. The pricing policy must reveal the suitable placement of the product within the marketplace and affect a price that includes the cost for each item and incorporates a profit margin. The outcome should neither be insatiable nor apprehensive. The first one will “price you out of the market” (Blattberg et al, p. 8); extremely low pricing will make it impracticable to develop. Manager is responsible to pursue some substitute pricing policies. Following are eight general pricing policies. A number of price judgments may take account of difficult computation methods, whereas others are spontaneous opinions. The product, customer requirement, the aggressive atmosphere and the other products offered must support choice of a pricing policy. Value-based: Based on the consumer’s insight of value instead of the costs. The consumer’s insight relies on every feature of the product, together with non-price aspects, for instance, value, beneficial aspects, and reputation. Cost-plus: It includes a fixed fraction of revenue above the expenditure of creating a product. Precisely, considering fixed as well as variable costs is a significant component of this pricing technique. Going-rate: A price charged that is the “common or going-rate in the marketplace” (Kerin & O’Regan, p. 92). Going-rate pricing is regular within markets where the majority of companies have slight or no power on the market price. Aggressive: Supported by prices set by rivals for competing products. This pricing method is comparatively easy to pursue because the company keeps its price in relation to its rivals’ prices. In a number of instances, business can simply study its rivals’ prices and act in response to every price modification. In other cases, consumers will choose sellers via bids submitted at the same time. Here data collection will be additionally complicated. Discount: It indicates a decline in the publicized price; “a coupon is an example of a discounted price” (Kerin & O’Regan, p. 102). Skimming: It incorporates the launch of a product on a high price for well-off customers. Afterwards, the price is dropped, as the market turns ‘saturated’. Emotional: It involves setting a price that seems lesser as well as better, such as $9.99 per item instead of $10 per item. Loss-leader: It involves selling a product on a price lesser than the manufacturing cost to create a centre of attention for consumers at the shop. Whatever the price may be, in the end it should cover the costs, chip in to company’s reputation by conveying the apparent value of product, contradict the rival’s offer, and circumvent “deadly price wars” (Kerin & O’Regan, p. 122). It should be remembered that price is the single ‘P’ that produces income, whereas the remaining three P’s “incur costs” (Kerin & O’Regan, p. 122). Efficient pricing is vital for the success of the business. Pricing goals are recognized as a division of company’s general objectives. As a part of the general business objectives, pricing targets are mostly in one of the following four types: (1) productivity, (2) quantity, (3) getting along the rivalry, and (4) reputation. Productivity pricing targets indicate that the company concentrates largely on taking full advantage of its revenue. In productivity targets, a company raises its prices with the intention that added income equals the raise in product creation expenditure. By means of quantity pricing targets, a company plans to make the most of sales size in a given particular profit margin. The concentration of quantity pricing targets is on rising sales instead of on an urgent raise in revenue. Getting along with the price level of rivals is an additional pricing approach. With a ‘getting along with competition’ pricing approach, the concentration is not on price but on non-price struggle points, for instance, position as well as service. With reputation pricing, products are highly priced and customers acquire them as “status symbols” (Kerin & O’Regan, p. 176). Place It indicates the distribution channels utilized to get the product to consumers. What the product is will significantly control the way it is distributed. If, for instance, a person owns a small retail shop, then he is in the last part of the distribution chain, and so he will be directly selling to the consumer. Companies that produce or assemble goods will have two alternatives: (1) directly selling to customers or (2) selling to a retailer. As a manufacturer, the company should choose if supplying directly is suitable for your product, “whether it is sales through retail, door-to-door, mail order, e-commerce, on-site, or some other method” (Kerin & O’Regan, p. 184). A benefit of direct sales would be the contact business gets by meeting consumers in person. With this sort of contact, company can simply identify market changes that take place and become accustomed to them. Company can as well have absolute power on its product range, the way it is sold, and its price. Direct sales can be an excellent place to begin when the “supply of product is restricted or seasonal” (Kotler, p. 192). Such as, the direct sales for a number of home- made goods can take place by means of “home-based sales, markets, and stands” (Kotler, p. 192). On the other hand, direct sales involve an efficient retail interface with the consumers, which may be “in-person or electronic” (Kotler, p. 203). If creating and keeping this retail interface is not relevant to a particular business, then it should think about selling via an agent. The basis for selling via an agent is easy access to consumers. During a number of circumstances, traders as well as retailers have consumer links that would not be feasible to acquire by the company on its own. Nonetheless, in selling to a reseller, the company may lose connection with its end customer. In a number of instances, company may as well lose a little of its individuality. For instance, the distributor may demand that product be traded with the trade name of reseller. One aspect that may control whether the company can locate an agent to take care of product is ‘production flow’. Traders would like to have a secure supply of goods to distribute through whole year. If the company can provide a fixed continual supply that is of reliable value, then selling via an agent can be an excellent policy for that company. “Channels of distribution operate by one of two methods: conventional distribution or a vertical marketing system. In the conventional distribution channel, there can be one or more independent product manufacturers, wholesalers, and retailers in a channel. The vertical marketing system requires that producers, wholesalers, and retailers to work together to avoid channel conflicts” (Kotler, p. 231). “How manufacturers store, handle, and move products to customers at the right time and at the right place is referred to as physical distribution. In considering physical distribution, manufacturers need to review issues such as distribution objectives, product transportation, and product warehousing. Choosing the mode of transportation requires an understanding of each possible method: rail, truck, water, pipeline, and air. Rail transportation is typically used to ship farm products, minerals, sand, chemicals, and automobiles. Truck transportation is most suitable for transporting clothing, food, books, computers, and paper goods. Water transportation is good for oil, grain, sand, gravel, metallic ores, coal, and other heavy items. Pipeline transportation is best when shipping products such as oil or chemicals; particularly, air transport works best when moving technical instruments, perishable products, and important documents” (Kotler, p. 236). “Another issue of concern to manufacturers is the level of product distribution. Normally manufacturers select from one of three levels of distribution: intensive, selective, or exclusive. Intensive distribution occurs when manufacturers distribute products through all wholesalers or retailers that want to offer their products. Selective distribution occurs when manufacturers distribute products through a limited, select number of wholesalers and retailers” (Kotler, p. 241). In restricted distribution, only one trader or retailer is permitted to sell the product within a particular geographic region. Promotion It indicates towards the publicity as well as selling portion of marketing. It is the way company let people identify what it has for sale. The reason of promotion is to get individuals to recognize what the product is, “what they can use it for, and why they should want it” (Kotler, p. 281). Company wants the consumers who are trying to find a product to realize that its product is exactly according to their needs. In addition, to be successful, the promotional activities must include an apparent message aimed at a particular set of people reached by means of a suitable channel. The target customer will be the individuals who utilize or control the acquisition of the product. The company must concentrate the market research activities for recognizing these ‘individuals’. The communication should be constant with the entire marketing reputation, get the target customers’ awareness, and obtain the reaction that company would like to have, whether it is to buy its product or to create a view. The channel selected by the company for message delivery, will possibly entails application of a small number of important marketing channels. Promotion may incorporate publicity, “public relations, personal selling, and sales promotions” (Kotler, p. 290). A vital channel is advertising. Advertising techniques to promote the product or service take account of a number of significant factors. Radio advertisements are comparatively economical method to update prospective neighbouring consumers regarding the business. TV gives access to local or nationwide customers, although, it might be more costly as compared to other alternatives. ‘Direct mail’ as well as ‘printed materials’, together with tabloids, user as well as trade periodicals, circulars, and an emblem, let the company describes “what, when, where, and why people should buy from it” (Kotler, p. 301). The company can post notes, brochures, competitions, vouchers, and catalogues directly to fresh or old clients on neighbouring, provincial, or state levels. Website of the company offer helpful facts to concerned customers as well as users. Password-protected pages let users to interrelate with the company more personally. Advertisements let extensive promotion of the products. Getting in touch via direct email is feasible if the company have gathered comprehensive consumer data. “Word of mouth depends on satisfied customers (or dissatisfied customers) telling their acquaintances about the effectiveness of your products” (Kotler, p. 304). Generic promotion takes place when no particular trade name of product is promoted, but instead an entire industry is promoted. Such as, generic advertising is generally done for milk and beef. Public relations (PR) generally concentrate on developing a constructive business reputation. Significant factors of a fine public relations plan take account of being an excellent national, “being involved in the community, and providing open house days” (Parente, p. 65). Reports, mostly started by bulletins, can be an excellent source of promotion. Personal selling concentrates on the responsibility of a seller within the communication policies. Seller can modify communication for consumers and are extremely significant in creating long lasting links. Despite the fact that personal selling is a vital means, it is expensive. Therefore, the company must take some steps to aim at personal selling with awareness. Sales promotions are unique offers made to persuade acquisitions. Promotions might take account of complimentary samples, tickets, competitions, inducements, loyalty plans, rewards, as well as discounts. Other plans might concentrate on enlightening the consumers by means of discussion groups or approaching them via trade shows. The target customer may be additionally open to one method than some other. Further sources of promotion may be going to or taking part in trade shows, visible and clear displays in public gatherings, and networking publicly at local as well as business organizations. Conclusion The four P’s of marketing mix - product, price, place, and promotion - must cooperate with each other within the marketing mix; mostly, “decisions on one element will influence the choices available in others” (Chernev, p. 51). Choosing a successful mix for the market will require time as well as hard work, however, these will reimburse once the customers are satisfied and lucrative business is created. Once the company have a suitable marketing mix- the appropriate product on the appropriate price, provided at the appropriate place and promoted with the appropriate means - the company will have to be persistent to stay ahead of market alterations and modify its marketing mix whenever needed; marketing is that component of the business that go on and on. Works Cited Blattberg, R. C. Getz, G., and Thomas, J. S. The Marketing Mix. Boston: Harvard Business School Press, 2009. Chernev, A. Strategic Marketing Analysis. Rowlett: Brightstar Media, 2007. Kerin, R. A. and O’Regan, R. Marketing Mix Decisions: New Perspectives and Practices. New York: American Marketing Association, 2008. Kotler, P. Kotler on Marketing. New York: Free Press, 2001. Parente, D. Advertising Campaign Strategy: A Guide to Marketing Communication Plans. Kansas: South-Western College Pub, 2005. Tehrani, N. Contemporary Marketing Mix for the Digital Era. New York: AuthorHouse, 2008. Read More