The Significance of Place in the 4 Ps of International Marketing - Essay Example

Every management student and marketing aspirant is familiar with the 4 P’s of international marketing Place, Promotion. Product and Price. These four concepts are essential to make any item sell profitably. Marketing companies usually tend to give ample importance to promote the product through ads and campaigns spending millions of dollars. They give massive discounts to prove their price is the lowest in the market. Similarly, they take herculean efforts to produce high-quality products. These three concepts form the backbone of many successful marketing strategies. But, the fourth P-Place is often overlooked by most marketing experts and businessmen.

Every product should actually be produced, priced, and promoted according to the place it is distributed. The company should decide whether to implement large-scale distribution in the area or selective distribution, based on the economic, social, and cultural influences of the place chosen. A company can choose to distribute a product in a place intensively, selectively, or exclusively. The pricing and promotional budget should be determined based on which type of distribution is selected for a particular place.

The marketing concept changed phase from "make-and-sell" to "sense-and-respond" way back in the past century (Kotler, 2008). Only companies producing exclusive products catering to the needs of people living in certain places thrive. They distribute the products only where there is ample need. For example, consider the ‘Voltas all weather AC’ designed and marketed for people living in deserts exclusively. The AC keeps the room cool during the scorching mid-days and heats the rooms automatically during the biting cold nights. They are much affordable than the room heaters used in western countries and are portable. They can be used even in tents. The product was a great hit and it surpassed several competitors in sales revenues this summer.

Integration of Place and Pricing

The place is directly connected with pricing. Consider Marks and Spencer and Tesco departmental stores. M &S aim in selling branded, high-cost products in all its stores no matter where it is placed. Tesco sells small packets of local products at an affordable cost in rural areas. It sells branded and costly products in its urban stores. This simple place-related pricing helped the company to grow enormously in a short period of time, challenging the decades-old M&S in profits. "Differentiation stems from uniquely creating buyer value" (Porter, 1985, p 150). Tesco did just that. They created a difference by understanding the buyer's value pertaining to the place.

Relationship of Place with Product

Every business firm decides to manufacture a particular product based on the demand for it in a certain area. Only the locals can cater to the needs of the domestic market properly. Consider a company deciding to produce chocolate. The company selects customers from a specific place or locality where it plans to promote it enormously. They find out what the customers feel lacking in the other brand chocolates available in the area and make sure their product has that quality. They promote it as a prominent feature in all their ads. This is known as "eliminating sources of demand variability" (Cooper & Lambert, 2000). Domestic companies would be able to understand the needs and necessities of their market much better than multinational companies. Hence, ‘place’ oriented business thrives worldwide. Here is a global statistic to prove the same.

80 % of the world's trade occurs among the European Union, Japan, and the North American Free Trade Area (NAFTA). Most of these countries trade within themselves. 70% of EU countries trade only among themselves. But their exports are always sent to countries placed outside the EU (Lowe, 2008). This is the best proof for only regional or “place” oriented businesses flourishes worldwide.

Relationship of Place with Promotion

Sales promotion is an important process involving millions of dollars. Every company should gather as much information as possible about its marketing environment before launching the promotional campaign in a particular place. Studying the environmental, social, and economic environment of the community or a  place was chosen to advertise is the first step of any mega marketing campaign (Westwood, 1990).

Studying these concepts based on focus groups will enable any company to gather all the required data in a very short time. The company should select this target group based on their aims and strategies (Hoffmann, 2005). This should cohere with the distribution policy decided for the particular place. Focus groups are essentially made of ten to fifteen people who are considered potential customers for the product. These people will let the company know about the most popular media in the area, the general spending capacity of the masses, the main competitors, etc.  ( Lee, 2002).

The size of the segment customers selected should be versatile enough to ensure the money invested for the research turns profitable and small enough to avoid other competitors taking advantage of these efforts (Habiyaremye, 2011). The qualitative data collected from these focus groups help a lot in studying the pulse of the customers and planning a promotional campaign suitable for the place (Pyle, 2010).