4 Ps (pace, price, promotion, production) analysis - Research Paper Example

Marketing 20 February 4 Ps (Placement, Price, Promotion, Production) Analysis The four aspects are the commonly known components of marketing, which the management in companies has to carefully control, whether under pressure of internal or external constraints of the marketing environment. They need to be approached differently to come up with the right decision to implement and enforce customer relationship with the company, simply because they are essential determinants of how the potential customers get to view the company and its products or services. Remember, a wrong approximation of just one aspect can cost the company dearly. Pricing: Different people have different purchasing powers; while some are low income earners, others have high income and their spending is also high. All these customers have one thing in common; they get to determine the price of a commodity being charged based on their perceived value. Therefore, any business should consider the purchasing powers of the people it sells to in the society. McDonald’s China took the opportunity of using the tier pricing model as of 2007, to sell its products at a range of prices (adjusted to consumer index and income level among other costs in the partitioned areas) to its potential consumers, who had varying purchasing powers (Ko, 4). The price given for a commodity should also be considered; it is not always that lowering prices could generate profits. In fact, some consumers could feel as if the quality is being compromised. Again, high prices could push consumers to other alternative solutions. By 2008, McDonald China among other fast food companies had raised products costs to cover for the material costs harmoniously (Ko 4). The strategy was reasonable since it was done in union; hence no company was getting a competitive advantage over the other. Deciding on a product price should consider competitors price among other factors. Similarly, pricing should make room for customer discounts, especially while targeting a specific market. According to Ko, McDonald employed the plan by offering coupons to customers who shopped for their products online via Taobao. Com, as an encouragement to place food orders online (3). Product: The creation of the product is always under scrutiny from the consumer’s side; before being produced, the consumers’ preference and needs should be researched. Each age, group, or culture could want something different from the other, and it has to be considered. While others want their cultures to be incorporated, others want a totally different feel. At one point McDonald’s fantastic rice burger was not appealing to mainland Chinese consumers, even if the rice was their staple food (Ko 3). Assuming they had ventured fully without the test, it could have cost them heavily. Unlike KFC, McDonald and Burger King had experienced low returns initially, because their products were made of beef instead of chicken, which was well accepted and suited to the Chinese (Ko 9). With time the wants or preferences change, and the company has to adjust with the changes. Today, some Chinese prefer alternative food instead of their locals, hence McDonald use the opportunity to create and offer the western brand , for example beef burgers alongside chicken burgers, hence giving the people a choice. The product name (such as McDonald), trademark, and the unique brand have to differentiate it from the competitors and market itself within the society. Another important factor is the packaging for consumer familiarity, quantity, and quality to be worth the price. Promotion: It covers all types of the marketing communication, from TVs, Radio, internet, shows, posters, and the press to conduct advertisements. Most of this advertising comes with a cost for airing the information to the society, but there are other cheaper modes of marketing communication. One basic, though expensive strategy that McDonald Company did upon entry in China was to seek a partnership through joint ventures with local companies. The association familiarized the company with China’s culture and promoted its products easily. Through the numerous alliances, like Sinopec petrol retailer, Taobao.Com, and the delivery services, McDonald was reaching out to the different and numerous people to purchase more of their products. The offered coupons were a form of promotion to make the Chinese consumers form a habit of repeated buying from any of the outlets. The timing of promotions also determines the return to the business. Some work best with seasonality, events, and age groups. During the 2008 Beijing Olympic Games, McDonald’s marketing campaign was on the forefront demonstrating its great commitment to serve the people of china and the entire world; as a fast food company, the nationalism appeal advertised the company and its product in the right time. Promotions could also be used when a company intends to introduce another product in the market, meaning that when people like the product, then it can be launched and sold in the market. In the case of the rice burger, McDonald used it as a promotional product in mainland china and never got to exceed that point (Ko 3). It ought to seek people’s attention, generate interest, and then get them to want it sold. Promotions can also be on point of sale display, exhibitions (a good method in partnerships), sales promotions, and telemarketing in this age of modern technology and social media among others. The main aim is to move the audience towards an action; it could be to buy the item on the menu, recommend a choice to their friends, and make a visit to the location among others (“The marketing process,” businesscasestudies.co.uk).Through promotions, people are made aware of the product’s quality and prices, receive information, and get to know its benefits. Placement: It entails all the distribution activities and location to access the product or service. The business has to be located on a suitable location for consumers to access products easily. When a business is beginning, it would be better to study the competitors market, identify the loopholes, and decide where to locate the business and how to make sure it reaches the consumer. McDonald’s first venture in Chinese market in 1990 targeted Shenzhen, a location where its rival company KFC had not ventured into; hence a good opportunity to realize a big share of consumers resulting in high returns (Ko 7). Often, you will find most of such fast food restaurants in urban areas and not in rural locations. In the urban areas, they can be also placed along the busy streets or near highly populated institutions (universities, schools or near companies). Online directories also assist companies to avail their products to consumers; the customers then get to order for the products or services before accessing them. The Taobao.Com site was used as ideal site for the Chinese online shoppers to place their orders. Apart from location, the distribution activities also include delivery services at orders from specific outlets to consumer locations. According to Ko, in 2008 McDonald introduced home delivery service to 42 of its outlets from Shanghai, and by mid 2007, most of the McDonald’s restaurants were operating 24 hours per day (3). Before deciding on these plans, it had to restructure its distribution activities, after considering competitors’ move. The turnaround was profitable for the company and has been reaching out to thousands of people everyday. Works Cited Ko, S. “McDonald’s: Is China Lovin’it.” espol.edu.ec. 2012. Web. 20, February, 2013. “The Marketing Process.” businesscasestudies.co.uk. 2013. Web. 20 February, 2013. Read More