4 Ps of Marketing - Coursework Example

4 P’s of Marketing Marketing Mix Marketing mix is one of the business tools used in marketing for determining the four P’s i.e. Price, Promotion, Product and Place. The marketing mix provides a set of policies based on these four P’s which have an impact on a customer’s purchasing decision. It describes different types of choices made by the organizations in their whole process of bringing any product/service in the market. Four P’s involved in the marketing mix gives the best possible way of describing all the important elements of marketing. The reason behind the success of a business includes a long process where the achievement of success depends on the marketing. The success associated with the marketing process depends upon various marketing strategies and these marketing strategies deal with 4 P’s of marketing. Thus, the implementation of marketing strategies in an appropriate manner is very important in order to achieve success by an organization. In other words, the marketing mix is the combination of all the marketing plans made by an organization (Belohlavek, 2008). Each of these four P’s is very important factors for an organization in order to create such marketing mix which will easily attract customers towards the organization. It helps in determining the profit potential of an organization. Product Product means the goods/services which are offered to the customers by an organization. Apart from the offering of the physical product, there are various other elements associated with the product which helps in attracting the customers. It can be the packaging of the product, any additional feature in the product etc. In case of service product it is the quality of services, the facilities provided to the customers, etc which help to attract the customers towards the organization. The product/service attributes which help an organization to achieve competitive advantage include features, options, quality, warranty, services and the brand name (Masterson and Pickton, 2010; Hobbs, 2011). The product bundle must be made based on the needs of a target market segment. Let us take an example- In case of the luxury products like jewellery, accessories, etc; it is very important to create the right image for the affluent customers. In a similar way, basic products which are used regularly should be positioned targeting the price conscious customers. Some of the important aspects associated with the products are design, warranties, brand name, product range, etc. Customer research is one of the key elements while creating an effective marketing mix. The organization’s knowledge about the needs and demands of the target market as well as about the competitors will help it to offer the product that will be appealing to the customers and will avoid various mistakes. Addition of a new product in the business always includes an acceptable amount of risk/return exchange. For example- If the company is very good, with a high brand name, then providing services on time is the most important part of the product bundle. The businesses offering almost whole range of products are most successful if the production process, raw materials and the distribution methods are similar. It implies that these businesses will not require new skills, suppliers, equipments and distribution methods for carrying on its business activities. Price Price is one of the most important elements of the marketing mix because the pricing strategies of an organization always have an impact on the demand, sales, the competitive strength and also the profit of an organization (Czinkota and Ronkainen, 2007). A wrong pricing decision can cause harm to an organization by affecting its efficiency or other functional areas. The pricing strategy should always be made very carefully. There are some pricing objectives which are considered while planning for an effective pricing strategy. They are price stability, improvement in the market share condition, profit maximization, etc. Price can be explained as the exchange value for any product/service by means of monetary transactions. The pricing approach of an organization should always reflect the exact position of its product in the market. It should result in the price which will be able to cover the cost per item and also include a certain profit margin. An organization can follow alternative pricing strategies based on different situations. There are eight pricing strategies. Some of the pricing decisions involve high and complex calculations. The selection of pricing strategy for an organization should be based on the customer demand, product and competitive environment. The different types of pricing strategies are: Cost Plus: This type of pricing strategy adds a particular percentage of profit above the actual cost of production of the product. Assessing the fixed and variable cost is very important while determining the pricing method. Value based: This pricing strategy is based on the perception of the buyer associated with the value (rather than that of cost). The perception of the buyers generally involves all the important aspects of the product including prestige, quality, etc. Competitive: This pricing strategy is based on the prices that are charged by the competitors for the products in the market. This type of pricing structure is very simple to be followed because it helps in maintaining the price relative to the prices of the products of the competitors. In some cases, organizations directly observe their competitors prices and then respond to the price changes. In some other cases, the customers select the vendors based on the bids submitted simultaneously. Going rate: This is the pricing strategy where price is charged based on the going rate of market place. Going rate pricing is very common in those markets where the companies have no control or very little control over the market price. Skimming: This pricing strategy involves introducing a product at a high price for targeting the affluent customers. Afterwards, the price gets decreased as soon as the market becomes saturated. Discount: This pricing strategy is based on the decrease in the advertised price of a product. An example of discounted price is the coupon. Loss leader: This pricing strategy is based on selling the products at a price lower than the production cost for attracting customers to the organization for buying other products. Psychological: This pricing strategy is based on a price which looks better or attractive. The pricing strategy determines the amount of money that an organization will receive by delivering its products to the customers. Promotion Promotion is the attempt made by an organization for stimulating the product’s demand in the target market without bringing any kind of change in the channels of distribution, product mix and the pricing strategy. It involves immense effort made by the marketers for providing adequate knowledge to the customers in order to persuade or influence them to buy its products (Kumar, n. d.). Persuasive communication is the most important factor while determining the promotional activity. The promotional objectives are determining product’s demand, providing proper information about the product to the customers and the market intermediaries, making the other elements in the marketing mix much more meaningful. The main elements present in the promotional activity are personal selling, sales promotion, advertising, direct marketing and publicity. In order to have an effective promotional strategy, the promotional efforts should always contain a clear message for the targeted audience by means of an appropriate channel. The target audience of an organization are those customers who purchase its products or can be influenced easily in purchasing its products. The organization should focus on making market research efforts for the identification of these individuals. The message should be in consistency with the overall marketing image, it should be able to get attention of the target audience. The channel that is selected for spreading the message should always involve the use of some key marketing channels. One of the key channels is advertising. It is an important element of the promotional mix and acts as the best medium in the communication of an organization with its customers (Tyagi and Kumar, 2004). In recent days, it has become tough for the marketers to get in touch with the right customers whose requirements will match with the product offerings made by them. In such case, the availability of wide range of media including Radio, TV, Magazines and lastly Internet or Electronic sources have helped in making the individuals aware of the products or services offered by the organizations. This method is used for the purpose of promoting the products or services including the following: Radio: Advertisements by means of radio are inexpensive ways of informing the potential customers about the organization, its business and the products or services. Television: Advertisements by means of television helps in providing information to the regional as well as the national audiences. It is an expensive means of advertisement as compared to other options. Print: Advertisements by means of direct mails and different types of printed materials help in explaining what, where, when and why should the customers buy from a particular organization. Various forms of print advertisements are newspapers, trade or consumer magazines, flyers, etc. A company can also send direct letters, brochures, fact sheets etc to the old or new customers in regional and local regions. Electronic: The company websites provide helpful information to the potential and interested customers (Baker, 2012). The password protected areas allow the users to interact more easily and seek more information about the companies. Advertisements by means of company websites allow wide promotion of products. Direct email contact is also possible for providing detailed information to the customers. Word of mouth: Word of mouth generally depends on the satisfied customers who share their experiences about using the product. Generic: Generic promotions generally occur when promotion of any specific brand does not take place. In this kind of promotional activity, advertisement of an entire industry takes place. Generic advertisements generally take place for advertising products like beef, pork, milk etc. Public relations: Public Relations focus on the creation of favourable business image. It is the practise of spreading information between the organization and its customers. It may involve the achievement of publicity by an organization from its audience by using various topics of public interest or other news items which does not need direct payment. The aim of this promotional strategy is persuading the investors, general public, employees, partners and remaining stakeholders to retain a specific point of view about its leadership, products etc. Personal selling: The personal selling involves the role of the salesperson in a specific communication plan. Salesperson has the ability of influencing the customers in purchasing the products of any organization. The sales person promotes the products through his/her appearance, attitude, product knowledge, etc (Anderson and Dubinsky, 2004; Havaldar, 2005; Lamb, Hair and McDaniel, 2011). Personal selling helps in building strong relationship with the customers. It is a promotional activity involving high costs. Generally products with complex features or high prices are promoted and sold using personal selling. Sales promotion: This type of promotional strategy involves special offering designed by the organizations for encouraging the purchase (Paul, 2008). It includes coupons, incentives, free samples, prizes, loyalty programs, rebates, etc. Other programs focus on informing as well as educating the potential customers through tradeshows or seminars. Place Place determines the location of the products or service offerings made by the organizations (Worsam, 2003). The purchasing decision of a customer is often influenced by the efficacy with which the products or services are placed in the market. Place also means distribution channels used in providing products to the customers. A company can sell its products directly to the customers or via vendors. Direct Sales Direct sales include selling through retail, mail, order, on site, door to door or any other method (Nash, 2000). The main advantage of direct sales is meeting and interacting with the customers face to face. With this level of interaction an organization can easily detect the changes in the market that is taking place and adapt to such changes. In this strategy, the seller has complete control over the product range and the price at which it is being sold. This strategy is generally adapted by those businesses whose product range is seasonal or limited. Direct sales need to have an effective interface with the customers. In case of direct sales, if the seller is not good at developing an interface with the customers then he/she should sell the products to the targeted customers by means of an intermediary. Selling through an intermediary Instead of making direct sales, the companies may decide to sell their products through intermediaries like the wholesalers or the retailers who will be reselling the products finally to the targeted customers. This helps in wider distribution of the products as compared to direct sales. This also helps an organization in decreasing the pressure of managing own distribution system. The most essential reason for selling products through an intermediary is to make easy access to the customers. This is so because the retailers or the wholesalers have good customer connections which would not have been possible to be obtained by the companies on their own. However, there are some disadvantages in selling products through an intermediary as well. The companies may lose their direct contacts with the end users by selling products through retailers or wholesalers. The wholesalers want a steady and year round supply of the products for distributing to the customers. If the companies can deliver steady and year round products to these customers then selling through an intermediary is a good strategy. In the reverse condition, if companies fail to provide year round products to the customers then this is not an appropriate strategy for them. Market Coverage In case of direct sales as well as reselling through intermediary, it is very important for the companies to determine that up to what market coverage area they should distribute the products. Intensive distribution: It is a widespread placement of the companies’ products in most of the possible areas at lower prices. Large businesses market their products using this method at nationwide level. Selective Distribution: This type of distribution is very narrow and restricted to few businesses. Upscale products are mainly sold by the retailers who sell high quality products. This option helps the businesses in establishing relationship with the customers. Exclusive Distribution: This type of distribution restricts distributing the products to one single reseller. Here, a particular company becomes the sole supplier of any retailer who will be selling only this company’s products. This method helps the companies in promoting their products as prestigious. Specialty products are distributed using this method. The 4p’s should work jointly in a marketing mix. The decisions on one particular element will always have an influence on the choices/options available in the others. A good marketing mix requires an appropriate product strategy at the right price promoted in the correct way and offered in the right place. Reference List Anderson, R. E. and Dubinsky, A. J., 2004. Personal selling: Achieving customer satisfaction and loyalty. Boston: Houghton Mifflin. Baker, M., 2012. The marketing book. London: Routledge. Belohlavek, P., 2008. Unicist marketing mix. Houston: Blue Eagle Group. Czinkota, M. R. and Ronkainen, I. A., 2007. International marketing. Connecticut: Cengage Learning. Havaldar, K. K., 2005. Industrial marketing: Text and cases. New Delhi: Tata McGraw-Hill Education. Hobbs, D. P., 2011. Applied lean business transformation: A complete project management approach. Newcastle: J. Ross Publishing. Kumar, n.d. Mktg of hospitality & tourism serv. New York: Tata McGraw-Hill Education. Lamb, C. W., Hair, J. F. and McDaniel C. D., 2011. Essentials of marketing. Connecticut: Cengage Learning. Masterson, R. and Pickton, D., 2010. Marketing: An introduction. California: SAGE. Nash, E., 2000. Direct marketing: Strategy, planning, execution. New York: McGraw Hill Professional. Paul, J., 2008. International marketing: Text and cases. New Delhi: Tata McGraw-Hill Education. Tyagi, C. L. and Kumar, A., 2004. Advertising management. New Delhi: Atlantic Publishers & Dist. Worsam, M., 2003. CIM course book: Effective management for marketing. Woburn: Taylor & Francis. Read More