The
four primary elements of marketing are prominently
known as the “4 Ps”, identified as
Product, Price, Place and Promotion. Each of these
elements is a variable that can be controlled
by the organisation to effectively produce sales.
Marketing theory suggests that it is impossible
to make a customer be satisfied if s/he is not
of the opinion that your product is fulfilling
the desired requirements; you cannot control your
customers. All four elements are independent are
the ingredients to produce a marketing mix for
each product and service on offer. Remember, your
mix will also be dependent on the environmental
mix, i.e. competitors and customer trends, and
your organisations goals and objectives.
Product
This defines the
item that you are selling. A product (or service)
is produced or delivered to address certain needs
of the market. It is absolutely not feasible to
store any product that cannot be sold to the customer,
who may have certain needs but not regarding the
particular product in question. Customers (or
consumers) need to be satisfied, and there are
specific benefits and features that they require,
thus solving their problem and assisting them
achieve a personal objective.
The manufacturing
and marketing team both should consider what the
product can and will be used for, the advantage
it will have over that made by a competitor, the
specifications and ease of use by whoever is in
possession of it, and the marketability. You should
then hope that the customer purchases it without
scrutiny.
Price
A product price
comprises several elements, the sum of which is
passed on to the consumer to bear for purchasing
it. The customer merely sees the price tag or
the comprehensive cost of a lease plan etc. but
the secret behind maintaining a competitive cost
structure is yours which will determine if the
customer will come back to you or select someone
else.
Costs accumulate
as a product moves from the various phases of
business – purchase of raw materials, processing,
application of overheads, storage and warehousing,
ordering costs, sales and distribution expenses,
administrative costs, and finally making it possible
for all customers to have access to the product.
This sales price should be set to a minimum, which
should incorporate all possible costs that are
and can be incurred in the process of making it
available and giving the dealer or the reseller
enough room to make a little for himself too.
The prices should
not be exaggerated despite the fact that you are
the only supplier or producer of the product.
Neither should the price be too low to somehow
capture the market. The repercussions of such
moves can be drastic and possibly affect the value
of the company.
Companies may
use various pricing tactics to earn profits, most
of which are quite popularly used worldwide:
-
Mark-up
pricing: The sales prices of products are
based on the cost of purchase and/or processing
costs incurred in the process of making the
final product available. This may be helpful
for companies who can reduce the average cost
of each unit to a level which would not only
optimise their capacity but also maintain
the standard quality requirement for end-user
satisfaction.
-
Price
Skimming: Some organisations produce a range
of innovative products for various users in
the market. Since there is no competition
for the product, the producer can afford to
keep high prices in the beginning and later
reduce it to fairly compete against other
producers once they catch on. Tactically,
this method allows innovative companies to
maximise profitability in the shortest possible
time, for as long as their patents last.
-
Market
rate: most products and services are sold
at ongoing market rates regardless of the
cost involved, e.g. gasoline. These vary owing
to a constant change in demand and supply
occurring on a greater territorial range,
and not on a local basis.
Place
Place refers to
the distribution channel used to reach the end
user of the product. Always remember that your
dealers, wholesalers and all other middlemen (intermediaries)
are like partners, and can be very helpful in
promoting your products. Remember, they too have
certain needs and must be satisfied to ensure
proper projection to your customers and feedback
from them as well.
Your trade partners
can assist you in placing the products in the
most prominent and attractive positions to stimulate
as many customers possible, thereby assisting
in generating demand, hence a rise in the market
share.
Your final target,
the end-user should always be part of the overall
marketing plan right from the start; it is not
possible to remove him from the picture as your
company will not be if he isn’t willing
to buy whatever you have. Your target market will
depend on two things; firstly, the nature of the
product, whether it is a luxury or a necessity
or something of mixed nature; and secondly, the
price at which it is offered, which may actually
be the deciding factor for many consumers as many
may automatically term an expensive product as
a luxury despite its mixed nature.
Promotion
Promotion is technically
not synonymous with marketing, but is one of the
4 Ps that a marketer has to look out for when
he has to sell the product. A marketer or promoter
must have extreme control over his emotions, have
a good plan that directly relate and target to
his potential customer, and must be a good listener.
A promotion may
be through various media, including the traditional
person to person sales and stretching to the television,
radio, print, and the internet. Creating awareness
is the central feature of any good marketing campaign;
even the simplest and least expensive method can
create an impact, good enough to cloud a large
billboard in the busiest shopping area of the
city.
Most companies
use special events and techniques to leave a lasting
impression on the people, of course this would
only work if it has been properly organised and
attracts the potential target effectively. The
objective for all this promotional exercise is
not just to stimulate demand, but also build brand
loyalty and a relationship of trust, this being
in the hands of the product managers and how efficiently
they manage these activities.
Remember the golden
rule: the 4 Ps are yours to control, and they
are interdependent of each other. The variable
which each depends on is the sales volume, which
is again dependent on the input. There is no ideal
mix for any given market. Each market is dynamic,
as is every individual that is part of the market;
you can produce whatever you wish but can never
be sure what it holds for you unless you have
a proper market plan and have thoroughly studied
the market before jumping in. |
