4 Ps of Marketing
Product – The product itself is a very important part of marketing. This can be a physical good or an intangible service. The company needs to pay attention to the quality of the product to ensure it meets customer needs. Pricing – Pricing is a very important decision for a product because it can impact sales and opinions on the product. There are many factors that go into pricing decisions. This includes the costs, including fixed, variable, and direct and indirect costs. It also includes the competition. If the market is saturated, the company may have to lower the product’s price to compete. Place – The place element of the four Ps of marketing refers to the distribution or how the product gets from the company to the consumer. It focuses on the location of store, as well as the placement of your goods in a distributor’s store. Promotion – No matter how great a product is, it will not do well if no one knows about it. This is why promotion is so important. Promotion is the act of marketing a product so that people become aware of it and hopefully want to purchase it.
Today we want to go over basically the 4P’s of marketing. The 4P’s of Marketing. The fact that they all begin with a P makes them hopefully easier to remember, and each word then relates to a different aspect of marketing, and we’ve started each word with the letter P once again to help you remember it easier. So the four P’s of marketing are product, promotion, place, and price. Product, promotion, place, and price. And when we think about this, each time you’re going to market either a product or a service, these four P’s need to be considered in property marketing. If we were going to use an example, let’s say for instance, not just an actual product, but let’s say a program, maybe a health providing program. How would we promote or market that health program? So first of all, we need to consider the product. So what is the actual physical product or service, in this case it’s a health education program, and we want to include appearance and function. So this is definitional. What is it that we are providing, either the physical thing itself, or the service provided, what is it? Define the product. You need to know the product if you’re going properly market it. So in this case, if we’ve got a health education program that we want to implement, we need to know everything about it that we’re trying to provide. What is the information that we’re desiring to get across. What are the specifics in terms of the product provided. Next we need to think in terms of promotion. So we’ve defined the product, now how are we going to make other people aware? How are we going to promote our product? So here we want to think in terms of advertising, brochures, flyers. And you want to weigh the cost of promoting it against the size of the target audience. So we have a community in which we’re trying to get our health information across to them. We want them to come and hear and receive the information, get the education for their better health, and so we’re going to advertise that, perhaps radio, tv, other forms, brochures, flyers, costs of printing, all this stuff, you’re going to weigh all those costs of the various promotional ways against the size of the target audience. So for instance, if we have a community of 100,000 people that we want to reach, we’ve got a large target audience, therefore it’s ok to spend more on broader forms of advertising. Maybe we don’t want to print 100,000 brochures, but we might want to spend more on tv and radio in order to reach that broader audience. Now, if we’ve only got a target audience of say 50, in a very small community, we don’t want to pay the exorbitant cost of putting out a commercial for tv, or maybe not even a radio spot, we could print 50 brochures or flyers pretty easily, and get people to hand those things out. So in terms of promotion, weigh the cost of promotion against the size of the target audience. So we know what our product is that we’re trying to provide, we’ve talked about promoting it, now we need to think place. Where and how are we going to deliver our product to the target audience. What is our placement going to be then? So how are we going to get it to them and where are we going to deliver it to them? So we need to make sure with our health education program that we have a proper venue, we’ve reserved it, we know that there’s adequate facilities there, people can find it, that they’ll be comfortable while they’re there. If you’ve got a bad placement, then not many people are going to want to come and get your product. So let’s say you reach a target audience that’s large, but you tell them they’ve got to drive 100 miles to get to it, most people aren’t going to drive that far to get to it unless they really really need it. So you need to think in terms of ok here’s what we’re trying to promote, here’s the product, here’s how we’re going to make people know about it, and let’s now define and get a good place that will attract people there, make it easy for them to get there, and therefore want to come and learn more about our program. In terms of products, when you think of placement, when you go to the grocery store, things that are in the middle of those aisles, not up high and not down low, but right there in the middle, easiest to reach, are usually the people who’ve payed most. They want their products right there where it’s the easiest for someone to grab it and put into their cart. Placement to them is everything. If you’ve got to bend down to get it that’s a problem, if you’ve got to reach up high to get it that’s a problem. They want the prime place, and they pay for it. So when we think in placement in terms of what we’ve talked about our health education program, adequate facilities, easily gotten to, adequate to the type of people or the amount of people that we think we’re going to attract, and those sorts of considerations need to go into play here. And finally price. Before you’ve done any marketing, we’ve talked about our product, we’ve talked about how we’re going to promote it, we’ve found a place, but now we need to say how much are we going to charge for it? What’s the good price point here? So you need to have the actual price of material, services, and staff, the cost to the provider vs. the cost to the target audience, and then ways you can possibly bring in cost savings. So there’s the actual price, and then there’s the price we’re going to put on it. So the actual price is would be the cost to the provider. How much to rent the place? How much for these materials? How much for the staff necessary to make sure people are comfortable? Sll those actual costs, and then how much are we going to charge the people for the product? If you say well it’s going to cost us $50 a head to do this, so let’s charge $150, you may have just priced yourself right out of the market. Most people may not have that kind of money, or there may be a situation where they say well, I want this information, but I don’t think it’s worth that much and you then shrink your audience. Whereas if you said you know it costs us $50 we’re going to charge $75, a modest return on it or whatever you think is appropriate, you get more people to come. So when you think of cost, you need to weigh the actual cost vs. the target cost, and how you might bring in some cost savings. Perhaps we don’t have to print as many brochures with three different colors on the glossy paper, we’ll do flyers off of a copy machine and hand those out, and can reduce the cost there, and pass those savings along, and thereby getting more people to come to the event. So the 4 P’s of marketing. Know your product, the actual physical product or service, including it’s appearance and function. The next P: promotion. Advertising, weighing the cost of the promotion against the size of the target audience. Placement, or the place, how and where you’re going to deliver to the target audience. And then the price. Actual price of materials, services, staff, weighed against the cost to the target audience, and then think in terms of possible cost savings. Product, promotion, place, price, are the 4 P’s of marketing.
Provided by: Mometrix Test Preparation
Last updated: 12/15/2017
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