The 4 Ps
Basic Place Decisions
Distribution channels (trucks, pipes, air, water, etc.) Inventory management Warehousing Transportation and logistics
The 5th P
People includes the following concepts: clearly defining a target market implementing customer-driven strategies creating a service-oriented corporate image
Impact of the 5th P
People determine a company's level of success Customers often provide helpful and needed suggestions Word-of-mouth is the most powerful form of buying suggestion Directing decisions toward the right market is critical
The Mix
Represents the idea that four significant marketing concepts (the 4 Ps) must be strategically coordinated and work together in order to create cohesive business decisions
Basic Pricing Decisions
Determining a suggested retail price Implementing a pricing strategy Creating volume discounts Generating seasonal pricing Producing bundle prices
Place ( Distribution )
Determining which retail outlets will carry specific products Selecting the shelf space or display style which is most effective Researching where a store should be located
Product
Developing new uses or new target markets for a product Examining the product life cycle Adding features to an old product
Place : Customer Application
A store's location may impact buying decisions Some customers are prone to specific product outlets, such as the Internet
Promotion: Customer Application
Brand awareness is the first step toward product sales Public relations and advertising have a direct impact on customer loyalty Promotion stimulates a need and desire to buy Special offers or campaigns often yield higher sales results
Basic Product Decisions
Brand or product name Styling Quality Safety Packaging Repairs and support Accessories and services
Product: Customer Application
Customers buy benefits - not products Products must satisfy a customer want or need Consumers are often heavily influenced by brand name or packaging Extended services or warranties can create customer loyalty New and improved products often have a high success rate
Price:Customer Application
Customers understand value Price is a psychological variable it alters a buyer's motivation price can influence the perception of status or luxury price can stimulate or decrease demand Pricing strategies which do not relate to customer habits will be unsuccessful
The Marketing Mix
Defines the key management decisions needed to be successful in marketing
Price
Includes a wide range of functions and strategies, including: creating a sales price or price list calculating mark-up percentage using promotional pricing techniques understanding pricing laws and discrimination determining discounts, credit terms and available payment methods, such as: cash and credit options credit card machines financing and payment plans
Promotion
Includes decisions about the following Advertising Personal Selling Sales Promotions Publicity and Public Relations
Place
Is also described as "distribution" Includes whether or not products should be sold online or internationally
Basic Place Decisions
Market coverage (exclusive, selective, inclusive)
Importance of the Internet
Marketing mix decisions may directly relate to a company's online presence Leveraging full power of the Internet may be a key business strategy The Internet can be used to change, optimize and enhance marketing strategies Online services can be easily adapted to meet changing trends
Place: Customer Application
Products should arrive on-time in order to meet customer needs Inventory shortage may drive customers away
Place
Refers to introduction of the product to consumers and determining appropriate transportation or delivery methods using semi-trucks or airfreight carriers utilizing intermediaries or wholesalers in the distribution process
Promotion
Relates to the timing of promotional campaigns Refers to the type of message communicated to customers Requires selecting media outlets Creates activities and strategies to increase sales
Basic Promotion Decisions
Selecting advertising media Creating personal sales force tactics Designing sales promotions and special offers Maintaining effective media and public relations Establishing a marketing communication budget
Product
Selecting which products to buy and sell Researching and creating product designs Naming and packaging products Updating, improving or eliminating products from a product line
Interdependence
The 4 Ps are directly related decisions cannot be made about a product, without also considering the relationship of price decisions cannot be made about promotion without understanding the importance of place Proper utilization of the 4 Ps provides a company with a solid foundation for success
Business Buzz
The marketing mix consists of a number of essential functions. Which of the 4 Ps do you think is most important? The "marketing mix" concept was first developed by Neil H. Borden in 1964 after he published an article describing the role of marketing as a "mixer of ingredients"
Limitations of the 4 Ps
The marketing mix specifically applies to companies with physical products and often limits Internet and service-based organizations By grouping marketing decisions into four broad categories, it is difficult to distinguish between specific activities such as financing, branding, shipping, etc. Some industry professionals have attempted to expand the concept by adding a "fifth P"
Place ( Distribution )
Understanding where customers shop Determining how and when a product will be distributed Making decisions about product expansion or international sales
The 4 Ps
price product place promotion