4p's in the Art

• Marketing's Four P's


  • Product
  • Price
  • Place
  • Promotion
• Marketing your business is about how you position it to satisfy your market's needs
• Four critical elements in marketing your products and business


  • Product
  • Price
  • Place
  • Promotion
• Product


  The right product to satisfy the needs of your target customer
• Price


  The right product offered at the right price
• Place


  The right product at the right price available in the right place to be bought by customers
• Promotion


  Informing potential customers of the availability of the product, its price and its place
• Each of the four P's is a variable you control in creating the marketing mix that will attract customers to your business
• The success of your business depends on your marketing mix
• Product


  • Physical product itself
  • Packaging
  • Quality
  • Features
  • Options
  • Services
  • Warranties
  • Brand name
• Product bundle


  What the customer is actually buying - the goods and services you offer
• Successful managers pay close attention to the needs their product bundles address for customers
• Your product bundle should meet the needs of a particular target market
• Customer research is a key element in building an effective marketing mix
• Your knowledge of your target market and your competitors will allow you to offer a product that will appeal to customers and avoid costly mistakes
• Considering starting a new business or adding a new product

  1. Make sure the product bundle will fit your business's strengths and weaknesses

  2. Provide an acceptable risk/return tradeoff
• Start-up businesses are most successful when they concentrate their efforts on one product or one market
• Offering a whole range of products is most successful if the raw materials, production processes, and distribution methods are similar
• Price


  How much you charge for your product or service
• Determining your product's price can be tricky and even frightening
• Many small business owners feel they must absolutely have the lowest price around
• Pricing too low will make it impossible to grow
• Pricing strategies


  • Cost-plus
  • Value-based
  • Competitive
  • Going-rate
  • Skimming
  • Discount
  • Loss-leader
  • Psychological
• The amount of money you will actually receive may be complicated by other pricing aspects that will decrease (or increase) the actual amount of money you receive
• Other pricing aspects


  • Payment period
  • Allowance
  • Seasonal allowances
  • Bundling of products/services
  • Trade discounts
  • Price flexibility
  • Price differences among target customer groups
  • Price differences among geographic areas
  • Volume discounts and wholesale pricing
  • Cash and early payment discounts
  • Credit terms
• Whatever your price may be, ultimately it must cover your costs, contribute to your image by communicating the perceived value of your product, counter the competition's offer, and avoid deadly price wars
• Price is the one "P" that generates revenue, while the other three "P's" incur costs
• Place


  The distribution channels used to get your product to your customers
• Direct sales


  • Retail, door-to-door, mail order, e-commerce, on-site
  • Advantages: contact with customers, detect market changes, control over product range, pricing
  • Disadvantages: need effective retail interface
• Reseller sales (sales through an intermediary)


  • Wholesaler, retailer
  • Advantages: wider distribution, less pressure managing distribution, reduced storage space
  • Disadvantages: lose contact with end consumer, lose company identity
• Market coverage


  • Intensive distribution
  • Selective distribution
  • Exclusive distribution
• Production flow


  • Wholesalers want a steady year-round supply of product to distribute
  • If you can deliver a steady year-round supply that is of consistent quality, then selling through an intermediary may be a good strategy
• Market Coverage


  The extent to which a product is distributed
• Types of market coverage

  • Intensive distribution (widespread placement in as many places as possible, often at low prices)
  • Selective distribution (narrowed distribution to a few businesses)
  • Exclusive distribution (restricted to a single reseller)
• Intensive distribution


  • Large businesses often market on a nationwide level
  • Convenience products do better with intensive (widespread) distribution
• Selective distribution


  • Often used for upscale products sold through retailers that only sell high-quality products
  • Products that people shop around for sell better with selective distribution
• Exclusive distribution


  • You may become the sole supplier to a reseller who, in turn, might sell only your product
  • You may be able to promote your product as prestigious with this method, though you might sacrifice sales volume
  • Specialty products tend to perform better with exclusive distribution
• Other place decisions


  • Product characteristics and sales volumes will dictate what inventories to maintain and how to transport products
  • Logistics associated with acquiring raw materials and ensuring final product is in the right place at the right time for the right customers can comprise a large percentage of total costs and needs careful monitoring
• You may decide to have a combination of all the distribution methods
• Promotion


  The advertising and selling part of marketing, how you let people know what you've got for sale