Design 9.3

• Marketing Mix: The Four P's

  Understanding the target market is essential for a design to be successful.

  
• The Four P's: Product

  The product refers to the:

  • features
  • quality
  • packaging
  • branding
  • etc...

  (...) that define the product. 
• Product Standardization

  It refers to uniform or shared characteristics of a product.

  There are three types:

  • Government Standards
  • Component Standards
  • Industry Standards
• Government Standards

  Government regulations and policies may dictate certain aspects of a design. 

  Examples:

  • Safety certifications
  • Recycling information

  
• Component Standards


  It refer to the sharing of components across an industry. 

  Examples:

  • Standardized components for computers
  • Bicycle wheel sizes

  
• Industry Standards


  It refer to the shared standards that an industry may adopt. These can be related to the manufacture or sale of the product. 

  Examples:

  • Raw sizes of wood panels
  • Shoe sizes
  • Screw, nuts, and bolt sizes.

  
• The Four P's: Place


  It refers to how the product will be distributed and sold. Companies have several options for how they sell their products, and each option or combination of options requires careful analysis in order to be successful.

  • Where will the product be sold?
  • Who will sell the product? 
  • How will it be sold? 
  • How will it be distributed?
• The Four P's: Promotion


  It is the method(s) of informing current, potential, and future customers of the availability of a product or service. It aims to generate profit by converting interest in the product into actual sales.
• The Four P's: Price


  It is the amount of money a consumer pays to purchase a product or service. This is an essential aspect of the marketing mix as it determines whether or not a product will generate profit. Companies may use a variety of price-setting strategies.
• Key term: Cost


  The amount of money a company spends to produce, distribute or market a product.
• Key term: Unit cost


  The amount of money it costs to produce a single item. This may be determined by the scale of manufacture. It and Cost are sometimes used interchangeably.
• Key term: Profit


  The amount of money a company makes from selling a product, after it has paid the costs of manufacture.
• Key term: Price


  The amount of money a customer pays for a product or service.
• Cost-Plus Pricing


  A percentage is added to the total production costs to generate a profit margin.
• Demand Pricing


  The price is set according to the demand for the product. A higher demand for the product can allow manufacturers to set a higher price. Conversely, lower demand may mean a lower price needs to be set.
• Psychological pricing


  It is the setting of the price so that the consumer feels like they are paying less.
• Product-line pricing


  The price is set within a product line of a family of products. The price might differ according to the different features or qualities of a product.
• Competitor-based pricing


  The price is set according to what other products are being sold for in the market place. Depending on the pricing and branding strategies, the price may be lower, the same, or higher than competitors. The existing price of competitors' products is the main influence on the price.