Marketers use many different methods to summarize and explain the fundamentals of marketing, but one of the most prevalent is ‘The 4 Ps’. Known as the marketing mix by business managers, the four Ps are typically referred to as: product, price, place and promotion.
First and foremost stands the product; what are you selling? A good or a service can be simple, such as a can of soup, or complex, such as a business to business consulting service. The product refers not only to the central good or service, but also everything around it. For example, if you are running a hotel, are you simply offering a room and a bed, or do you also include concierge service, continental breakfast, daily activities, etc.?
Obviously a big part of the consumer’s purchase decision is price. Will the product be priced on the low end of the spectrum, thus appealing to more people? Or will it be priced higher, signaling, perhaps, a higher level of quality? Of course, a higher price does not ALWAYS signify a better product, but perception often dictates that the two are related. Marketers will use various strategies with regards to pricing, such as buy one get one free, or loss leaders.
A loss leader is an item that is offered at a discount price in order to bring people to the store, in hopes that they will then purchase other, more expensive items as well. Retailers will often use 9’s in order to create a perception of value, and 0’s to indicate prestige or quality. For example, an item of clothes priced at $69.99 appears to be ‘reduced’ in price, whereas the same item, retailing at $70, may provide the appearance of being a luxury item.
Placement plays a big part in determining how much a product will sell, and to whom. Designer fashion items are often sold only by certain high end retailers. It is felt that if they were available at every shopping mall, it would diminish the ‘exclusivity’ of the brand. Lower priced brands, on the other hand, will attempt to sell their products wherever possible, believing that the greater the exposure, the greater the sales. A chocolate bar will often be placed right in the check-out line at the grocery store. Since it is a ‘low involvement decision’ it is hoped that people will impulsively decide to spend a dollar.
Higher involvement decisions, such as automobiles, are placed in showrooms, where people can come to explore, and then, hopefully, be talked into making a purchase. Seemingly small things, such as shelf placement, can be surprisingly important in sales volumes. Packaged foods distributers will fight tooth and nail to ensure that their products are placed at eye level in the grocery store, as opposed to the top, or bottom shelves.
Advertising, sponsorships, logos, sales forces, community events and many other efforts can be placed under the broad umbrella of ‘promotions’. From a simple 30 second TV ad, to a cold calling telemarketing campaign, promotions are key in making sure that a product stays in the front of the consumer’s mind, giving them the edge on their competitors. Sneaker companies fight to ensure that star athletes are seen wearing their shoes, while manufacturers of everything from luxury automobiles to candy attempting to get their products in movies and TV shows.
Marketing is a fascinating subject, and can be learned about in more detail in the Business Administration course, here at ABM College!