Marketing Mix: The Four P's Flashcards

Marketing Mix

• Comprises four essential elements: Product, Place, Price, Promotion, known as the 4 Ps.
• These factors are shaped by market research to inform designers about market needs.

Product Standardisation

• Involves defining uniform characteristics across a specific product, service, or system.
• Ensures consistency in offering, making products recognizable and reliable.

Product

• Defined by market analysis, considering customer preferences and competition.
• Influences how various products are developed based on consumer demand.

Place

• Encompasses all methods by which products reach customers, including physical and digital channels.
• Recognizes that distribution can occur through online platforms as well as traditional stores.

Price

• Relates to the total cost a customer incurs to acquire a product or service.
• Encompasses various pricing strategies that can affect consumer purchasing behavior.

Trigger Products

• Standalone products known for their strong performance and function.
• Designed to meet essential consumer needs, e.g., Kitchen Aid appliances and gaming consoles like PS4.

Incremental Products

• Offer consumers additional features or enhancements related to trigger products.
• Encourage purchases of complementary items, such as Kitchen Aid attachments or PS4 accessories.

Promotion

• Refers to strategies used to communicate product information to consumers.
• Includes various methods like advertising, personal selling, and publicity.

Penetration Pricing

• Involves setting a low initial price for a new product to gain market entry.
• Example known in the industry: services like iMusic or Spotify offering free trials before charging.

Competitor-based Pricing

• Establishes a product's price according to the pricing strategies of similar products.
• Businesses may choose to price products lower, equal to, or higher than competitors based on perceived quality.

Psychological Pricing

• A tactic that prices products to create a favorable perception among consumers.
• Example: pricing something at $1.99 instead of $2 to suggest a bargain.

Cost Plus Pricing

• A strategy where companies add a markup to the total costs of production to ensure profitability.
• Captures all expenses including production, design, and distribution in its pricing structure.

Product Line Pricing

• Positions various products within the same line at different price levels based on features.
• Example: iPhones priced higher for more storage or advanced features.

Demand Price

• Sets prices depending on actual consumer demand for a product.
• Commonly seen in gaming consoles where initial high prices are reduced over time to target various market segments.