7.3 The 4 P's of Marketing BEP 201 PDF

7.3 The 4 P’s of Marketing BEP 2O1 What are the 4 P’s? Product Place Price Promotion Successful marketing uses the 4 P’s and plans for their usage in advance Product The actual good or service being created or offered to consumers Successful product should satisfy the wants and needs...

7.3 The 4 P’s of Marketing BEP 2O1 What are the 4 P’s? Product Place Price Promotion Successful marketing uses the 4 P’s and plans for their usage in advance Product The actual good or service being created or offered to consumers Successful product should satisfy the wants and needs of consumers Enhancements to products are always looking to be made in order to beat competition Most important factor of the product = usefulness Other factors to consider are: materials, sizes/varieties, warranties, quality, packaging, return policies, ingredients, safety, durability, environmental friendliness Product - Quality Deciding on the quality of a product is an important decision that affects everything about how a product is marketed. It’s strongly connected to all 4 P’s and 2 C’s of Marketing. There are three general groupings of quality: Premium - Higher product quality Competitive - Moderate product quality Value - Lower product quality Product - Stages of Product Development 1. Idea Generation - brainstorming new ideas, no ideas are eliminated yet 2. Idea Screening - Sort through the ideas. Start narrowing down your choices until you reach a decision 3. Feasibility - How doable is the idea? Based on cost, time, skills, resources, equipment, etc, is the idea a realistic one? Prototype is often made here. 4. Research - If the product is feasible, research begins to make sure the idea appeals to the public. 5. Planning - Officially begin planning the creation of the product/service Place Place - Where consumers can find and buy a business’ goods and services. Also referred to as channels of distribution Channels of distribution are the paths of ownership that goods follow as they pass from the producer or manufacturer to the consumer. Factors affecting physical location: Where the “target market” lives and how many potential customers there are for their products What the “customer experience” would be like or ideally should be like Staying far enough away from the others to minimize competition but close enough to capture a share of the market. Place - Direct Distribution Channels Direct - a business sells their good/service directly to a customer Classic examples = mechanics, restaurant and barbershops Some businesses have their own stores where they exclusively sell their own products (Roots). They also often have e-commerce website options so that customers can shop online. Benefits- Since the product is made and sold by the same business, they are best able to explain the details of the product and how it is to be used. If there is an issue, the customer knows exactly where to take the product for support. Place - Indirect Distribution Channels Indirect - involves second party sellers Retail- The product is sold in a store, online, via app, or via phone but not by the manufacturer. - Best Buy sells electronic goods from a variety of brands Wholesale- The product is sold in a store, online, via app, or via phone but usually in larger amounts and not by the manufacturer. - Costco (buys and sells in bulk) Specialty- The product is sold in a specialized or non-traditional way. Contact with a company is usually not made. (Vending machines, TV shopping, catalogue shopping) Distribution Channels 1 & 2 = Indirect; 3 = Direct Price Price - the amount of money that a business asks its customers to pay for a particular product, service or event. Factors that affect prices - market demand, the state of the competition, distribution costs, and the office and administration overhead costs Recall, we learned about three different levels of product quality. Pricing usually tends to match the product quality. Value - lower quality Competitive - medium quality Premium - high quality Price - Pricing Decisions Based on the factors we saw on the previous slide, companies can choose from different pricing strategies. Penetration Pricing - Selling for a lower price than all competitors. Idea is to sell lots of the product, even though you make a bit less money per sale. Great for new products that are trying to grow popularity Competitive Pricing - selling at the benchmark price/the average price. Products in this pricing need to have a competitive advantage other than price in order to stand out. Price Skimming - Choosing the highest price to sell at. Usually used when introducing a new product that has a lack of competition. Less people may be interested in purchasing because of the price, but less sales need to be made in order to make money. Promotion - Promotion - any attempt to communicate about a good, service, charitable cause or event to consumers Promotion is typically broken down between advertising and selling Advertising is the use of media to promote something and uses a variety of forms to do so Sales Promotions - Making tantalizing/persuasive offers to consumers Print Advertising Traditional print media such as magazines and newspapers Advantages: Good chance to connect with interested consumers (Nike ad in a Sports Illustrated magazine) Ads are more permanent in print form. This can be good for advertising brands, as opposed to specific products Disadvantages: Can be messy and cluttered for consumers (ads can distract or overwhelm readers) Declining viewership Electronic/Broadcast Media Advertising Broadcast media, specifically radio and television Advantages: Ads can be more creative (sound - radio; sound + video - television) Can cater to consumer interests, based on the radio or tv station they play on Disadvantages: Not permanent (you might hear/see it once and forget about it) Expensive Viewers may ignore ads (especially with streaming nowadays) Social Media Advertising The ads that we see on social media/the internet Advantages: We spend lots of time on the internet/social media, so ads have a good chance at reaching us Easier to collect data about ad interactions Can be cheaper to produce Best opportunities for creativity Purchasing options can be linked directly to the ad Disadvantages: Users may dismiss internet ads Promotion - Effective Advertising The AIDA formula is a tool used to measure the effectiveness of an advertisement. A - Attention Good advertising catches the attention of consumers right away. Often using songs, headlines, images or sound to do so. I - Interest Good advertising holds the interest of the viewer. After they get their attention, they should advertise the best/most interesting aspects of the product. D - Desire What is in it for the consumer? Maybe a discount, or some sort of benefit of the product that should encourage them to purchase. A - Action Good advertising invites the viewer to take action and a next step towards purchase. This can include a link to purchase, directions/address to a store Promotion - Sales Promotions Sales Promotions - Making tantalizing/persuasive offers to consumers The goal is to enhance the feelings that consumers have towards a company, good or service. Can include prizes, discounts and samples. They should encourage consumers to want to purchase what is being offered. Sales Representation Sales reps/associates work with customers in stores, over the phone, online and door to door. Beneficial to build strong relationships with customers over time. Keys to being an effective salesperson Knowing the product Being sincere Knowing the customer Being friendly Building trust Being respectful Looking/acting the part Being prepared