So, I was thinking today that if I’m going to be doing some marketing posts in the future, maybe I should talk about some of the basics that I’ve learned so far. I know I’m a dork, but I find it all really interesting. Hopefully someone else will too.
The 4 P’s of Marketing
When most people think of marketing, they automatically think of advertisements, slogans, logos…promotion. But promotion is only one aspect and marketing incorporates a whole lot more.
There are basically four components of the “marketing mix.” Product, Price, Place, and Promotion. These are central to any marketing and what affects one, affects them all. Each one can warrant specialized study and many Phds. But, before all that study comes a basic understanding of what they are.
Simply put, what you’re going to sell.
But it does get much more complicated when you’re actually dealing with it. Your product requires extensive research and development, market research to make sure you’re creating what people want, more market research to find out if what people actually want is the same as what they say they want. Not to mention the research conducted after the product is created to see how well it works, how well it’s liked, what improvements can be made next time, etc.
The amount you’re going to charge for your product.
This is not simply an accounting equation that figures up how much you want in profit. It requires you to know your customers and competitors. Some products are highly price sensitive (i.e. if the price increases, people will stop buying them).
Many grocery items are an example of high price sensitivity. If the cost of the shredded cheese you buy increases, but the bag on the shelf right next to it hasn’t, most people don’t think twice about switching.
You also have to take into account what the price says about your product. Generally, price equates to perceived quality. If I offered to sell you a car for $100, what does that tell you about the car? It probably doesn’t run. It is extremely poor quality. But if you buy a laptop for $2,500, you expect it to be really good.
There was one instance where I went to a clothing to buy a new suit and I found one that cost less than $100 for both pants and jacket. I turned away, because I was specifically looking to buy “a nice suit.”
Also called distribution.
Where will you sell your product? Are you selling your diamond rings at Wal-Mart or Kay’s? Do you see the difference? The retailer who sells your product will reflect on your product and company image. Consumers often view the retailers as an extension of the manufacturer.
And logistics. This element also handles the questions of: how does your product reach retailers? do you go through wholesalers? do you own the trucking company or hire an agency for that?
Telling the consumer about the product.
Of course we’re all inundated with advertising, but like the other elements, promotion is more than just advertising. It also includes packaging, product giveaways, free samples, those reward points programs, coupons, etc. Promotions watches the entire process, from before the product’s introduction into the market to after it’s retired (also known as the product life cycle, which I’ll go over next Monday).
Promotion not only influences what people think/believe about the product, but also has to entice them to buy it. A difficult task to say the least.
To conclude, the four elements of the marketing mix are: product, price, place, and promotion. The above descriptions are very general ways of explaining them. Like I said, each one has a lot more involved than just those few questions I put to them. But that’s a foundation.