The Marketing Mix

Product Price Promotion Place Marketing Mix

The marketing mix consists of the four Ps of marketing: product, price, place, and promotion. It is a memory tool used by marketers to increase the success rate of business endeavors.

The idea is that marketers must be successful in all four areas in order to successfully generate revenue. They need to have the right product, at the right price-point, in the right location, with the right communication. This is the goal of marketing.

Marketing Mix: Product

The most successful businesses are the ones that provide the greatest value to people. Ultimately, the purpose of business is to create value for customers and satisfy their demands. In order to succeed in the product category, you need to have the right product that creates value for potential customers. If your product is not considered to be valuable, or it does not fulfill customer wants and needs, then people will not exchange their money for your product.

Marketing Mix: Price

Money is the universal method of establishing value in the modern world. If you want to sell your product at a high price point, it needs to be worth that price. However, because price communicates value, if you sell your product too low then customers may assume your product is not valuable.

When it comes to setting the right price, it is important to understand the effects that supply and demand have on the market. If there is already a high supply of your product, or similar products, then matching competitor pricing is a necessity. If you price higher, then you will need to communicate to potential customers why your product is more valuable (What does your product offer that others don't?). If you price lower, you will need to communicate that your product is just as valuable, otherwise people will assume that cheap means low quality.

Price-points are overall established by customers who are voluntarily exchanging money (which has value) for products (which have value). This voluntary exchange of value for value is what determines price. If the price is too high for the perceived value, then customers will not buy. If the price is too low, then the perceived value may be reduced, and customer's will not buy.

Consider a computer. Would you buy a brand new computer with the latest operating system, processor, and high RAM for only $50? A customer's perceived value would be reduced, and the customer would assume there is something wrong with the product, or that it is a scam. Another way to consider this question is to remove money from the equation and consider what else you can buy for $50. Would you exchange a new video game for the latest high-tech computer? Are these two products equal in value?

A customer's perception of value is largely affected by supply and demand. For example, the high price of diamonds are controlled by controlling the availability of mined diamonds in the world. However, diamonds also have value beyond their literal worth by having prestige value.

Getting the price right is essential, because the wrong price will hinder business either through reduced sales volume or by hindering overall revenue, which may threaten the survivability of the company.

Marketing Mix: Place

The marketing mix category place goes beyond the location of the business. It also has to do with the location of the product itself on store shelves or location on an internet page. Is the location of the product somewhere potential customers expect to find it?

Convenience is an important factor for many customers. If they have to search for your product, they are unlikely to buy it, especially if a similar product is readily found. You may offer a one-of-kind product on your website, but if visitors cannot easily find it or access it, then they will lose interest.

In large companies, place also includes supply chain management, and having the products in the right place at the right time.

Marketing Mix: Promotion

Promotion is all about communication. Specifically, promotion is about communicating value (although price also communicates value). You may have the best product in the world, but if no one knows about it or how it will benefit them, then it will remain unsold. However, certain products need the right avenue of communication. Attempting to sell satellite radio in a magazine is not as appropriate as selling satellite radio on a FM radio station.

The goal of promotion is to encourage the process of AIDA: Awareness, Interest, Desire, Action.

Article: How to Sell Online with the Marketing Mix

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