09-01-2014, 04:57 PM
Marketing’s Four P’s: First Steps for New Entrepreneurs
Product
“Product” refers to the goods and services you offer to your
customers. Apart from the physical product itself, there are
elements associated with your product that customers may be
attracted to, such as the way it is packaged. Other product
attributes include quality, features, options, services, warran-
ties, and brand name. Thus, you might think of what you
offer as a bundle of goods and services. Your product’s
appearance, function, and support make up what the customer
is actually buying. Successful managers pay close attention to
the needs their product bundles address for customers.
Your product bundle should meet the needs of a particular
target market. For example, a luxury product should create
just the right image for “customers who have everything,”
while many basic products must be positioned for price-
conscious consumers. Other important aspects of product may
include an appropriate product range, design, warranties, or a
brand name.
Price
“Price” refers to how much you charge for your product or
service. Determining your product’s price can be tricky and
even frightening. Many small business owners feel they must
absolutely have the lowest price around. So they begin their
business by creating an impression of bargain pricing.
However, this may be a signal of low quality and not part of
the image you want to portray. Your pricing approach should
reflect the appropriate positioning of your product in the
market and result in a price that covers your cost per item and
includes a profit margin. The result should neither be greedy
nor timid. The former will price you out of the market;
pricing too low will make it impossible to grow.
Place
“Place” refers to the distribution channels used to get your
product to your customers. What your product is will greatly
influence how you distribute it. If, for example, you own a
small retail store or offer a service to your local community,
then you are at the end of the distribution chain, and so you
will be supplying directly to the customer. Businesses that
create or assemble a product will have two options: selling
directly to consumers or selling to a vendor.
Direct Sales
As a producer, you must decide if supplying direct is appropri-
ate for your product, whether it be sales through retail, door-
to-door, mail order, e-commerce, on-site, or some other
method. An advantage of direct sales would be the contact you
gain by meeting customers face to face. With this contact you
can easily detect market changes that occur and adapt to
them. You also have complete control over your product
range, how it is sold, and at what price.
Direct sales may be a good place to start when the supply of
your product is limited or seasonal. For example, direct sales
for many home-produced products can occur through home-
based sales, markets, and stands.
Promotion
“Promotion” refers to the advertising and selling part of
marketing. It is how you let people know what you’ve got for
sale. The purpose of promotion is to get people to understand
what your product is, what they can use it for, and why they
should want it. You want the customers who are looking for a
product to know that your product satisfies their needs.
To be effective, your promotional efforts should contain a
clear message targeted to a specific audience reached via an
appropriate channel. Your target audience will be the people
who use or influence the purchase of your product. You
should focus your market research efforts on identifying these
individuals. Your message must be consistent with your
overall marketing image, get your target audience’s attention,
and elicit the response you desire, whether it is to purchase
your product or to form an opinion. The channel you select
for your message will likely involve use of a few key marketing
channels. Promotion may involve advertising, public
relations, personal selling, and sales promotions.