There are 7Cs, 3Cs and then there are 4Ps. Marketing is full of jargons, and there’s one-stop solution to put all the marketing strategies in one place, we have 4Ps in place. These are namely Product, Price, Place and Promotion. The marketing plan revolves around deciding the best mix of all the 4Ps. Let us take a look at them one by one.
Product strategies involve devising strategies that revolve around finding the relevance and the application of the product. This is at two stages. The product must see the use in both the local market and the international markets. This means that if tomorrow dominos decides to introduce burger, it must be acceptable in the local market and work well in the foreign market as well. We should be able to understand the difference between product and service marketing. Following the logic behind the classification of the product is another objective behind following the product.
We should be able to comprehend the terms such as product mix depth and width, product line and item. In the marketing mix, we must be able to define the role of product distinctively.
The organization with overseas business must critically chalk out a plan for the countries to enter and play a role in the value chain from manufacturing to delivery. After this, there should be a useful pricing strategy respecting the market sentiments and the market par for pricing. Note that it is the price that produces the revenue of the organization. Price is often perceived to be communicating the value positioning and the power of the brand. For instance, the companies selling goods at a premium price is associated with better quality and superior in comparison with the products of products at a low price.
Typically the pricing decisions must involve all the stakeholders such as the customer, company, competitors and the market conditions. For instance, the price of a lubricant in UAE and to any other country would differ keeping in mind the ease of availability and the saturation in the market. The pricing strategies must align with the overall marketing, product and brand strategies which makes the price, not a price tag stuck on the product with an RFID. Holistically setting an equal price for all the market would be a new idea to implement and involves challenges in execution.
From a consumer point of view, he has access to compare the prices from multiple sources of outlets. He has the leverage to exercise his bid and get the product.
Well on the other side of the coin the seller can understand the psychology behind the product purchase behavior, create market within market by offering differential prices to different set of customers, sell the product at various channels available and set the price accordingly depending on the number of vendors involved at each stage in manufacturing to delivery.
There is an interesting theory behind setting the price; the process is as follows,
Deciding the motive behind setting price: this involves whether by placing the amount the product wants to penetrate the market or wants to establish a position in the minds of the customer about the product. In addition to this, the objective of setting the price could be to be alive in the market merely or to yield a maximum profit at the present time. It also could be to serve a large market and set the prices which would be acceptable to most of the people.
Estimating the demand for the product: the price at each level will have a different needs. It is evident that the price and the demand do not go hand in hand and shows an inverse relationship.
Estimating the cost of the product: Demand and cost are the two limits for charging a product. The company would like to charge the product inclusive of all the charges right from production, distribution, selling and all other explicit costs. This also includes the risk and the goodwill associated with the product.
Taking into account the competitor pricing: In a similar product category, we would not ideally want to fall back because of pricing, and we would, therefore, take into consideration the competitor pricing.
So if Amazon announces a mega sale, eBay wouldn’t want to see the traffic diverting to Amazon and losing business.
Selecting the pricing model: There are various methods of pricing model. These are markup pricing, target return pricing, perceived value pricing, value pricing. Going rate pricing, auction type pricing. We will cover some of the methods in detail in pricing strategies module.
Selecting the final price: before deciding to select the price, it should be ensured that the final price is by the company pricing policies.
It is very important to decide the channel of distribution which constitutes the place. For this one must be aware of the channels of distribution available for the commercial sale of the product. He must possess a fair understanding of the vertical marketing system and the horizontal marketing system. He must possess the knowledge of the key stakeholders in the channel of distribution such as retailers, distributors, sales personnel, wholesalers.
He must differentiate between franchising and retailing. While conducting business one must be aware not to disturb the channels and disintermediate the channel stakeholders in the process.
One must understand the role and the importance of all the stakeholders in the value chain. In the era of modernisation, one must be aware of the revolution brought in by the internet and the implication to the line of business.
Promotion is not just shouting out loud in the market about your product. It involves using the right communication channel. There should involve a strategy to appreciate marketing via promotion by the right communication channel. Promotion involves planning correct integrated marketing communication. This involves analysis, setting objectives, deciding strategy, connection, feedback, follow up and eventually evaluation. Promotion involves different contact methods such as advertising, personal selling, publicity, direct marketing, sponsorship.
Using all above we can solve marketing communications problem. In an organization, there are two types of communication. These are in corporate communications and marketing communications. The corporate deals with a lot of stakeholder such as employees, shareholders, stakeholders etc. and are therefore broader than marketing communication. Marketing communications involve only one stakeholder who is the customer.
For promotions in the form of communication for effective marketing, the noise level should be minimum. Noise in communication includes psychological noise. It may also include environmental noise, physiological and semantic noises.