THE MARKETING MIX
The 4ps
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PRICE
PLACE
PRODUCT
PROMOTION
Why are the 4Ps so
important?
• To ensure a successful product
an organisation must get the 4
elements of the marketing mix
just right. For example if they
don’t get the price right eg too
expensive then people may not
buy the product.
PRICE
• For most people price is a deciding
factor in whether they will buy a
product or not – so the price set has
to be just right – also depending
upon where a product is in its life
cycle might help a business decide
the price. Demand and supply of the
product can also determine price
Pricing Strategies –
what to consider
• What are competitors charging for
their product
• How can you use price to promote
your product and so increase sales
• What the price needs to cover eg
what are the costs of production
• Where is the product on its product
life cycle
Competitors’ prices
• Orgs can undercut competitors – but
have to be careful – as too cheap
might make your product seem
poorer quality
• Or you can set your price at the
same as your competitors and so
you are matching them – if you do
this you have to give your product
more promotion or a USP (Unique
Selling Point)
Destroyer Pricing
• Large orgs who are pretty stable and
have good finance may sometimes
use this strategy of undercutting
competitors to try and remove them
from the market – they may sustain a
short term loss – once the
competitor is removed then the price
will be put up to a realistic level
Penetration Pricing
• Mainly used on new products
entering a highly competitive
market – to attract customers
to your new product – once you
have captured a market share
and people have become brand
loyal – then the price is put up
to a realistic price eg remember
Golden Grahams
Skimming
• This involves setting a high price for a new
product as it is launched onto the market –
used a lot with new technology products –
once the people who want to have new
techno products have got one (saturated
the market) – the price is lowered – then
others can afford it – saturate that market
– then price lowered again (and
competitors may now be in the market) –
high prices helps orgs to recover some of
the research and development costs
Cost Plus Pricing
• You calculate how much it costs
to produce the product – for
each unit – then you say want to
earn a 10% profit – you add on
10% to the unit cost and you
then have your price.
PRODUCT
• Product most important part of
marketing mix – no point in
having other 3 elements correct
if your product isn’t right. If
your product is of poor quality it
will not sell.
Decisions to make about
the Product
• What product are they going to sell?
• What are they going to call the product? –
it has to be pronounceable and
remembered easily
• How is the product to be packaged – eg
design, colour, distance it has to travel,
information about contents
• Should it be branded?
• Should it be seen to be environmentally
friendly?
• What will its product life cycle be?
Product Life Cycle
• Go onto website
• www.bized.co.uk
• From the website we can see that
organisations have to be aware that
each product has a different life
cycle. For example technology
products tend to have quite a short
life cycle, as do confectionary
products
• Find out about how
organisations can extend the
life cycle of their product – the
strategies that they use. Opal
Fruits, Coco Pops, Kit Kats,
Dyson just some examples to
look up.