4 Ps of Marketing
Product Price Place Promotion
These are referred to as the marketing mix, and they must be properly combined for an effective marketing campaign
Product/Service Mix
Mixing of product and service e.g. retail stores such as Sears add
extras to the products they sell such as delivery, installation and extended product warranties
Can also have a service business, such as a movie theatre, that also sells products, e.g. popcorn
Price
How much is charged for the product or service
Can determine the success or failure of a product
Consumers are very aware of price and compare brands and stores
Marketers need to know if consumers are price sensitive How much sales will go up or down
based on changes in price
Place
Also known as channels of distribution Paths of ownership or control that
goods follow as they pass from producer to consumer
Methods that a business uses to sell and distribute its products
Direct Channel
Connects buyers to businesses that are selling the goods or providing services
No intermediaries (middle person) to increase the cost
Known as maker-user relationship
Indirect Channel
Have one or more intermediaries Could be an importer, wholesaler or
retailer
Importer Someone who searches for foreign
businesses that want to sell their product to Canadian consumers
Can have exclusive rights to distribute the product in a certain region/country
Wholesalers
Individuals or companies that buy goods from producers or importers and resell the products to retailers
Why use a wholesaler? Can buy in smaller quantities vs.
buying directly from manufacturer Usually located closer to the
wholesaler
Specialty Channels
An indirect channel of distribution that does not involve a retail store
Examples: Vending machines Telemarketing Catalogue sales E-commerce Door-to-door sales
Promotion
Any attempt to sell a product or service
Sales promotions encourage consumers to buy products using: Coupons Contests Premiums Samples Special events
Coupons
Offering consumers money off of the price of a product
They are treated like cash Most coupons end up in the garbage
Redemption Rate Measures the effectiveness of a coupon
program The larger the coupon, the higher the
redemption rate Average is about 5%
Contests
A way to increase brand recognition and sales
Law requires people to demonstrate a skill or answer a skill-testing question e.g. Tim Hortons Roll up the Rim
contest
Premium
Giveaways Sometimes the consumer gets
something for free when purchasing a product e.g. a toy in cereal box
Customer loyalty cards are another method Stamped each time the consumer
makes a purchase
Samples
Encourage consumers to try a product
Often small “trial” sizes of the product
Sometimes distributed door-to-door or at the supermarket
An effective way to increase sales but expensive
Special Events
Organizing special events to attract consumers and increase product sales e.g. book signing, celebrities that
promote shoes, perfume
Consumer Market
Companies study the types of consumers that buy their products
Can be identified by: Demographics Lifestyle
Demographics
The study of obvious characteristics that categorize people, such as: Age Gender Family life cycle Household income Ethnicity and culture Lifestyle
Competition
Competitive market Consists of all the sellers of a specific
product Often expressed in terms of annual
spending on a specific product
Market share The % of the market that a company or
brand has
Competition continued…
Market Segment Part of the overall market that has
similar characteristics e.g. soft drink market would have a diet
segment, flavoured segment
Competition continued…
Direct Competition Competition between products that
are very similare.g. Ritz Crackers vs. Premium
Plus crackers
Indirect Competition
Competition between products or services that are not directly related to each other e.g. movie and pizza
Income
Discretionary Income The portion of disposable income
that is not already committed to paying for necessities and can be used to buy items for comfort and pleasure
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