The Marketing Mix

Product

In terms of the product in the four p’s the product should be a niche in the market so that it sells many of its product in the market. Therefore, the business should spend a lot of time developing the product and investing a lot of money into making sure that the product is correctly tested and appeals to its target market. In addition to this, they need to conduct primary and secondary research to have a reasonable amount of knowledge about the market they are going into. If they aren’t aware of the target market they are selling to and information about there they may not be able to prepare strategies allowing them to compete with their rival’s market share.

Price

Within the pricing aspect we have to consider the following: what strategies will be used to price these products and also how much will be charged on certain products to regain the total revenue used to develop the products. There are various ways to price a certain product such as competitive pricing, cost plus pricing, price skimming, loss leader and penetration pricing. Competitive pricing is quiet common in organisations such as supermarkets; it is useful when a business wants to encourage customers to shop at their supermarket rather than anywhere else. Another strategy is cost-plus pricing; this is when the business allocates a percentage of profits towards covering development costs. The third type of strategy is price skimming this is where a business is aware they have high demand for a product and take advantage by covering all costs and having a large profit margin. Following this, is a loss leader, this is where a business sells a product at a loss in the hope that customers will be attracted to a range of other products the business has. Finally, there is penetration pricing, this is where a business sets a low price in order to attract high demand. It aims to get customers to look at highly price products and also to gain a large market share rapidly eliminating competition.  When pricing a product a business must always consider how much demand on the market there is for the product. Another factor they need to consider is how much of their cost of making the product is they covering for this product to be making the business a profit.

Promotion

The promotion of your product is crucial because promotion can really influence the sales of a product if done correctly and on the other hand can be bad for sales if sending out the wrong image. There are two types of promotion that we particularly look at when we are selling products. The first is above-the-line promotion and the second is bellow-the-line promotion. Above- the-line promotion is when there are high expenses involved such as TV, radio broadcast and national newspapers. Despite having such high expenses attached to it, it can benefit in the long run as these campaigns are seen by millions of viewers within a country. On the other hand, there is bellow-the-line promotion; this is where a business has lower cost attached to promoting their products. Some examples include leaflets, flyers, local newspapers and shop windows. These can be useful in the long run also because if a business has the right locations and are promoting well in a certain area(s) then it can help them expand quickly.

Place

The location of the business and where it assembles is crucial and the decisions involved in terms of how they will sell their product. Where a product sells it products can determine the profit margins of the business and how much the business can charge for a product. For an example, if a product was sold in Oxford Street higher prices could be charged in comparison to Ilford high street. However, a business must be aware of the location they are selling in terms of how much funds they have because in an expensive location it could cause a business to liquidate if they don’t have enough funds to pay to rent the place or buy it. Location is also important in terms of how the product is sold. Naturally, more people will be aware of a place that is on the high street in comparison to a newly started website. This is why location will affect a business because a high street shop could say money on advertisement because more people will be aware of a shop when it starts compared to an internet website. On the other hand, an internet website would have lower start-up costs in comparison to a high street shop.

Price Wars 
This is when two or more businesses are continually charging extremely low prices to make companies suffer who are smaller than them suffer this is to eliminate competition.

Takeovers and Mergers 
A takeover occurs when a business is bought by a company or a wealthy individual normally they take over by buying just over 50% of the business. A merger occurs when two companies combined together the business merged as one means that the owner has an 100% share in the business.

Product extension strategies 
Here are some examples of product extension strategies:

• Sales promotion 
• Modifying the product 
• Loss leader