The 4 Ps of marketing are in more than one way interdependent. They together help customers in making purchase decisions. If planned properly, 4Ps can also help companies identify the right segment of customers.
A product must satisfy a consumer’s need. It comes with a cost. Production costs must be kept in check and at the same time quality should not be compromised on. A brand must keep its consumer’s interest in mind always.
Price is next. Price escalation takes place when a product moves through the distribution channel. A manufacturer’s selling price becomes a distributor’s cost price. This hurts dealers who end up paying more to the distributor. Ultimately, this affects competition and sales. This escalation in prices forces many consumers to look elsewhere. There are many strategies employed by companies to beat competition. There are some who find it hard to offer at reduced price because of brand. There are others who reduce their price in the face of stiff competition. Then there are those who, while retaining their image, launch products that are branded but service a different segment of demographic. Thus, price plays an important role in a consumer’s behaviour. Place can also determine price. Factors like who the final consumer will be and what he or she looks for must be considered. Where does a consumer look for in a convention centre? Are the major needs of the client met by the infrastructure available? Distance is also considered to be an issue that determines choice. No client would think of going beyond his/her convenience to book a hall. Distances also determine transportation costs, which could cause price escalation for the client. Distribution gets affected, and time and money is lost. So, choice of place is also important.
Promotion relates to publicity. Promotion can take many forms: advertising in various media, events, press releases, trade shows, brochures, flyers, internet and so on. This is where a company focuses on projecting itself and its product. Promotion creates awareness, the first step to sales.
Thus, branding and 4Ps play a vital role in consumer buying rationale (Volker.M, 1998).
In any business the marketing environment, production costs, logistics, distributor/dealer margin and the manufacturer’s margin are considered before a product is priced to the consumer. All these are directly influenced by the 4 Ps of marketing. Far Horizon, a well structured organisation is in the process of expanding its activities to incorporate a convention hall that can accommodate 850 people in a single sitting; a first of its kind in that community.
Far Horizon already has a full-fledged catering wing that is operational and serves breakfast, lunch and dinner to the local inhabitants. The idea of the proprietorship organisation is to project Far Horizon as a one-stop solution for any activity like weddings, business meetings, conferences, trade shows and so on. Once the convention centre becomes fully operational, it will enjoy complete ascendancy in business against a rather tame competition. However, there are factors that can determine the success of a business in any environment; the factor of the 4 Ps.
Identify three factors that influence product strategy decisions: Size, Facilities, and Availability. The size of the convention centre will be bigger than any existing hall available in the community, and can cater to any kind of programme. The availability of a full-fledged restaurant and bar makes food and beverage ordering convenient, without requiring external catering services. The hall is large enough to accommodate any number of people in one sitting and its availability round the year will make it a very attractive proposition to time-conscious customers.
Identify three factors that influence place strategy decisions: Proximity, Location, and Connectivity. Far Horizon is located close to the airport and is thus a little far from the commercial hub of the community. However, because of its existing restaurant and bar, it has its share of regular customers, for whom distance may not be an issue. The idea to tie-up with the local transport authorities may be short-sighted, but customers who require larger halls with more facilities will be inclined to travel a little more to minimize responsibilities.
Identify three factors that influence promotion strategy decisions: Word-of-mouth communication, events and media presentations. Far Horizon will get that distinct advantage that its competitors lacked from their regular customers. Customer’s feedback is a sound way to project an organisation for its products or service. How many times have one seen friends influence the buying behaviour of others. The same principle applies in this case too. Events taking place at such venues as Far Horizon will attract immediate attention, because it is located close to the airport for one, and because many people visit this place for refreshments or drinks frequently. Media advertisements are very convenient to attract those people who have never ventured to Far Horizon previously. The sparsely populated community will get to know a lot more through media coverage.
Identify three factors that influence pricing strategy decisions: Logistics, Quality and Quantity. Far Horizon will beat competition through its sheer size and facilities. None of its competitors come close enough to even challenge it for its facilities. Because it is close to the airport, the convention centre can attract outsiders to it instantly. The price for organizing shows, events, weddings, conferences are minimized because of its volume of intake. The logic behind such a move to make a big hall is to minimize prices through volume sales. Catering costs will come down drastically as well, and so too would the cost of beverages. Far Horizon will be able to capitalise on the service of space, food and beverages. The client will benefit immensely; enjoy better facilities at lower costs and maintenance.
Volker.M, Business basics for Engineers, Marketing & 4Ps of Marketing, www.sfu.ca, Referenced on 09.05.2007