Price is one of the most important variables for the customer when choosing one item over another. At the end of the 1940s, marketing expert Jerome McCarthy introduced the four cornerstones of the Marketing Mix: Price, Product, Place and Promotion.
Therefore, in order to design any effective marketing strategy, professionals had to take into account these four attributes. Over time, the definition of Marketing Mix evolved to four C’s (Consumer, Cost, Communication and Convenience) and with it the businesses strategies.
Marketing Mix elements
As we previously explained, in the first definition of Marketing Mix, we found 4 main elements for the execution of a marketing strategy.
Product
It is the central element of any strategy and responds to the need of the consumer. It is a wide concept that is not limited to the article itself, but to all the factors that accompany it: size, brand, packaging, design… When designing the product, it is necessary to think about who it is aimed at, what need it is going to meet, what values it is going to transmit, as well as taking into account technical aspects such as the product’s life cycle.
Price
This variable refers to the amount of money a user is willing to pay to get the product. To establish the price for your products, it is necessary to review the following factors:
- Variable and fixed product costs
- Profit margin, conversion rate and price index
- Elasticity of demand
- Market saturation
- Competitors’ prices
Types of pricing strategies
After collecting the aforementioned information it is time to design a proper pricing strategy for your product. Establishing a high price for your items is recommended when they are of high quality, you can then establish a premium pricing strategy, to improve your product’s brand and the image of your business.
If the goal for your company is to increase your market share, a penetration strategy is your solution. By dramatically lowering prices you will enter the market strongly and be able to capture customers from the competition.
Psychological prices are an option to take into account to sell your products at a good price and increase your profit margin. It is a way of setting prices by appealing to the irrational part of consumers, such as putting a product in an odd number or rounding up items.
Distribution
Another of the big Ps of the marketing mix is Place. It is the process in which the product reaches the consumer. The distribution channels can be:
- Direct: The path of the product goes from the manufacturer to the consumer.
- Short: The route of the product passes through the retailer before it reaches the consumer.
- Long: The route of the product passes through a wholesaler and a retailer before reaching the consumer.
- Double:This distribution channel involves an exclusive agent, in addition to a wholesaler and a retailer, before the product reaches the consumer.
Choosing the right distribution channel for your business will save you a lot of unnecessary expenses for your business. Keep in mind that the more intermediaries in the process, the higher the final prices will be.
Promotion
We understand promotion as all actions taken around getting to know the product we want to sell to potential customers. This is where the Advertising and Communication department comes in. To design an efficient strategy it is necessary to know the target audience you want to address. You can use big events to promote your products, as happens in World Congresses, as this is the best showcase to make yourself known.
The use of social networks is useful to reach the public you want to see your product. Thanks to the tools provided by the Internet you can choose specifically the niche in which you want to be advertised.
