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Unit 2 – 4Ps short version. Price. Set the Price Explain the strategies used (skimming, penetration, cost-plus) Does your price cover cost? How does your price compare to your competitors? Does your price link in with your marketing objectives?
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Price • Set the Price • Explain the strategies used (skimming, penetration, cost-plus) • Does your price cover cost? • How does your price compare to your competitors? • Does your price link in with your marketing objectives? • How will your pricing strategy affect the product’s image, does that link to your objectives and target market? • Will your product’s price change throughout its lifecycle.
Place Distribution Channel 1 • Direct Selling: Manufacturer to Consumer • This involves selling the product direct to the consumer. • Now very popular, it is the fastest channel and often the cheapest for the consumer. • The internet has made it easier for producers of goods to sell direct to the consumer. • Direct selling can also be done through door to door sales, TV shopping, telephone sales and mail-order catalogues.
Place Distribution Channel 2 • Indirect Selling (1): Manufacturer – Retailer- Consumer • The manufacturer uses a retailer to sell their product onto the consumer. • E.g. Large supermarkets buy goods direct from the manufacturer. • Retailers are shops who sell to consumers. • Retailers can be physical shops or online “e-tailers”
Place Distribution Channel 3 • Indirect Selling (2): Manufacturer – Wholesaler-Retailer – Consumer • This is a traditional method used for fast moving consumer goods • Wholesalers buy products cheaply from the manufacturer and sell them onto the retailer. • Wholesalers selling smaller quantities onto retailers is called ‘breaking bulk’. • Manufacturers have the benefit of not having to wait for the customer to buy the goods before they see the cash. • Wholesales make distribution cheaper as they don’t have to make lots of different separate deliveries. • Wholesalers can also store more goods than a retailer and therefore act as a storage cupboard.
Product • USP • Branding • Packaging • Quality • Desing
Unique Selling Point (USP) • Your product needs to differentiate from the competition. • A Unique Selling Pointis a feature or benefit that separates your product from its competitors. • This could be a lower price, a smaller version of the product, offering extra functions, or even simply producing a standard product in a range of colours or designs. • Your product needs a competitive advantage, if you do not have one; you will probably struggle to make your product seem attractive to customers. • Your product may be differentiated because of its unique design, brand image or reputation for reliability.
Branding • How important is the brand of your product? • Does having abrand benefit your product? • The style and branding of your products can be very important; it is one of the key methods of helping customers distinguish your product from the competition. • Branding can cover everything from the product logo and the colours of packaging to the style of advertising, if done effectively your product will become much more noticeable and distinguished from other similar products.
Design • Your product needs to be fit for purpose • Design not only affects the overall aesthetic qualities but also ergonomic properties, components and materials • Is the appearance of your product special in any way – shape, size, colour, taste. • Does it have a unique design feature – toilet duck! • An innovative design can help a product gain a sustainable competitive edge.
Quality • Does the quality of your product reflect its price? • Is your product durable – some products are expected to have longer life spans than others. • Will your product be reliable or will it need regular maintenance?
Packaging • Packaging is an important part of the product that not only serves a functional purpose, but also acts as a means of communicating product information and brand character.