The 4 P’s of Marketing
By Rob James
Fortunately, marketing is not an exact science. It is
like the sport of fishing where you continually fine
tune your skills to catch more fish. The 4 p’s of the
marketing equation: Product, Price, Place and Promotion allow you to tweak your marketing mix and
are each a part of every stage in the life cycle of the
product. With much prayer, Holy Spirit guidance,
and market research, you will be able to fine tune
your marketing plan.
The most critical P is product (we have previously discussed the proper product design in our last
article when we “talked to the fish”, Fall Issue 2015).
If you design your product correctly, you can sell it
at any price, anywhere, without any
promotion; for example, the Chrysler PT (Personal Transport) Cruiser
introduced in 2000.
This product was so well designed that car dealers
were able to charge more than the suggested sticker
price to buy one, customers were willing to travel
miles to get one, and no promotions were necessary to sell one. In fact, local PT Cruiser clubs were
formed by customers. These clubs built brand awareness and increased demand for the manufacturer.
This vehicle was the result of some great marketing
research. Chrysler discovered a demand for a small,
affordable, and retro automobile for personal transport (PT).
Products go through 4 stages as they are marketed. The first stage is the introductory stage (when
your product hits its breakeven point, your costs
equal sales). During this stage marketers adjust some
of their 4 P’s to fit most of their customers’ demands.
We also refer to this as the “customization” stage. We
are searching for the most profitable mix that satisfies customer and business needs by tweaking the 4
P’s. During the introductory stage, base model PT
cruisers were selling for over $20,000 (they ended up
selling for less than $15,000 nine years later in the
decline stage).
The next stage is growth (when our sales are
increasing at an increasing rate). This is our most
profitable time. We are developing a better feel for
our customer demands and are developing a repeatable (standardized) operational process. Our aim is
our highest margins and still
keep the customer buying
our product.
The next stage is the mature stage (when our
sales are increasing but at a decreasing rate). Our
profits begin to decrease as more competitors enter
the market forcing our prices to drop. We also refer
to this stage as the “standardization” stage. It is time
to make major changes to the product (Convertibles
and Turbo Charged Engines) to keep it from slipping
into the decline stage.
The next stage is the decline stage (when our sales
are decreasing at a decreasing rate). Your product
is dying. It is time to make value adjustments to the
product (color changes, special models, and trim
options). Ask the customers (your fish) what they
want in order to buy one (take the bait). It is also
time to lower the price, change the place (rental
cars), and promote the car with incentives (A/C free)
to survive.
The purpose of the last two stages (maturity and
decline) of 4 P adjustments is to rejuvenate the product back to the growth stage. From cradle to grave,
the PT cruiser had a nine year life cycle.
In our next entrepreneurship article, we will
discuss our second business development issue, legal
concerns. Nothing can close a business faster than
not paying attention to the many laws that govern
business development.
About the author:
Rob started Rob James & Associates in 1978.
He has co-authored a textbook entitled A Guide to Facilities Planning.
Rob worked as a Manager for SEARS and taught International Graduate Marketing Courses for Keller Management School. He and Judy
own and operate a boat business and a wellness center. You may send
him questions about starting or enlarging a small business at [email protected].
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