The marketingmix is a business tool used in marketing. There are different concepts of tool ranging from four to seven P’s. Here, we describe the concept of the five P’s; price, product, place, promotion and people.
The price mechanism is possibly the oldest marketing mechanism that exists. When the price rises, the demand will lower. Lower the price and sales will rise. The consumer still seems sensitive to discounts, clearance and two for the price of one. To most companies, on the other hand, it does not seem feasible nor desirable to compete with price long-term. The competition is fierce and margins are small. Also, pricing has an irrational side to it. Sometimes it is about image and branding as well, with people thinking: something that is expensive must be good.
A product is seen as an item that satisfies what a consumer demands. It is a tangible good or service. A good product sells itself. This might have been true before, but more and more quality products are being made. Because quality is no longer distinctive, manufacturers focus on differentiation: in design, making minor changes, gadgets and accessoires. So that the product remains unique to a certain extent.
The place, or distribution, refers to providing the product at a place which is convenient for consumers to acces. Various strategies such as intensive distribution, exclusive distribution and franchising can be used by the marketer. Cheap, little distinctive products generally have intensive distribution: they are for sale anywhere. For exclusive products the opposite is true.
If there are hardly any bad products, competing by price is virtually impossible. If everything is for sale on the internet and the labor market is tight, then what distinguishes a product? The only marketing tool still available is promotion. Promotion is anything that one can do to make a product attractive and increase in value by communication. Promotion is the mechanism in the marketingmix where one can use creativity to market the product.
These are the employees that execute the service. Friendly waiters in restaurants, energetic executives, CEO’s, reliable and competent consultants ensure that customers remain satisfied. Investing in the quality of personnel is therefore seen as essential for the long-term marketing promotion.