The Marketing Mix 5 Ps: Choosing the Right Strategies for Business Success

The Marketing Mix 5 Ps is a significant tool to help you select and create the right marketing strategies for your business. It forces you to think about which areas of your business you can change or improve on, to help you meet the needs of your target market, add value and differentiate your product or service from your competitors. The 5 areas you need to make decisions about are: PRODUCT, PRICE, PROMOTION, PLACE AND PEOPLE. Although the 5 Ps are somewhat controllable, they are always subject to your internal and external marketing environments.

1. Product

The product or service element refers to what you are offering as a whole to your customers. Product decisions include functionality, branding, packaging, service, quality, appearance and warranty terms. When thinking about your product consider the key features, benefits, and the needs and wants of customers. Customers need to understand the features, advantages, and benefits that can be enjoyed by buying goods or services.

2. Price

The price element refers to the way you set prices for your products or services. It should include all the parts that make up your overall cost, including the advertised price, any discounts, sales, credit terms or other payment arrangements. Your pricing will also depend on your businesses position in the market. For example, if the business is advertised as a high-quality provider, the product pricing should reflect that.

Tiered Pricing Strategy

Tiered pricing as a strategy is used by companies to provide their products/services at different price points by limiting or expanding the features/functionalities corresponding to each tier price. This model is a great way to incentivize your customers; it helps you push your customers to buy more and qualify for discounts. To understand the implementation, consider these tiers:

• Basic Tier: The basic model will provide your customers with the essential features at affordable pricing.
• Standard Tier: The standard model is usually a combination of basic features and additional value.

In a tiered pricing model, you move to the next tier only when one tier is completely filled. For instance, if you sold 60 widgets, you calculate your total like this: [($20x10) + ($10x20) + ($5 x 30)] = $550.

Demand-Based Pricing

Demand-based pricing, also known as demand pricing, is a pricing method in which the price of a tour or activity changes based on customer demand. In other words, an operator increases the price when demand is high and decreases it when demand is low. As demand for an experience or product changes, so does the perceived value of that service or product. With this pricing strategy, you can adjust your prices to ensure your company makes money year-round.

3. Promotion

Promotion refers to all the activities and methods you use to promote your products/services to your target market. It includes sales, public relations, direct marketing, advertising, sponsorship and social media. Since promotion costs can be substantial, it is sensible to conduct a return on investment analysis (ROI) when making promotion decisions. You need to establish who your target market is, what media do they consume, and how you will gather the information that shows how the promotion has worked.

4. Place

The place element refers to how you get your product or service to your customers at the right time, at the right place, and in the right quantity. It includes distribution channels (e.g. via a shopfront, online or a distributor), location, logistics, service levels and market coverage. If you’re looking to grow your business, you might consider changing or expanding the way you sell your products and services, such as expanding the business online.

5. People

The people element refers to your customers, yourself and your staff. You need to consider both your staff and customers if you’re thinking of growing your business. It includes understanding what your customers’ needs and wants are, setting targets and measuring your customer service levels so that you attract and keep loyal customers. You’ll also need to consider staff training so they have the skills to offer the best experience and meet customer expectations.