Each of the four Ps has its own role and tools to contribute to the marketing mix:
- Product: The goods and/or services offered by a company to its customers Product’s tools: variety, quality, design, features, brand name, packaging, services
- Price: The amount of money paid by customers to purchase the product. Price’s tools: list price, discounts, allowance, payment period, credit terms
- Place (or distribution): The activities that make the product available to consumers. Place’s tools: channels, coverage, assortments, locations, inventory, transportation, logistics
- Promotion: The activities that communicate the product’s features and benefits and persuade customers to purchase the product. Promotion’s tools: advertising, personal selling, sales promotion, public relations
One of the most challenging aspects of product marketing and launching a new product is developing a product marketing strategy. In order to succeed in product marketing and sales you must understand in depth the customer’s psychological needs.
Right price is the key determinant of decision making for customers to purchase a product. Therefore it is too hard to get it right. The demand automatically will reduce if the price it is too high and if it is too low the sales volume may not generate enough revenue to cover the costs.
Thus, it is very important to establish and measure how much the target market can be able to pay for the product. Of course pricing may change depending on the focus of the selecting strategies, it is the most adjustable of all marketing decisions. For example, when promoting a new product, a great strategy is to lower the price in a short time period, in order the customers to try the product and stimulate the interest. Another situation is when we want to stimulate demand. However, researchers discovered that higher price, is a great tool for maximizing revenues. Strong brands like Starbucks, uses the strategy of increasing prince.
In Atlantic Case Study are outline four alternatives for choosing the right price, we used all of them in order to decide for the right price.
- Stick with company tradition by charging only for hardware and give the PESA software tool away for free
- Charge a price equal to what the customer would pay for four Ontario Zink servers.
- Charge a price based on a cost-plus approach to pricing PESA (based on PESA development costs).
- Charge a price based on value-in-use pricing.
Last year, I sow this fantastic TED talk by Seth Godin: “How to get your ideas to spread,” and I think it is still worthy to share it.
Seth Godin says: the best strategy to succeed is “being remarkable.” Customers are overwhelmed by advertising, we have to discover a new, unique, remarkable way to market our product/service. This is the only tool for increasing the sales and be successful, by offering something remarkable, not very good, because this is not going to work.