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Question 2. Define each of the four Ps. What insight might a firm gain by considering the four Cs rather than the four Ps? Answer Price is one of the elements in the marketing mix and also an important aspect for the seller and the buyers. For consumer, price is the value whereby they have to pay with cash in order to exchange products and services. Meanwhile for seller, price is the source of the income gained through sales. The price is shown in everywhere, for instance taxi fare, premium insurance, parking fine, rent for apartment, tuition fee and income tax.
Regardless how is the price shown, it is the exchange value for the consumer and transaction for the business. Consumers are able to make decision for determining how much of the utility they should get from purchases based on the price. Price also indicates the quality of the products. Expensive price for the famous brands like Rolex and Christian Dior is set because of the image of the high quality products, whereas cheap price is set for the low quality of the products. Second element in the marketing mix is promotion.
It is known as the communication of the marketing which is the process to influence someone by sharing ideas, information and feeling. Any effort made by the seller to communicate with the target consumer is also known as promotion. Actually, each element in the marketing mix conveys message to the consumer. For example, the packaging of the products gives impression to the consumer. In transporting perfumes to the shopping centres (place) with the price of RM100 (price) and promote it in the women magazine (promotion), the message has been conveyed.
Therefore, all elements in the marketing mix must be done correctly in order to give maximum impact to the consumer. Third element in the marketing mix is product. It has the characteristics that can be offered to the market, such as attractive, can be owned and used; lastly it must have psychological benefits and physical benefits that can satisfy consumer’ needs. Products also have the characteristics that cannot be seen and can be seen. Examples for the characteristics that cannot e seen are efficiency and effective, meanwhile for the characteristics that can be seen are colour, size, weight and price. Both of the characteristics are needed by the consumer. Products not only refer to the physical things like ball but it includes services like hair salon, travel and campaign. In short, definition of products shows the importance of emphasizing on what the consumer want to buy and not what the seller can sell in the market. Last element in the marketing mix is place. Place is also known as channel, distribution, or intermediary.
It is the mechanism through which goods and/or services are moved from the manufacturer/ service provider to the user or consumer. Most consumer goods are purchased from retailers, who purchase them from a wholesaler/distributor, who purchase them from the manufacture. If the goods were imported there might be more merchants in this distribution chain. Sometimes, this distribution chain can be bypassed or leapt over. For example a consumer is likely to want only one variant of your product and expect to purchase it immediately.
A retailer is likely to want limited stock of a number of variants and not expect to pay for 60 days. The four Cs consist of cost, communication, consumer and convenience. First, by considering cost rather than price, a firm has to realize that price – measured in dollars – is one part of the cost to satisfy. If they sell hamburgers, for example, they have to consider the cost of driving to the restaurant, the cost of conscience of eating meat, etc. One of the most difficult places to be in the business world is the retailer selling at the lowest price.
If they rely strictly on price to compete, they are vulnerable to competition – in the long term. So a firm has to think of cost as something customers pay, not the price that they charge. This simple adjustment once again opens up a whole new way of thinking about sales and marketing. When they define marketing mix cost, they tune into the customer dilemma of deciding how to spend limited money to satisfy unlimited wants. The motivation in going to market should not be to maximize the gain but to maximize customer value.
Therefore, they should ask how they can provide more for the same cost to the customer instead of asking to make more profit from a product. Next, they have to consider the communication instead of promotion. Promotion is manipulative because it can be done by seller, but communication requires a give and take between the buyer and seller. A firm must be creative in order to make any advertising “interactive”. The most important thing is they need to listen to their customers. Promotion hearkens back to the day of mass marketing which does not work anymore.
Just like a firm cannot simply build a “good product” and expect people to buy it, so customers no longer believe everything they say at face value. Instead of virtuous pronouncement about how good the product or service is, customers today seek to be engaged and have meaningful interactions with a firm. They must therefore strive for two-way communication and building relationships. In addition, by considering product rather than customer, a product is something a firm makes which people come and buy.
However, today, a firm can no longer succeed by making what they want and must instead find out what customers want. Focusing on customer value allows them to reset their perceptions around what it is they are creating and bringing to the market, be it a product, service or some other value. Everything begins and ends with their customer and they exist to serve customer needs. Value is what their customer is concerned about, not a firm, their fabulous product or anything else they do. It is also what they should seek to engage their customer with.
They cannot develop products and then try to sell them to a mass market. They have to study consumer wants and needs and then attract consumers one by one with something each one wants. Lastly, they must think of convenience to buy instead of place. They have to know how each subset of the market prefers to buy – on the Internet, from a catalogue, on the phone, using credit cards, etc. The day is not far off when the majority of shopping will not take place in shops or through the traditional distribution channels of business.
Their customers today are governed by purchase when, where and how it is convenient to them. Thinking about convenience not only allows them to open up to newer ways of connecting with customers and distributing products, but helps them shift into the mind set of providing an optimum overall experience for customers. To define marketing mix in terms of convenience reminds them that customers today are very busy and have many choices. It is no longer their right as a business owner but a privilege when customers choose them. Make it as easy as possible for customer to do so.