The five Ps
Price
Customers expect value for money. However, this does not necessarily mean that your product or service should be the cheapest available. The price of a product or service can convey a message.
Example
Businesses may price products with a A price set higher than competitors to suggest higher quality. (eg higher than their competitors) to suggest that their product has a higher quality.
Other pricing strategies
- Bundle pricing - Bundling groups of products or services together at a reduced price. BOGOF (Buy One, Get One Free) is an example. Customers may think they are getting a bargain.
- Price skimming - Setting an initial high price, and then slowly lowering the price to make the product or service available to more of the market. Customers may see the price drop over time and be more likely to buy the product or service.
- Price penetration - Setting a low price to increase sales. Once sales have reached a certain level, the price may be increased. Customers may have bought the product or service at the cheaper price, but because they like it, they continue to buy it at the more expensive price.
- Competition pricing - Setting a price that is the same as the competitors. Customers may then look for other elements when making a decision of which option to buy.
Product
A successful product or service must meet the needs of customers. It must work, fulfil a need, and meet customer expectations.
Placement
The placement of a product or services means where you can buy it from.
The product or service should be available from where the target customers find it easiest to shop. This could be from a high street store or an online shop.
Promotion
Promotion techniques are ways to communicate to customers about products and services. This could be in an informative manner or a way that appeals to customers鈥 emotions, eg the images that are used may tempt you to buy the product or service, as they look so inviting.
People
People are essential to businesses. Having the right people selling a product or service is vital, eg customers will expect a hairdresser to have well cut and styled hair.