5 P's of Marketing

A successful marketing plan means selling the right product at the right place with the right promotion and the right price. And, of course, you need the right people.

Product

May be a tangible item or a service. The specifications for the product should include such things as brand name, styling, features and functionality, packaging, quality, warranty and after-sale service.

Place

Refers to distribution, or how the products will get to a customer.
Distribution may be direct or indirect. For a tangible product, distribution issues include channels*, inventory management, warehousing and distribution centers, order processing, and logistics. For a service, considerations include the type of sales force and how they will reach potential customers.

Promotion

Refers to the communication of the information about the product to potential customers. Among the issues for consideration are advertising and media selection, sales promotions, and public relations. Cost, timing and the time taken to recover promotion expenditure are important factors in the decisions. Whatever you choose, be sure to have a way to measure success.

Price

Can be determined on a cost-plus or competitive basis.

<!--Cost-plus pricing is based on adding up the cost of production and adding an acceptable profit margin. The risk is that it may result in a price which is higher than people are willing to pay.

<!--Competitive pricing is based on the price of other similar goods in the market. The risk is that the price may be too low to provide an adequate profit for the business.

Either way make sure profit margins are adequate to run the business. Depending on product, price determination may include wholesale versus retail, market share goals, early pay discounts, seasonality, price flexibility and bundling. Is premium price justified? Do you want to sell your products at a particularly low price for a short while, so that they get established, after which you can increase their price. (This is known as “Loss leading”)

People

This “fifth P” is sometimes added as an organization is only as good as its people. For best results, be thoughtful about the skills needed for each position, salaries, training, development opportunities, and hiring practices. Make sure your workforce is well balanced.