The Four Ps of Marketing: Product, Price, Place, and Promotion

question

Marketing
answer

The process of planning and executing the conception, pricing, promotion, and distribution of goods and services to facilitate exchanges that satisfy individual and organizational needs.
question

Market Segmentation
answer

The process of dividing the total market into several groups whose members have similar characteristics.
question

Target Marketing
answer

Selecting which market segments and organization can profitably serve.
question

Geographic Segmentation
answer

Dividing a market into geographic regions (e.g., Northeast, Midwest, South, West, North, East; city or county size; and urban, suburban, or rural density).
question

Demographic Segmentation
answer

Dividing a market into demographic categories, such as age, income, or education level (e.g., gender, age, education, race, nationality, life stage, income, household size, and occupation).
question

Psychographic Segmentation
answer

Dividing a market using the group’s values, attitudes, and interests (e.g., personalities, values, lifestyle).
question

Benefit Segmentation
answer

Dividing a market by determining which benefits of the product to promote (e.g., comfort, convenience, durability, economy, health, luxury, safety, and status).
question

Volume Segmentation
answer

Dividing a market by usage (volume of use). (e.g., usage and loyalty status.)
question

Niche Marketing
answer

The process of finding small but profitable market segments and creating products for them.
question

Relationship Marketing
answer

A marketing strategy with the goal of keeping individual customers over time by offering them products that exactly meet their requirements.
question

Marketing Management
answer

The process of overseeing all the aspects of marketing a particular product or service for the purpose of attracting and retaining customers.
question

Marketing Mix (The Four Ps)
answer

Product, Price, Place, and Promotion. The four ingredients of a marketing program.
question

Marketing Research
answer

The analysis of markets to determine opportunities and challenges and to find the information needed to make good marketing decisions.
question

Primary Research
answer

Research collected firsthand by a marketer.
question

Focus Group
answer

A small group of people who meet under the direction of a discussion leader who tries to understand their opinions about a product.
question

Secondary Research
answer

Research collected by a marketer that has already been compiled by others and published in print or online.
question

Total Product Offer
answer

Everything consumers evaluate when deciding whether to purchase a good or service.
question

Components of A Total Product Offer
answer

Reputation, price, brand name, convenience, package, store surroundings, service, internet access, buyer’s past experience, guarantee, speed of delivery, and image created by advertising.
question

Product Differentiation
answer

The creation of real or perceived product differences.
question

Convenience Goods and Services
answer

Sometimes called consumer products, are products the consumer wants to purchase frequently and easily, such as milk, ice cream, lottery tickets, soft drinks, bread, and magazines.
question

Shopping Goods and Services
answer

Products a consumer buys only after comparing value, quality, price, and style from a variety of sellers. Shopping goods and services are sold largely through shopping centers where consumers can make comparisons. Examples include clothes, shoes, appliances, and auto repair services.
question

Specialty Goods and Services
answer

Consumer products with unique characteristics and brand identity. Because these products are perceived as having no reasonable substitute, the consumer puts forth special effort to purchase them. Examples include Rolex watches, expensive wine, jewelry, expensive cigars, and expensive handbags. Also services provided by medical specialists or business consultants would fall into this category.
question

Unsought Goods and Services
answer

Products that consumers are not aware of, or have not necessarily thought of buying, but suddenly find they need them to solve an unexpected problem. Examples would be car towing services, burial services, and dental work.
question

Industrial Goods
answer

Products used in the production of other products — (e.g., raw materials, major equipment, accessory equipment, components, process materials, maintenance items, and business services.)
question

Brand
answer

A name, symbol, or design (or combination thereof) that identifies the goods or services of one seller or group of sellers and distinguishes them from those of others.
question

Brand Equity
answer

The combination of factors, such as awareness, loyalty, perceived quality, images, and emotions, that people associate with a given brand name.
question

Brand Loyalty
answer

The degree to which customers are satisfied, like a brand, and are committed to future purchases.
question

Loss Leaders
answer

When a store advertises certain products at or below cost to attract people to the store.
question

Product Life Cycle
answer

A theoretical model of what happens to sales and profits for a product class over time.
question

Price
answer

Price setting is among the most difficult challenges of marketing. A product’s price needs to reflect its quality, brand, and image, and it must be high enough to ensure profits but not so high that people are unwilling to pay for it.
question

Target Costing
answer

Designing a product so it satisfies customers and meets the profit margins desired by the firm.
question

Price Leadership
answer

The procedure by which one or more firms that dominate a market set pricing standards that all the others follow.
question

Break-Even Analysis Strategy
answer

Pricing a product based on how many you need to sell in order to make a profit.
question

Skimming Price Strategy
answer

Pricing a new product high to make optimum profit while there’s little competition.
question

Penetration Strategy
answer

Pricing a product low to attract many customers and discourage competition.
question

Everyday Low Pricing (EDLP) Strategy
answer

Setting prices lower than competitors and then not offering any special sales.
question

High-Low Pricing Strategy
answer

Setting prices that are higher than EDLP, but offering many special sales where prices are lower than those of competitors.
question

Bundling Strategy
answer

Grouping two or more products together and pricing them as a unit.
question

Psychological Pricing (Odd Pricing) Strategy
answer

Pricing goods and services at price points that make the product appear less expensive than it is.
question

Place
answer

In marketing, the process of getting products to the places where they will be sold.
question

Marketing Intermediary
answer

An organization that assists in moving goods and services from producers to industrial and consumer users.
question

Channel of Distribution
answer

A set of marketing intermediaries, such as wholesalers and retailers that join together to transport and store goods in their path (or channel) from producers to consumers.
question

Cost-based Pricing Strategy
answer

Developing a product’s price based on what it will cost to produce it and still maintain a profit. This is a flawed strategy, because in the long run, the market, and not the manufacturer, will decide what the product’s price will be. Example: Toys.
question

Demand-Based (Target Costing) Pricing Strategy
answer

Designing a product so it satisfies customers and meets the profit margins desired by the firm, with price being an input of the product development process (not an output). Example: A family sedan automobile.
question

Competition-Based (Price Leadership) Pricing Strategy
answer

Pricing a product based on how competitors price their products — either at or below their prices. Price leadership is the procedure by which one or more firms that dominate the market set pricing standards that all the others follow. Example: Airlines.
question

Break-Even Pricing Strategy
answer

Pricing a product based on how many you need to sell in order to make a profit according to the Break-Even Point (BEP) formula: Total Fixed Cost divided by Price of 1 Unit – Variable Cost of 1 Unit. Example: Candles.
question

Skimming Pricing Strategy
answer

Pricing a new product high to make optimum profit while there is little competition. Example: Televisions.
question

Penetration Pricing Strategy
answer

Pricing a product low to attract many customers and discourage competition.
question

Agents/Brokers
answer

Marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange but don’t take title to the goods.
question

Wholesaler
answer

A marketing intermediary that sells to other organizations.
question

Merchant Wholesalers
answer

Independently owned firms that own the goods they handle.
question

Retailer
answer

An organization that sells to consumers.
question

Rack Jobbers
answer

Wholesalers that furnish racks or shelves full of merchandise to retailers, display products, and sell on consignment.
question

Cash-and-Carry Wholesalers
answer

Wholesalers that serve mostly smaller retailers with a limited assortment of products.
question

Drop Shippers
answer

Wholesalers that solicit orders from retailers and other wholesalers and have merchandise shipped directly from a producer to a buyer.
question

Category Killer
answer

A store that offers a wide selection of goods in a specific category at competitive prices.
question

Promotion Mix
answer

The combination of promotional tools an organization uses.
question

Advertising
answer

Paid, nonpersonal communication through various media by organizations and individuals who are in some way identified in the advertising message.
question

Product Placement
answer

Putting products in TV shows and movies, where they will be seen.
question

Personal Selling
answer

The face-to-face presentation and promotion of goods and services.
question

Public Relations (PR)
answer

The management function that evaluates public attitudes, changes policies and procedures accordingly, and executes a program of action and information to earn public understanding and acceptance.
question

Publicity
answer

Any information about an individual, product, or organization that is distributed to the public through the media and is not paid for or controlled by the seller.
question

Sales Promotion
answer

A promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities.
question

Sampling
answer

Letting consumers have a small sample of a product for no charge.
question

Event Marketing
answer

Sponsoring events such as rock concerts or being at various events to promote your products.
question

Viral Marketing
answer

The term used to describe everything from paying people to say positive things on the Internet to setting up multilevel selling schemes whereby consumers get commissions for directing friends to specific Web sites.
question

Word-of-Mouth Promotion
answer

A promotional tool that involves people telling other people about products that they have purchased.
question

Integrated Marketing Communication
answer

Combines all the promotional tools into one comprehensive and unified promotional strategy.

Get instant access to
all materials

Become a Member