The Four P’s
The 4 P’s are Product, Place, Price and Promotion. The 4 P’s are important because they help businesses sell their product effectively and successfully, they are the most important part of a marketing campaign. If the business doesn’t use the 4 P’s for their product it has a very low chance of succeeding.
The product is the good or service you are offering for sale, use or consumption, in our case it’s a chocolate bar. Businesses have to sell as many products to the widest range of people possible and to do this they need to design the product as different as possible or make them seem different to their rivals e.g. Mars & Yorkie they are both handheld bars but a Yorkie is in break off chunks and Mars isn’t. If you want to sell your product successfully you must develop the right product for the right market segment. To do this you need to select whether you will aim it at young children, the elderly, male, female or based on the consumers income.
Once you have selected one of them you can start designing your product for that segment, e.g. if you were designing a chocolate bar for the female market you would make it light, easily breakable bits and smooth or vice versa for the male market. The Packaging on a product is also very important because it has to grab the eye of the segment in the market you have aimed it at and look appealing, for example a male chocolate bar has bold writing and the wrapper colour is usually blue black or a similar colour to it e.g. Yorkie. A female chocolate bar will be a lighter colour to the male bars and the brand name will be in joined up writing e.g. Cadburys flake.
The packaging on the product can make it easier to store, for example the boxes used to display Cream Eggs are cosmetic because they grab the eye of the consumer, and they are functional because they can also keep storage space to a minimum when being transported or kept in the store room. The boxes used to store the product are usually square not round so they use the least space. The packaging can also can extend its shelf life depending on how it is wrapped it can either be foil wrapped like the old Kit Kat or with plastic wrapping like the new Kit Kat which supposedly keeps it fresher and cooler for longer. It could be an Easter egg style box, which has the chocolate egg foil, wrapped and then a large amount of cosmetic boxing around it this makes the product more appealing to the consumer.
This refers to the method of distribution and the decisions involved in getting the product from producer to consumer. There are several ways of getting products to the customer called channels of distribution: Channel 1.
Small Retailer (Corner Shop, Newsagent)
Each channel adds value to the product this means that the more channels used to get the product to us the more expensive the product is to us the consumer. This is so every business makes a profit out of the product. Also with a small retailer you get a more personal service.
Large Retailer (Supermarket)
As this channel is shorter than channel 1 it could be a little bit cheaper to the consumer and it could be even cheaper if the large retailer decides to buy in bulk which is very likely or the supermarket could just be making a larger profit and selling the product at the same price as the smaller retailers.
It is very unlikely that the customer will travel very far to buy some chocolate.
Wholesaler (Makro, Matalan, etc)
A wholesaler is unlikely to sell a lot of individual chocolate.
In a shop the chocolate will in most cases be at the front next to or near the till, this is because when people are paying for their other things they will see the chocolate and pick it up. The shops or supermarkets place the chocolate at the front near the till because chocolate is an impulse buy product this means that you don’t plan to go out and buy the chocolate you just buy when your in or near a shop. Young children also play a big part in the placing of the chocolate in a shop; you will notice that it is at eyelevel of a small child in most supermarkets and some corner shops etc. This is because small children will see the chocolate and start pestering and keep on pestering who ever they are with. The person who they are with will most likely give in because they don’t want to be shown up in front of the people behind them.
Pricing strategy revolves around the quality of the product, the desired image of your company, prices of competitive products, and the nature of the demand.
All chocolate bars like Mars, Snickers, Boost, etc are around 30p-35p this is because they all cost around the same price to produce. The chocolate bars are usually set around the same price as similar bars on the market. The manufacturers do this because there is not much brand loyalty to chocolate and if the price of your chocolate bar went up a lot then people would just start buying other products similar to yours. When manufacturers bring out a new product they often use a certain technique to help the product succeed increasing its market share.
The techniques are:
The firm may make the products price higher than it’s actual price if it has status appeal. This will help the firm make the money back they used in developing the product. The firm will bring the price down when more people start buying this product. I don’t think this would succeed on a chocolate bar because people are not prepared to pay too much just for a chocolate bar whether it is new or not. They might pay for a higher price chocolate bar if it was from Thornton’s because they may like to treat themselves to something a bit more upmarket.
When a chocolate bar first comes out the firm will give it a lower price to its competitors to try and give it a high market share. When the firm decide that a lot of people are buying their product they will increase the price and hopefully people will keep buying the product. You often see this used on collectors magazines, Nestle have also used this method. I think this is the best way of introducing new chocolate bars to the market, but when you have increased the price people may not be prepared to buy your chocolate bar anymore.
This way is used by businesses selling a linked product (a product that needs two parts to make it useable) e.g. if a business were to sell a phone for a low price, but it doesn’t include a charger, the firm could then charge more for the charger than they did for the phone. A part of the product may be sold at a very low price, but once bought the other part is needed which could be quite expensive compared to the first part. This wouldn’t work at all for a chocolate bar because there is only one part to it.
Promotion is the key element in telling consumers that your product exists, informing them about it and about why they should buy it.
Promotion is also a good way of telling the public that they need or want your product.
Promotion is not just advertising there are many ways of advertising your product for example: Multibuy this is where you buy 2 chocolate bars and you get the 3rd free.
Sponsorship is when your chocolate bar sponsors another product, business, television program, film etc. When launching a product you could give the buyer % extra free, this will include more chocolate than you would usually get with the bar. You could also have a limited edition this would be something different like the wrapper or the shape of the bar and would only be available for a certain amount of time. Tokens are another way to get more people to buy your product. If the buyer collected a certain amount of tokens they would receive a free gift or something similar, this would not be very good on a chocolate bar because their firm would not be able to offer a decent free gift unless the buyer collected a lot of tokens.
Advertising is used by a lot of firms to get their product noticed and widely know about, you could advertise on the T.V. but for a high price, this is the most effective of all the others because nearly the whole population has a T.V. in their house. Advertise on the radio which won’t get your bars as widely know as the T.V but still will help sales. You could sponsor an up and coming event with your product or a television program like Cadburys sponsoring Coronation street. You can advertise in a regional or national paper which is an expensive option or you could just advertise in a local corner shop which is the cheapest option at just ï¿½5 for a card in the window, this will probably be the least effective of them all. I would probably use the T.V. or Newspaper advertising although they are highly priced they will be the most effective in advertising my chocolate bar. I would also have a limited edition bar available for a short amount of time.