Another vital part of building a business plan is to determine the marketing mix that you are planning to use. The marketing mix is the balance of marketing techniques required for selling the product. Its components are often known as the four Ps:
- Price - the price of the product - particularly the price compared to your competitors - is a vital part of marketing. There are two possible pricing techniques:
- Market skimming - pricing high but selling fewer
- Market penetration - pricing lower to secure a higher volume of sales
- Product - targeting the market and making the product appropriate to the market segment you are trying to sell into
- Promotion - this may take the form of point of sale promotion, advertising, sponsorship or other promotions.
- Place - this part of the marketing mix is all about how the product is distributed. Current trends are towards shortening the chain of distribution.
There are those that now refer to another 3Ps bringing the total to 7! The other three are people, physical environment and process.
- People - this stresses the importance of people in the marketing process; often the first point of contact with any business is a human being - the impressions given by this initial contact may be very important. In addition, the role of human beings in developing customer relations is seen as increasingly important especially in a knowledge driven economy.
- Physical Environment - this refers to the importance in making the physical environment related to the product or service as welcoming and as reflective of the business as possible - for example, look at the showrooms of car dealers - many are very well lit, stylish in terms of furniture and decoration and include seating areas, coffee making facilities, newspapers and children's play areas.
- Process - the process by which the product is either manufactured or passed on to the final user. This might include the extended use of ICT facilities to speed up ordering, delivery, etc.
- Source-http://www.bized.co.uk/virtual/bank/business/planning/marketing/step2.htm
