Analytical Writing

How do the four P’s work?

The term “marketing mix” was first used in 1953 when Neil Borden took the recipe idea one step further and coined the term “marketing mix.” Elements of the marketing mix are often referred to as 'the four Ps'; product, price, place, and promotion. This is taught in basic marketing courses and widely known in fields beyond marketing. I learned this concept when I was an undergraduate student in Thailand and applied it in my own business in Texas. How can you apply ‘the four P’s’ in your business?

Product -- A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units. I think the product is the most important thing when doing business. Before I opened a Thai restaurant, I had to create the food menu. What do we have? It should be cosmopolitan Thai food that is well known. It should be easy for the customer to understand and order. You have to be confident your product is good. You must have a measuring standard for the food; it cannot fluctuate according to the chef and the quantity of food should be consistent. The product should be priced at a value the customer is willing to pay. In addition you must have a special menu for various events.

Price – The price is the amount a customer pays for the product. It is determined by considering a number of factors including market share, competition, material costs, product identity and the customer's perceived value of the product. The business may increase or decrease the price of the product if other stores have the same product. How can you do the product pricing? In my experience, before we price we need to know the cost of goods. Typically, the cost of goods should not exceed thirty percent of the price. Furthermore, we should explore the price from other stores with the same product. Before I opened the restaurant, I went to all kinds of restaurants in the area to check their prices. After that I could decide the pricing; not too expensive but not too cheap either. I said not too cheap because the people in that area of the city can afford restaurant food and this also helps select the quality customer-a customer likely to return. Another factor in pricing is the place.

Place – Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet. We should study the place both inside and outside. Outside, the location should be visible, prominent, and have adequate parking for customers. There should be a large sign or banner that is clearly visible. I always use a banner because the cost is not too expensive, though the cost of banner is different in different areas. In Texas you pay thirty dollars a month for a time period of ninety days for one banner. After that it is expired. If you want to do it again you have to wait for three months; they don’t allow consecutive banner periods.
Inside, it should be clean, organized, and tidy. It is very important because the health department will inspect every six months and the fire department will inspect every year. The place may be decorated to reflect seasonal changes. In Texas, I found that people like to go to large restaurants for special occasions. Therefore, on those occasions such as Valentine's Day, Mother’s day, etc. a small shop will not have customers. That shows if you want to open a restaurant in Texas, in my opinion you should open a big restaurant. This is one of the reasons I sold the business.

Promotion- Promotion represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements: advertising, public relations, word of mouth and point of sale. A certain amount of crossover occurs when using the four principal elements together. There are several objectives of promotion. In the beginning I wanted to make everyone in the area aware of my restaurant. I advertised with the Money Mailer. They are a company that does advertising via mail to homes. They put a lot of business handouts in the same envelope. I found it didn’t work because I never heard the customer say they heard about the restaurant from Money Mailer. After that we tried market competitive pricing like discount coupons, premium discount, happy hour, etc. that I passed out using hangers and flyers. It was very successful. I offered discount coupons and premium discounts. I noticed that more people preferred the premium discount because of differences in lifestyle. Before you launch the coupon, you should study consumer behavior and customer needs.
Marketing is not fixed. It depends on the situation at the time, location, customer lifestyle, etc. In the current economy one should be cautious about investing. It is important to know how to combine knowledge of ‘the four P’s’ and use it beneficially. Marketing is all around us all the time.