Mastering the 4 Ps and SWOT Analysis for Business Success
The Marketing Mix: Strategy and Action Plans
Once the analysis and diagnosis of the situation are complete, it’s time to put into practice action plans that enable the company’s approach to the customer. These action plans are structured around four controllable elements (Product, Price, Promotion, and Distribution), which are collectively called the Marketing Mix.
Product Attributes and Branding
The Product is everything—a good or service—the company offers to the market that satisfies a need. It includes various attributes:
- The good or service itself that meets the requirements.
- The model.
- The packaging.
- The labeling or branding.
A Trademark is a name, symbol, or design that identifies the product of a company in the market.
Price Setting Factors
Price is the amount a customer pays for a product. Its setting depends on numerous factors, including the following key highlights:
- The Cost: Determining the price by adding a markup percentage to the cost incurred by the company to produce the product.
- The Competition: Depending on product characteristics, it may be advisable to set a price below, similar to, or higher than the competition.
- Psychology: Using odd numbers (e.g., $9.99) suggests the idea that this is a discounted price.
Promotion: Communication and Persuasion
Promotion is a form of communication through which the seller transmits information to a potential buyer about a product or the company that manufactures or sells it. Promotion involves more than just informing; the potential buyer must be convinced about the benefits derived from using the product, and ultimately, remember to buy from that company and not others.
Main Forms of Promotion
- Advertising: Transmission of message components through mass media communication.
- Sales Promotion: Commercial actions designed to stimulate immediate sales.
- Personal Selling: Direct contact intended to inform, persuade, and finalize the purchase by the customer.
- Public Relations: All activities of the company aimed at creating, enhancing, or maintaining the corporate image.
- Merchandising: A set of measures that help display and dispose of the product at the point of sale.
Distribution Channels and Logistics
Distribution is the set of processes that move the product to where it will be purchased by the customer. This includes everything from storage and transport to collection and final sale.
Regarding the channels or means used to reach the consumer, distribution is typically divided into two areas: wholesale or retail.
Other forms of distribution have gained significant ground, such as:
- Franchising
- Direct Marketing
- Vending Machines
Direct Marketing is a set of distribution procedures using direct sales propositions aimed at specific customer groups.
SWOT Analysis and Strategic Planning
To analyze and diagnose the environment, companies frequently use the SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats). This form of analysis identifies four key aspects of the company in relation to its surroundings:
- Weaknesses: Aspects of the business project where competition is superior.
- Threats: Impediments and difficulties posed by the external environment.
- Strengths: Business aspects of the project where the company exceeds the competition.
- Opportunities: Emerging markets or the possibility of exploiting a market with many prospects or little competition.
Once a SWOT analysis is complete, it is possible to deploy one or more of the following strategies:
- Offensive Strategy: Involves using strengths to take advantage of opportunities.
- Reorientation Strategy: This strategy minimizes weaknesses to exploit opportunities.
- Defensive Strategy: Involves using strengths to avoid or reduce the impact of threats.
- Survival Strategy: This strategy minimizes weaknesses while simultaneously avoiding threats.