Promotion

Promotion, the fourth element in the marketing mix, is the most difficult one to describe. It is all the communicative activities you use to ensure that customers know about your offerings, have a favorable impression of them, and actually make a transaction. Promotion represents all of the communications that a marketer may insert into the marketplace. These activities include advertising, catalogs, contests, public relations and personal selling. Within these categories we have TV, radio, and print ads, billboards, product placements in movies, sponsorship of public TV and radio channels, two-for-one dinner specials, customer loyalty programs, telemarketing, direct mail sales, and door-to-door solicitations. And on and on.
The many faces of promotion are too numerous to cover in a book of this size. Suffice it to say that, along with market research, promotion provides the critical communication link between your company and the customers you aim to serve.

Price

Price is what a buyer must give up in exchange for your product or service. Pricing in a competitive environment is both critical and challenging. If you set the price too low, you'll increase unit sales at the expense of profits. If you set it too high, some of your customers will walk into the waiting arms of competitors. Price decisions include price point, list price, discounts, payment period, and so on.
In free and competitive markets, pricing is the linchpin of most transactions. When a customer who wants a product perceives that its value is worth the asking price, a transaction will take place, barring other choices. Thus, moving the price higher or lower regulates the quantity of units sold. This point has implications for the product life cycle. You can price much more aggressively when your product is perceived as new, unique, and without strong substitutes, but you must often reduce your price as substitutes and competitors appear in the maturity stage of the cycle.
Generally, your flexibility in pricing is a function of the uniqueness of your product or service. This is because customers have difficulty in assessing the value of more unique offerings, such as a custom-built guitar or a fully restored 1962 MG sports car.
Some sellers successfully maintain a high price by surrounding their very ordinary products with an aura of uniqueness, quality, or exoticism. This approach is commonplace in, for example, the cosmetics industry.
Wherever you price your product or service, that price is an important element of the marketing mix and will have an impact on your results. You can price for any of the following objectives: to increase unit sales, profits, or market share; to undermine a competitor; or to keep competitors from entering your turf. Successful companies design their new products with specific price targets in mind.

Place

Place refers to the point of sale and distribution of the product or service. Place represents the location where a product can be purchased. It is often referred to as the distribution channel. Place may be a retail store, a national distributor network, an e-commerce Web site, or a direct mail catalog.
Few companies use a single place for transacting business with customers. Many have market channels through which they meet customers; the more numerous and effective these channels are, the greater the opportunities to make sales.

Product

The product (or service) is the centerpiece of the marketing mix. Whether it's a life insurance policy, a washing machine, or a broadband Internet service, the product is the company's offer to customers. That offer includes physical aspects as well as the less tangible elements, such as warranties, option choices, and after-sales service. Thus, the product is the entire package you offer to customers.
You can differentiate products physically or through the services your company provides in support of the product. Products' physical distinctions include the following:
• Form. Size, shape, physical structure
• Features.
• Performance quality. The level at which the product's primary characteristics function
• Conformance quality. The degree to which all the units of the product perform equally
• Durability. The product's expected operating life under natural or stressful conditions
• Reliability. The probability that the product won't malfunction or fail
• Repairability. The ease with which the product can be fixed if it malfunctions
• Style. The product's look and feel
• Design. The way all the foregoing qualities work together (it's easy to use, looks nice, and lasts a long time)

You can also differentiate your product by service distinctions that set it apart. Service distinctions include the following:
• Ordering ease. How easy it is for customers to buy the product
• Delivery. How quickly and accurately the product is delivered
• Installation. How well the work is done to make the product usable in its intended location
• Customer training. Whether your company offers to train customers in using the product
• Customer consulting. Whether your company offers advice or research services to buyer.
• Maintenance and repair. How well your company helps customers keep the product in good working order.

The actual design of the product or service should be guided by a deep understanding of what customers need, want, and are willing to pay for, as determined by market understanding and research.