The 4P's are the ideas to consider when marketing a product or service. They form the basis of the marketing mix. Getting this mix right is critical in order to successfully market a product or service. The 4P's are:
- Product (or service)
- Price (and cost)
- Promotion
- Place (locality)
If market research is carried out effectively, your organisation can plan a promotion for the right service, at the right price, and to get it to their chosen customer or client, in the right place. The Marketing Mix is a useful tool to infomr a SWOT analysis.
The marketing process
An organisation will gather information about the marketplace (e.g. epidemiology, demography), and then research patinet/client needs. From this, it will identify who its market is, and then put together a marketing plan based on the findings. The marketing mix will be central to this, and finding the right balance in each of the 4Ps is very important. The organisation can then review and adapt their plan when they need to. You should remember the following points:
- Although marketing is customer-orientated, the main aim is still to be financially viable.
- A good marketing manager will try to differentiate their product (i.e. make their service stand out against similar competitive services).
- Whatever pricing decision is made, the most important factor is to breakeven.
- Making it as easy as possible for the customer to buy the product will help sales to increase.
1. Product or service
A product or service can be sold or provided either to a commercial customer (e.g. private beds to a medcial insurance company) or an end consumer (patient or client).
2. Price
No matter how good the product or servcie is, it is unlikely to succeed unless the cost of production is right. In the commercial world, most people associate a higher price with quality, so you would expect to pay more for a BMW 5 Series than a Fiat Uno. On the other hand, is one cola drink worth more than another, and if so, how much? In healthcare, where demand is invariably greater than supply, a lower price is always advantageous.
As a rule, a producer of luxury or medical products will use skim pricing or premium pricing initially, in order to maximize its profits. This is useful to them, as it helps them to recover expensive research and development costs quickly.
For fast moving consumable goods (fmcg's) like colas, penetration pricing is usually used. The firm will want a large share of the market, so will settle for a small profit on each item. In the long term, they hope that the turnover, and therefore their profits, will be high.
The simplest method of all is cost-plus pricing , where a firm adds a profit mark-up to the unit cost.
3. Promotion
The main aims of promotion are to persuade, inform and make people more aware of a service, as well as improving provision. Advertising is the most widely used form of promotion, and can be through the newspapers, radio, leaflets or billboards/posters. The specific sections of society (market segments) being targeted will affect the types of media chosen, as will the cost.
Companies use sponsorship and public relations to improve their image, notably through financing health, sports, the arts and public information services.
4. Place
Distribution channels are the key to this area. An organisation has to find the most cost-effective way to get the service to the consumer. Clinics in school buildings, mobile clinics, purpose built hospitals and clinics may all need to be considered. In rural areas, can repeat prescrptions be posted rather than collected in person?
