by Anais Correa

Created on: March 02, 2008

Marketing is a strategic process that involves several steps, and is much more than simply trying to get customers, loyal customers, to buy a product. A marketer must know how to combine four elements, known as the marketing mix, to create the perfect product for the target market. The marketing mix consists of what is known as the four Ps: product, price, place, and promotion (Armstrong and Kotler 13). The four Ps are the marketing environment which a business can actually control, and they establish the marketing process guiding a marketer in selling their product.

To begin with, the first of the four Ps, product, involves a company creating a good that satisfies a certain need or want their target market has (Armstrong and Kotler 13). A product is generally recognized as anything "that can be offered to a market for attention, acquisition, use or consumption." This product may be objective or intangible, such as a service, good, event or an idea a company provides (Armstrong and Kotler 199). When a company is focusing on the product basis of the marketing mix it must decide the name of their product, what it is going to do, how much they will produce, how the product is going to look, the packaging it will be in, and features of the product, among other things (NetMBA.com).

Without a doubt, the price of a product has a high impact on the demand of that product. Price is defined as the amount of money a company charges for a particular good or service (Armstrong and Kotler 52). However, the price of a product may also include the opportunity costs a customer has for buying a product (Armstrong and Kotler 263). When it comes to price, a firm has various decisions to make such as: their pricing strategy, volume or wholesale discounts, retail prices, price flexibility, price discrimination, and seasonal pricing. Of course there are also other factors which must also be analyzed (NetMBA.com)

When setting a price, a firm has many factors it must consider and be aware of. "Price is the only element in the marketing mix that produces revenue." The highest price a company can set is determined by the way customers view the product and what they perceive to be the overall value of it. Therefore, if a company sets a price for a product beyond what customers think the product is worth, the demand for that product will be considerably low. The lowest price a product can be priced at is based on the costs of the product including the cost of the resources used to make the

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