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The success of a company relies greatly upon proper marketing. A company must have a proper mix of all the elements and marketing efforts in order to produce desirable sales results. This mix will include the variables and tools a company will use to satisfy the business objective and the needs of their potential customers. This mix which is determined by marketing research and experimentation is commonly known as the marketing mix. This mix consists of four variables which the business world often refers to as the "Four P's". The Four P's are product, price, place and promotion. Through this paper I will define how the use and effectiveness of these variables lead to the success of an organization when properly coordinated together.
Product is one of the components used in the marketing mix to attract a company's target market. In relation to the marketing mix product is defined as, "an object or a service that is mass produced or manufactured on a large scale with a specific volume of units" (Wikipedia, 2006). Determining the product or service and who it will be produced for is the first step in marketing. In the automotive industry the product is a key element of the marketing mix. With the current trend towards the preservation of the environment and its natural resources, automobile manufacturers are developing products geared towards consumers with these concerns. These environmentally friendly vehicles include hybrids, electric cars and cars that operate on corn based ethanol fuel as opposed to gasoline.
By selecting to focus on environmentally friendly or "green" vehicles, automobile companies were required to do research and find the needs and desires of their potential drivers. This research included traveling the globe and visiting countries where green vehicles were already in use. The results of research and surveying revealed that "68 percent of respondents said they would be interested in buying an electric or hybrid car within the next three to five years. And about one out of four said they would be extremely interested in purchasing an eco-friendly car in three to five years" (Buss, 2001). As a result of months of research, researchers found that consumers demanded the same power and performance as mainstream vehicles including affordable prices. With this knowledge manufactures marketed these products by boasting their EPA rankings and fuel economy.
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The next element of the marketing mix, price, also has a significant affect on the success of a product or service offered by a company. Price is defined as, "the amount a customer pays for a product" (Wikipedia, 2006). The pricing of a product is determined by several factors. These factors include the production cost of the good, the demand for the good or service and the response to competitors. Since the price of a product or service is normally the deciding factor in choosing one brand over another; price is a common area of the marketing mix that can be used to make strategic changes. A strategic change is a change that is very drastic. A company may choose to decrease the price of a product greatly vin order to promote it or gain an edge over the competition.
In the stiff automobile industry where new drivers balance the lost of retiring drivers automobile makers have to find ways to place their vehicle ahead of the competition. Since new drivers have no loyalty to a certain product brand they are usually attracted to the company that can offer them the best deal. Due to this fact manufacturers use pricing and interest rates to earn new buyers. Sometimes to increase sales "auto manufacturers often provide low interest rates in order to push slow-selling models" (unknown, 2007). Along with reduced prices some automakers including Chrysler, offer incentives such as employee-discounts to all buyers and 0% financing to increase sales and make room for new models.
An additional element of the marketing mix is place. This element is best defined as the "location where a product can be purchased" (Wikipedia, 2006). The placement and distribution are included with this element. The job of a marketing manager is to determine the level of service that will be provided enabling a consumer to purchase a product or service. Having a product in the right location and at the right time is the key to successful selling. Making your product accessible to customers and with few obstacles can increase the possibilities of them selecting your product over that of the competition.
The marketers for the Chrysler Corporation have taken the lead over other automakers when it comes to the placement of their vehicles. Marketers for the product line have chosen to use a campaign to boost the brand name including; television spots, print advertisements and sponsorship of popular social activities. Chrysler stands behind their product and understands that the proper placement of their advertisements for the right consumer to see will only increase their sales and revenue. This faith in their product is no more evident than in the amount of money they were willing to invest in advertising last year. "Chrysler said earlier this year that it would spend more than $500 million on ads in the second half of 2006 to support 10 new vehicles" (Brandweek, 2006). This support may also stem from the success of the Chrysler 300 which was chosen Motor Trend Car of the Year in 2005.
The final element of the marketing mix is promotion. Promotion often runs contemporaneously with place and is defined as, a representative of all the communications a marketer uses in the marketplace. "Promotion has four distinct elements - advertising, public relations, word of mouth and point of sale" (Wikipedia, 2006). Good marketing occurs when a proper blend of these four promotion elements are used to promote a new product or service. Making sure the consumer is even aware that your product exists is nearly half of the battle.
Since advertising consists of any communication related to the product that is paid for by the company, it is often heavily monitored and researched. Examples of advertising include billboards, internet advertisements, and radio commercials. The proper form of advertising is selected by the cost to advertise in that fashion and the expected number of sales it will generate along with reaching the target audience. An example of poor advertising would be purchasing air time for a new dance club on a Christian radio station; this would be a poor decision because the advertisement would not be heard by individuals who would attend the club.
The next element of promotion is public relations. Like with place, public relations include sponsorship deals. The Chrysler Corporation currently sponsors the Time's magazine "Person of the Year". Since this form of advertising is not paid for directly it is dependent upon word of mouth to draw new business. It is important that a company select an organization or issue that is socially acceptable to avoid having their name linked to scandal and potentially hurt profits.
Word of mouth which in itself is an element of promotion is most often less formal than the others. Since the bulk of word of mouth advertisements come from customers, many marketers feel that this form of advertising has great credibility. This sense of credibility often leads potential customers to try a new product or service based off of the comments of existing customers. With the increase of internet blogging comments made by customers are spreading even faster; this places quality service high on the list of a company's goals and responsibilities.
The point of sale is normally where the basis of many word of mouth comments develops. The location where the transaction occurs can sometimes cause a consumer to make decisions on the company as a whole. If the business is located in an undesirable area or one that lacks convenient parking it may deter potential customers from patronizing it. Also, with many transactions occurring on-line versus in-person; web design and the maneuverability within a site can be a factor on whether a customer chooses to do business with a company.
In conclusion, this paper has shown the importance and effectiveness a proper marketing mix has on a company. Putting the Four P's; product, price, place and promotion to good use can lead a company to knock-out competition and maintain steady profits. Taking the opportunity to look at the courage of the Chrysler Corporation in trying new and innovative ways of marketing such as sponsoring Gospel tours to gain the interest of African-Americans, the company ventured into an area never visited by automakers before. This willingness to take well measured risks including time honored marketing strategies will keep the Chrysler Corporation the leader of the Big Three.
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