The Four P’s: Product, Place, Price and Promotion are classic marketing tools. If you hear talk about “Marketing Mix” they are talking about the Four P’s. The marketing mix relates to the emphasis a business places on each of the Four P’s. Varying one can have a direct impact on sales and profits. An example of using Price to affect the marketing mix would be selling a Filet Mignon. If you sold a Filet Mignon for $100, the profit per sale would be extremely high but you would have few customers. If you sold a Filet Mignon for $5, you would have boatloads of customers but you wouldn’t make any profit.
Following we’ll help identify each of the Four P’s and provide typical examples. We’ll also discuss things you might do to increase the value customers perceive from your Four P’s.
PRODUCT – You might think the product is your food. That’s part, but not all. The restaurant’s product is the bundle of goods and services. This includes the appearance of the food, how it is served, the support (waiters, counter people, hostess, cashier), parking, lighting, music, tables and chairs, restrooms, decor, hours of operation, AND MORE.
What do you need to do? Differentiate yourself. Strive for uniqueness. It can be the menu items, the way you serve, hours of operation, decor, cleanliness and ambiance, appearance of the staff (apparel and personal hygiene), staff knowledge, and being open at the right time.
PLACE – This is where and how you deliver your “product”. This can be the restaurant, delivery, internet orders, phone orders, from a cart/kiosk, a mobile truck, or catering.
What do you need to do? Make it easy. Offer the most options for ordering. If you don’t deliver, consider it. Let customers fax or e-mail orders. Ensure you can take a phone order promptly, efficiently, and error free. In an area with foot traffic, have a walkup window for carryout. Have a designated parking area for carryout customers. Deliver the product to the car as an added benefit.
PROMOTION – This is the advertising and sales part of marketing. Promotions can be either push or pull. Ads “pull” by making the customers aware of and ask for your product or service. Incentives, such as free goods or price reductions “push” the product out by encouraging customers to buy more often or increase the order size.
What do you need to do? This isn’t as simple as having a promotion. That’s easy. The execution is important. Your advertising has to be in the right form, whether that is coupons, the radio, newspaper, mailer, door hangers, etc. If you have a mailer going to an office building offering a special for dinner that might not be effective. If you have an incentive like “buy the second one for only x more” or “buy 6 wings and get 2 free” and your staff doesn’t sell the customer you won’t see the results.
PRICE – This is how much you charge for your product. Price considerations include charging the same price all the time or varying it in some way. Pricing can vary by time (Happy Hour, Early Bird, Tuesday Night Special, Lunch Special), volume (buy 1, get 50% off), and the level of service (carryout only special, delivery charge).
What do you need to do? Price is an effective tool. Customers respond to value. The relationship of the price to the quality is part of the value. Remember, don’t think of price as discounting. Discounting has its place, but too much discounting may mean your customers come to think of your discount as the regular price and they may not pay your actual price. Use discounting to stimulate business on normally slower business days or slower hours. You might be better off increasing the value by by offering a larger portion for a slightly higher price or a smaller portion for a reduced price. Price can also be used to gain business from competitors. Why not have customers bring you receipts from their last order from your competition and give them a coupon for a discount or a free item.
The best most effective marketing plans include the right combination of the Four P’s. Ignore one and it might not matter how well you do with the others. Everyone knows a restaurant that had great food that didn’t make it. Everyone knows a restaurant that has mediocre food, but does a landslide business.
The key to all of these is to differentiate you from the competition. Using Product, Place, Promotion, and Price to build a marketing plan can help get you there.
Adding something special to specialty foods for more than 50 years.
