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4Ps (Price (Cost Plus - Adding a margin to the final cost of a product (AD…
4Ps
Price
Cost Plus - Adding a margin to the final cost of a product
AD - Easy to add a fixed margin to many different goods
AD - Guaranteed profit (if sales are made)
Dis - Ignores the market
Dis - If costs change, price will need to change - which is time consuming
Skimming - High initial price then lowering
AD - High profits
AD - Good for inelastic demand
Dis - Consumers may not purchase if not justified
Dis - Substitutes, cheaper, become more appealing
Penetration -
Price set low to attract demand
AD - Can gain lots of attraction and demand
Dis - Could result in a price war
AD - Rational consumers will purchase
Dis - May not yield sufficient profit
Predatory - So low, other business forced out of the market
AD - More customers
Dis - Illegal
AD- No more competitors
Dis - Only short term
Competitive - similar to rivals
AD - Rivals won't have a competitive advantage from pricing
Dis - Profits can be hurt
AD - Can help get ahead of the competition
Dis - There are other ways to attract consumers
Psychological - Visual impact
AD - Very easy to set
AD - Stands out
Dis - Does not work for rational consumers
Dis - Marginally may hurt profits
Place
3 Interemediary
AD - Enables a larger outreach
Dis - They keep some profit
AD - No risk for producers
Dis - Only for international businesses
2 Intermediary
AD - Can be efficient
Dis - They keep some profit
AD - No risk for producers
Dis - Only for bigger businesses
0 Intermediary
AD - Easy
Dis - Not practical
AD - Quick
Dis - Hard to focus on branding
1 Intermediary
Dis - Need line of communication
AD - Added value
Dis - They keep some profit
AD - Reduced distribution cost
Product
Aesthetic
How it looks. Appealing?
Economic manufacture
Added value. Will this product sell?
Function
Benefits/features of product
Promotion
Above the Line
AD - Better at developing brand
Dis - More expensive
AD - Wider reach
Dis - Could target the wrong audience
Below the Line
AD - More targeted
Dis - Decreased market share (exclusive)
AD - Cheaper
Dis - People may not trust 1 on 1 contact