Wednesday, October 11, 2017

Marketing mix or 4P analysis

To understand what is 4P analysis and why we need it, we should answer a question: What is a marketing? The answer is too simple and at the same time is a good guideline for any marketing analysis. That is “ Marketing is about meeting customers needs profitably”. For this purpose businesses need to sell appropriate product or service which satisfies customers’ needs   and this should be done in a right place, right time on a right price.
            Imagine situation when you sell expensive toys in a poor country or village, or you sell Christmas gifts in summer or warm coat in hot Brazil. Common sense even says that this is not going to work, so what every business need is to consider all these factors, cause even if one of it will be “wrong” business will have troubles. Any business needs to answer several questions to do some analysis to understand correct price, product, place and promotion.
Product is the first component in a 4P analysis and it is vital for any company to succeed. To design a good product in terms of a good or service company needs to answer some questions:
1.      What kind of needs customer wants to satisfy ?
2.      What kind of attribute our product has to do that?
3.      Is its size, color and other features preferable.
4.      What product lines the company has in a specific sector and so on.

is a factor which differs from others cause it includes some information in it and should be set in a way which will let customer to get value that is to say benefits would be higher than the price perception.
Place is about physical territory, distribution channels which will be used to sell products. It is vital as well cause in a “wrong markets” no good can be sold. And also company should look what kind of competitors are there in that market.
Promotion should be done in a most efficient way. Company should decide is it appropriate to advertise on TV or in the internet, is it good at all to advertise, when to do that, is there any seasonality in a market and so on.
        I will post an example of 4p analysis of a tea company in Armenia to illustrate how it works and give a good guideline to support you to right your own.


Antaram's tea line of product includes over a hundred different varieties of teas with varying flavors and health benefits. This wide range allows the company to offer customers specific teas for specific situations.
The company believes that their consumers have a good idea about their situations or diseases and they can know which products are good for them through the information and the indications mentioned on each box with its ingredients, this ensures their consumers which products are the best for their conditions and meet their expectations.
The products have a traditional, bright and simple design with the actual picture of the herbs that have been used to prepare each product. Some types of teas contain seven tea bags and others thirty. Each tea bag should be steep in 500ml of poor boiled water, which can be used for more than once.
Antaram has been successful in creating an image that their products are unique by its quality. It ensures constant and continuous innovation in the product, and it keeps on coming up with newer and more improved medical benefits.

For every company one of the most important marketing and overall business decisions is pricing. Companies can have different pricing objectives, and it is important to identify a precise objective to find the most optimal price. We would like to demonstrate Antaram’s competitive cooperation regarding price and quality in order to clarify its pricing objective and strategy.   

    We can see from the matrix that Antaram has a higher price and higher quality compared with its straight competitors. For the similar products, Antaram's price is 1200 AMD, Makaryan’s price is 990 AMD, Ar Phito Pharm's is 860, and Gevorgyan's is 560 AMD.  From our observations we can conclude that Antaram has two main pricing objectives. First one is the maximization of a unit profit margin, because the company anticipates that the sales volume will be lower. And the second pricing objective is quality leadership, which is as follows: they use high price to signal about quality.
      And the strategy of pricing has characteristics from "competition pricing" as the company tends to price their product 10-15% higher than competitors and "premium" pricing as their quality is also higher, but it is not pure "premium", because the products are not luxury.
      The company has 20% to 30% profit margin in the price of products and its major costs are herbs buying expense, wage expense, packaging, taxies and distribution.

Antaram is distributed mainly in Yerevan with a population of approximately 1.2 million people, and in several cities of Armenia in smaller amounts. Its teas are sold mainly in Yerevan City supermarket chains, in Halep markets and in pharmacies like Alpha Pharm, Natalie Pharm, Levon & Lamara, Arpharmacia and Asteria. In case of absence of a product the customer can always order one from Antaram’s warehouse. Although the product is remedial and its main vendors are pharmacies, but it also has demand as a tea sold in markets, which means that only Yerevan City supermarket chains are not enough to spread awareness among potential customers.
Besides, Antaram also represents its product line during different international and local professional expos. For example, recently it participated in “Lady EXPO 2016” (26-28 November) organized by Logos Expo Center.

Antaram promotes its products through its web-page, Facebook account, Facebook ads and through occasional expos. Their product is well promoted by their social capital, as Antaram is operating since 1989 and has gained loyal customers.
From promotional channels we would prefer online ones as Antaram’s promotional budget is not large and internet advertisement is the cheapest.
There is some degree of seasonality in drinking herbal teas, for instance after the New Year the overall sales decrease and only the sale portion of the detox and anti-allergic teas increase. Another pattern of seasonality is the fact that when the apricots ripen the sales go down because with the consumption of fruits or almost all illnesses moderate. That is why we suggest doing promotions exactly at that time.
The overall portion of promotions in the market is low. The producers think that in case of active promotional campaigns the competitors will also implement this strategy.

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