Product refers to the creation or design of a good or service. It is here that the process begins in the life of a product. In this part of the marketing mix the design is made, the name is created, and even the packaging of the good is decided upon. This is where a product needs to be created in a way that makes the product marketable for its intended target. (Manktelow, 2013) Place is the process in when it is decided where the product is going to be sold and how the product will be distributed.
Many questions are answered in this part of the process such as “Where do buyers look for this product? , “What channels of distribution should be used? ”, “Do we need to use a sales force, attend trade shows, or send samples to companies? ”, and “What are competitors doing? ” (Manktelow, 2013) For example, a company producing power tools would not want to distribute their goods in a boutique. The intended customer base is not likely going to be found here. The correct distribution would be in a store where power tools are sold like Home Depot. While having a great product is important, you need to get it to the consumer in the most efficient manner.
Price is where the value of the product is determined. Pricing is just as important as the product itself. No matter how great a product is, it needs to be priced so that consumers will be willing to purchase it and so that it will make a profit that is worth investing in. Pricing also can offer a chance to get a leg up on the competition. In order to gain an advantage in market share a company may decide to price their product slightly lower than their competitor’s price. (Manktelow, 2013) Promotion is how a company creates their promotional strategy, advertising, and public relations.
Promotion is extremely important in making the consumer aware of the product. It is also very important that the promotional strategy is aimed at the target audience. (Manktelow, 2013) For example, to promote a new basketball shoe advertising could be created featuring a professional basketball player and the product could be heavily advertised during basketball games on television when the intended audience is going to be watching the game. PayPal, Inc. is a payment processor that operates primarily in processing payments on the internet.
In 2010 PayPal began to push a new motto of “Anytime, Anywhere, Anyhow”. PayPal was taking their online payment services and moving them into the physical world. In order to achieve this PayPal began pushing their mobile payment services to develop products that would help to achieve this vision. PayPal required a product that would allow people to truly use PayPal anywhere at any time. In 2012 PayPal launched PayPal Here. PayPal here is a product that connects to a smartphone to allow merchants to accept credit card payments wherever their business may take them.
To allow buyers the convenience of using PayPal anywhere, PayPal revamped the PayPal Mobile App. The PayPal Mobile App allows a person to send funds at any time using their smartphone. Whether it is sending money to a friend or paying for an item on eBay, the PayPal Mobile App allows buyers to use their PayPal account without having to be in front of their computer. The other product PayPal created for both merchants and for buyers is PayPal’s in-store checkout. In December of 2011 PayPal partnered with The Home Depot to unveil this new product and feature.
Customers of the Home Depot no longer need to bring their wallet to the store with them. By simply entering their mobile number and PIN number they can pay with their PayPal account. Upon checking out the customer receives a text message and email receipt of their purchase. This video demonstrates the PayPal in-store checkout process. http://www. youtube. com/watch? feature=player_detailpage&v=Q8P9qT9EIVk PayPal’s placement of the product was not as complicated as many companies selling a product like a hammer or shoes.
The PayPal Here product is a way to use the PayPal Here service. Customers simply have to go to the PayPal website or PayPal Here App and request the PayPal here dongle. It is sent to the customer at no cost because the value is in the customer accepting payments using the PayPal Here service. This benefits PayPal in that they do not have to deal with major distribution channels in getting their product into the right store. They simply need to ship the product to the customer that asks for it off of the PayPal website.
PayPal has structured their pricing to remain ahead of their primary competitor Square. PayPal charges 2. 7% per transaction to receive payments using the PayPal Here product. Square has a similar product and charges 2. 75% per transaction. The cost of the phone attachment for PayPal Here is free. This has allowed PayPal to keep up with their competitor. In order to effectively market this product PayPal needed to have a price that at least met that of their competitor in order to get people to use the product.
PayPal decided to charge slightly less than their competitor in order to gain customers new to this technology and to sway some customers away from Square. Had the service not been available through a competitor, PayPal’s pricing may have been different. Having a price that meets or beats the competition shows that PayPal is marketing their product to not just to customers new to accepting mobile payments, but to those that are already accepting them which expands the market they are targeting.
PayPal also offers other types of services other than just accepting payments on a mobile phone which creates more value for potential customers. PayPal has launched aggressive marketing campaigns through email and through banners on their website. PayPal has never advertised their products on television or radio and they did not start with the launch of PayPal Here. PayPal announced PayPal Here at a media event and let the media spread the word along with the advertising occurring through email and on the PayPal website.
This helps PayPal save money in advertising and promotion while still promoting their product efficiently. PayPal’s intended targets for PayPal Here are small businesses and people who sell at events like trade shows, service (lawn care, plumbing, etc. ) who would like to be able to give their customers more options to pay for their services. The marketing mix is an effective way to help successfully market a product or service. It addresses every aspect that is needed in order to successfully prepare a product to be launched.
The four P’s work together to help a company provide the consumer with what they want, get the product to the consumer that demands the product, sells at a price that benefits the company and the consumer, and will promote the product to the right audience. Without the proper use of the marketing mix a product could easily fail. A company could design a new product that may seem great, but if they do not market the product correctly the right people will not see it, buy it, or be aware of it. Without the sales, the life of a product can be short lived because of ineffective marketing. PayPal has shown an effective use of the marketing mix.
PayPal identified a consumer need, PayPal designed a product and service that would meet the needs of the consumer, PayPal found an efficient way to deliver the product and service to the customer, PayPal provided a price that was slightly better than the price of their competitor to gain a market advantage, and PayPal effectively used word of mouth promotion and promotion through their own website to make consumers aware of this new innovative product that can meet their needs. It has been effective use of the marketing mix that has helped PayPal remain on top of the online payment processing world.