Amidst all the new ways to market your products – social media, email, search engine marketing – it is still important to build your communications on a solid foundation of marketing basics. A good place to start is with the 4 P’s of Marketing! Product, Place, Price, Promotion
Your product and product mix are a critical first step in the marketing plan. Here are some questions to ask periodically to make sure you are still relevant in the market place.
Market Need – Do your core products still meet the important market need?
Product Mix – Could you add products to more completely meet the need of existing customers?
Product Profitability – Is there a way to make your products more profitable by cutting material and manufacturing costs? (We’ll talk price in a minute)
Make sure your product mix is keeping up with a changing market need and that you are getting the most business possible from your existing loyal customer base.
There are two basic approaches to pricing.
Cost Plus – Calculate the cost to provide our product or service and then mark it up enough to cover overhead and provide profit. This method can be safe and very effective in many situations. However, most small business owners under estimate their costs and leave money on the table.
Market Price – Market price is about selling to value, to the amount people are willing to pay. Businesses in markets where there are high quantities of similar sales can usually figure out a good market price and then adjust to their added value. Gas
stations are a great example. For the rest of us a good starting place is to compare purchase price to the cost of alternatives – buying this widget for $100 will save you $200.
Be careful not to undersell when you are getting started. Charge what you need to make to
be successful and then deliver the value.
Place or Distribution
Determining the best, pronounced “most profitable”, way to get your product to market is often UNDER analyzed by small businesses. Here are some things to consider for your product “Place”.
Sales Volume – independent distributors, network marketing or joint packaging can provide a very large direct sales resource that local retail would have trouble touching.
Most Convenient – it’s usually best to close a customer and get product in their hands quickly, without much effort on their part. Leverage the post purchase attitude.
Cost and Efficiency – many great product ideas are dragged under by a distribution plan that takes too much time, energy and cost.
Channel Competition – are you using retail distribution or independent agents for your product?
What is the impact on them if you start selling directly online? If you don’t coordinate closely you may lose a loyal sales force.
When it comes to distribution, beware of the statement or thought “Well, we’ll just….., shouldn’t be that difficult”, it’s usually more difficult.
FINALLY! PROMOTION! For most people with no marketing experience or education, marketing is promotion. When I interview new clients to build them a marketing plan, or when I have students in my marketing classes, most think I’m there to talk about advertising. Where should I advertise? Should I be on Facebook? What about Twitter? My web site isn’t generating traffic!
It usually takes me some time to talk them through the importance of focusing on Product, Place and Price first, so that when we spend our Promotion money it isn’t flushed down the Pot!
A simple approach to every advertising, promotion or communication decision is to first determine the Audience, Objective and Message and then figure out the media that will be most effective.
Audience – a defined group of buyers and influencers that you want to reach.
Objective – awareness, attitude or action. What are you trying to accomplish?
Message – what is the right thing to say and the right way to say it to meet your objective with the target audience
Media – the communication tool or set of tools that will most effectively deliver the message
OK, I made this one up as a fifth P, but it might be the most important. We could sit together for 15 minutes and come up with a multitude of ideas to market your business. That’s the easy part of marketing. The hard part, especially for the small business owner, is to consistently and repeatedly deliver your message patiently over a long period of time.
This takes money, marketing knowledge, resources and patience, not traits associated with the average entrepreneur!
Not getting the most from your marketing efforts or don’t know where to start with your marketing? Sigma College of Small Business provides marketing classes, marketing services and marketing consulting to get you going. We keep it practical and affordable to meet your immediate needs.