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.
As I was enjoying the first couple rounds of this year’s NCAA Tournament and thinking up a great blog topic using basketball as a metaphor for business, Monday’s issue of The Vantage Weekly came to my inbox. My good friend John Stewart gave me special permission to repost the Management Impact from this week. Thanks John!
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The Economic Impact Of “March Madness”
The Madness in March extends well beyond the court action of the NCAA Basketball Tournament. We chuckle after hearing reports on the losses in worker productivity from time spent on all things “tourney”. In fact, Challenger, Gray & Christmas estimates the losses in productivity to be between $1.8B and $4.0B, but it’s nearly impossible to confirm and weigh against generated revenue.
One offset to lost productivity is the revenue from added consumption. The economic impact to the hosting cities for first weekend games is estimated at $4M to $6M each. The Final Four weekend is worth an estimated $13 million to it’s host city, though there is variation depending on the city and the contestants.
In their 2003 study, “An Economic Slam Dunk or March Madness?”, Matheson and Baade did the math and found that the men’s NCAA Division I tournaments since 1970 actually provided only a slight economic gain to host cities in opening rounds while the final four lost money. However, this seemed counterintuitive so we took a quick glance for ourselves. Estimates from the Indiana Department of Revenue show that 2006 Final Four host Indianapolis (Marion County data) had average annual tax revenue growth of 45% in March and April of 2006, which slowed to about 10% in 2007 and was -1% in 2005. They also hosted in 2010, but it’s very hard to control for economic conditions. In other words there was a clear and significant direct economic impact from spending. Also, indirectly more people would be hired temporarily and revenues would be raised by local government on local projects in preparation, which would also boost local economic activity. Of course this is much more difficult to measure but does help.
It’s not just the basketball that’s competitive. One estimate states that 70 cities bid for the 39 spots to host the 2011, 2012, and 2013 tournaments. Being competitive requires cities to invest 100’s of millions for facilities and other NCAA standards for hosting. Amortizing these expenses and accounting for the losses in productivity shows a quick offset to the aforementioned gains. We may never actually know with any precision the real economic impact, but we do know it’s arguably one of the greatest annual sporting events. And, although productivity might fall briefly, the happiness it brings may just be better in the long run! Enjoy.
Thanks John for a great post! I forgive you for kicking my butt in our bracket competition.
If you missed this year’s MAPS Meet the Media Event – “You Met the Media, Now What?”, here is a little taste of the great information and people that passed you by:
The Keynote Address
Matt Brock, Public Relations for Washington Center Hospital
Matt brought a ton of public relations experience to the table as the Keynote Speaker. Sharing over 15 years of experience as a reporter for WJLA-TV Channel 7 and NewsChannel 8, including local coverage of the 9/11 attack on the Pentagon and the Washington Metro Sniper Attacks. Now Matt is using his expertise from a different perspective in his new position with Washington Center Hospital.
Relationships – a critical link to knowing what is newsworthy and addressing your audience is to build relationships with your press contacts and be able to respond to their needs as a media professional. Matt related a great story about how he used our own PR professional Asha Brouta and one of her clients in a story topic that he thought was especially newsworthy for his audience. Another benefit of building those relationships is that it will help you be in the right place at the right time. And if you don’t have the relationships, this event was a great place to start building them or to find someone who already has them!
What is Newsworthy: Who Cares and What is Your Audience?
Asha Bruot, ASHA Public Relations
A local public relations professional and recently featured on the cover of Piedmont Business Journal as one of “20 Women to Watch” in the Piedmont region, Asha shared a wealth of experience in public relations for local businesses. One key point was that public relations is not advertising. Making this realization will help set the strategy and direction for your activities with the press. With advertising you can pay to say what you want, but in PR you must position your story in a positive way within the context of what your media contacts are writing about. Facing this reality is a big first step to developing the right story and writing a press release that they care about for their audience.
How to Write a Press Release
Sherri Arnaiz, MDA Technologies Group and Barbara Reese, BR Associates
Keep the News Up Top – Hank Silverberg of WTOP Radio receives press releases by email and on his Blackberry, so the subject line is VERY important: Don’t bury the lead! Keep the “news” up top. Chanda Washington, Community Editor of Prince William Local Living in the Washington Post is also focused on getting to the “news” in a story, so write accordingly.
Pictures Sell, Especially for Newspapers – Bill Walsh, Editor of the Fauquier Times Democrat recommended including a relevant professional photograph with your press release. An official portrait of the CEO, some shots of your facility, or a picture of the event with the names of those in the picture are a welcome addition to any press release.
Local Papers Love Local News – Randi Reid, Publisher of the Observer Newspapers, stressed the importance of local press releases to her local paper. Although larger media may not use them as much anymore, local papers are hungry for your stories to keep the community informed.
Be Available – Make sure the contact information provided is current and that the number is normally “manned” with someone who is knowledgeable and an authorized spokesperson.
Know Your Audience and Build Relationships – Our Media VIPs all agreed that you should be familiar with the stories a media source uses before sending the release. Sending a national story to a news source focused on local news can reduce your credibility with that source. Building a good relationship with a reporter starts with some research into what they like to write about!
What Does a PR Plan Look Like
Me, Jamie Gorman, Sigma College of Small Business
A good public relations plan, like other good marketing plans starts with the basics of identifying the audience, objectives and message. I have been doing a lot of social media plans and really wanted to make the point that regardless of the media being used, having a good foundation will help answer a lot of questions. After that we discussed the importance of developing a public relations calendar that schedules the activities necessary for success with public relations. And sometimes it takes some creative partnerships to build a story. An example we used was a partnership between your business and a non-profit that supports a common industry, cause or audience. Having your business name mentioned as a sponsor for one of our great local non-profits can go a long way in building local credibility.
This event is one of those “must attend” events of the year. Along with all the great information and networking, attendees received a local media guide with key press contacts for the local media. Look for it again next year and thanks to the Prince William Chamber of Commerce and the MAPS Committee for pulling it all together.