Sometime, entrepreneurs can get carried away by an emotional attachment to their products or services, particularly if they have created them. They feel passionately about their business and positive reaction from friends and family.
Having advised and trained over 3,000 enterprises, I have found that success is more likely to arrive (and stick around) if passion is combined with a plan.
What is the marketing mix?
A strategic marketing plan should include the 4 Ps, also known as The Marketing Mix. This comprises four elements: product, price, place and promotion. If the 4 Ps are considered in this order, a clear path opens in front of you. The product has to satisfy customer requirements, the price is part of the product offering, the geographical footprint in which you operate comes next and finally you promote the item in order to generate enquiries or direct sales.
This can be either a physical product that the entrepreneur has invented and manufactured, or a service. In the latter case, my advice is to “productise your services”. This includes giving each discrete service a brand name. For example, I refer to my 1:1 marketing consultancy session as a Marketing TurboCharge, which is more evocative that a purely descriptive name.
Having created a name for your service, you can have a separate web page with a contact form. You can then decide on a pricing structure.
The key product question to consider is whether there is sufficient demand. Or to put it another way, does the consumer or business buyer have a need that you can fulfil? One or two sales does not make a market.
Remember that virtually all products go through a natural life cycle. They are created, they mature, and they decline and die. You must be adaptable and realise that change is happening all around you. When times are good, plan ahead and invest. When times are not so good, you have to be creative with regards to products and services, in order to survive.
Some other things to think about:
- What are the features and benefits? (create a benefits list)
- Are there product (or productised service) variations, i.e. small, medium and large?
- Do you offer a guarantee?
- Do your products form categories?
- Which of your products work alongside other products, so that you can offer combinations?
Be careful when you set your pricing. Many small businesses under-price, particularly with regards to services. Think about the psychological factors. What does the price say about the product or service? Are you maximising your profitability, via your pricing model? Here are some pricing strategies for you to consider.
Freemium pricing: This is not just a pricing option, it is a business model in its own right. The idea is to promote a free version of a product or service, with the objective of converting a proportion of the users into paying customers. A service provider could, for example, offer half an hour of their time for free. Variants include “free for a month” and “free forever”.
Loss leader: A pricing strategy which has the objective of attracting new customers and market share. The product or service is sold at or below cost in order to gain market share.
Market based pricing: (‘Competition pricing’)An analysis of competitive pricing gives a price point for a product or service. This may be lower, the same or higher than the competition, depending on the marketing strategy (i.e. differentiation and positioning).
Pay what you want pricing: The customer is allowed to pay whatever they feel is reasonable for the product or service. A “floor” price may be set. This pricing strategy has been tried within the music industry and also by restaurants. It can attract considerable publicity.
Premium pricing: A high price is set in order to reflect brand exclusivity and product/service quality. Think expensive cars and watches. Interestingly, it is not just the physical product that attracts buyers. Consider the buying experience, alongside top-notch service and all sorts of additional touches.
Self-liquidating pricing (SLP): The objective is to recover your costs. SLP can be used to sell an introductory version of the product, a book or a seminar place.
Value based pricing: Often used by high end software companies, the idea is to pitch the price around the product’s value to the customer, in terms of benefits received.
Will you only market your products/productised services yourself or will you enlist the help of partner organisations?
Ask yourself: who could recommend us? Would money need to change hands? If the answer is yes, then you are looking at some form of distributorship arrangement. By the way, it is surprising how many people will recommend you, if you ask them to do so.
Are you marketing locally, within a city or region, a part of the country, the entire nation or internationally? Your choice will impact your SEO (Search Engine Optimisation) strategy and many other aspects of promotion.
There are over 300 ways to promote your products or services. I have asked thousands of business owners to list the different ways in which they “get the word out” about what they do. Surprisingly, I have found that the average number they come up with is four. For example, for a company selling to other businesses: website, LinkedIn, networking and telephone sales. For a company selling to consumers: website, Facebook adverts, Instagram adverts and email marketing.
There are 37 promotional categories including advertising, books and booklets, celebrity endorsement, channel marketing, corporate clothing (hats, T shirts, jackets etc), corporate hospitality, direct mail, email marketing, events, networking, packaging, printed matter (including leaflets, brochures and business cards), PR, professional selling, promotional gifts, retail, Search Engine Optimisation (SEO), social media, sponsorship, videos, websites and word of mouth marketing.
Entrepreneurs may not have too much cash for promotion. The good news is that a considerable number of promotional techniques are either as cheap as chips or free, although, in fairness they do take time to implement (who needs sleep, anyway?)
A key question to ask yourself is whether you love to write, as the written word runs through promotion like the word Brighton runs through a stick of rock. If you are a writer, you will enjoy working on web pages, blogs, articles, press releases and so on. If not, you could look for training in this area or outsource it.
Origin of the marketing mix
The marketing mix concept was originally created after the Second World War by marketing professor James Culliton, who taught at Harvard. The modern version of the term was coined by E. Jerome McCarthy. Phillip Kotler helped to popularise the 4 Ps model.
An extended marketing mix model has also been created, using 7 Ps: product, price, place, promotion, packaging, positioning and people.
Why the marketing mix matters
I know that you are busy. Being a business owner can take over your life, can’t it? I suggest that you schedule some time each month to step back from the day-to-day battle in order to see the big picture. I hope that this article on the marketing mix has been helpful and that it will become part of your marketing thinking.