Over 600,000 new businesses are started around the world every month. Out of those, over 50% fail within the first year. We see mind-blowing products released every year, but never penetrating the consumer market. What is the reason behind this? There may be many reasons, however one stands out: Marketing. Without the correct marketing mix, however amazing your product is, it’s bound to fail.
What is the marketing mix?
The exact mix of marketing elements that are best for your business is the marketing mix. It is made out of 4 Ps.
What are the 4Ps?
Product, Place, Price and Promotion. These 4Ps have been the dominant framework for marketing management decision making for the past half-century.
What is ‘Product’
What you are offering to the customer at a specific price is the product or service. For example, if you sell fish, the fish is your product and if you offer health care, that is your service, in other words your product.
The product you are offering the public should satisfy a need and provide an experience for which your customers are willing to pay. You have to have a good Product to be able to market it. Always keep a habit of checking your product continuously for quality. Check if the competitor offers a better product or service than yours and adjust accordingly.
What does ‘Place’ mean?
Where do you think your customers look for your products? It’s important to understand where your target market is looking for your product category, so you can catch them at the right moment/place. Then target your marketing and sales attempts to that identified locality/time. But make sure that the place where you offer your service or sell the product is accessible to all your customers.
What is the right ‘Price’?
The price is the monetary value for which you are offering your product. The big bold number on the rack or on the label that you check before buying anything. The Marketing mix suggests that the customers will pay a higher price for a product that has a higher value to them and will pay a lower price for a product with less value – to them. Price determination and control is a complex subject. Before deciding on a price, here’s one important question you should ask yourself:
- “Is your product worth the price you wish to charge, in the eyes of your target consumer?”
And here are a few more questions:
- How much does it cost you at minimum, to get the Product, to the right price? Raw materials, production, transport, labour, financing etc must be taken into account. Place, where this target customer can pick it up? If you set the price below that figure, you will be doing business at a loss. What does your competition charge? Are you able to meet that price, competitively, meaning you are not only able to make a profit at that price, but also spend on competition, product improvements and the like. Sometimes you don’t have a direct competitor in terms of price – the competition is selling an obviously inferior product perhaps, so you can afford to charge more just to attract the higher-end customer.
- Finally, and trickiest of all, what is the most sustainable, and fairest price I can charge, if I want to keep my customers happy and loyal, considering all of the above?. Deciding the optimal price for your product is one of the most important parts of the marketing mix. So, consider all the factors above when deciding your price. If you find you’re unable to support your product or service at the price you need to set, that may require a serious re-think of your underlying product costs.
The 4th P is Promotion
Promotion encompasses any form of communication from the company to inform customers and prospects about what is on offer. There are many channels of promotion. You have to be smart enough to choose the proper channel that is best suited for your product.
Keep in mind to use the best promotion method and channel to promote your product. You will find a million ways to promote your product.
Remember that you should have a budget for promoting your product. This budget can be managed by keeping the promotions targeted to the right segments at the right time, and getting the message just right.
4Ps and we’re done, right? Actually no. There are many more Ps. One variant is the 7Ps for Service industries. This has three Ps more important for service providers than product providers. These are; Process, People and Physical evidence. ”What are they” you ask?
Why “People” in a service marketing mix?
Having the right person involved in the right task is extremely important. The marketing mix suggests that an employee who actually wants to do the job is more effective than someone who is doing it because they have to. Remember; a motivated employee is an asset to your organization.
What is “Process”?
The process is basically the overall experience a customer will engage in whilst doing business with your business. The overall experience. Why do you think more and more people are opting to visit a supermarket these days? Therefore, make sure you establish proper processes in your business.
Finally, “Physical Evidence”
Every item that a customer touches or feels, engaging with your business are the physical evidence; packaging, signage, reception areas, shop displays, staff uniform, stock images, catalogues etc. This physical evidence determine the public perception about your brand.
Concentrating on 4 of 7 of the Ps is the Marketing Mix your business needs initially.