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Marketing is commonly defined as "putting the right product in the right place, at the right price, at the right time." Though this sounds easy enough to do, a lot of hard work and research has to go into setting up a successful marketing campaign. If even one element is off the mark, a promising product or service can perform worse than expected, or even fail.
Preparing for a marketing campaign is where the marketing-mix comes into play. The use of a marketing mix is an excellent way to help ensure that your business is "putting the right product in the right place." The marketing mix is a crucial tool for understanding what your product or service can offer, and how you can plan for a successful product offering. The marketing mix is commonly executed through the 4 P's of marketing: Product, Price, Place, and Promotion.
Each of these 4 P's can be examined independently. However, in practice, they are often dependent on one another to create a successful marketing campaign.
Your product or service should be the essence of your business. In many ways, your product is the most critical ingredient in the marketing mix. Without it, you don't have a place in the market. You certainly can't sell or advertise something that doesn't exist or doesn't have any demand. Marketing a great product is much easier than marketing a product that no one wants.
For example, In 1975, Gary Ross Dahl started selling a Pet Rock for $3.95 each. That's about $18.82 in 2020. He made over $1 million selling a tongue-in-cheek product that you could find in your back yard. However, he packaged it in a box with air holes and included a booklet that included directions on how to "care" for the rock. His product was not merely a rock. His product was the idea.
Even if your product is intangible, such as an insurance policy or consulting service, it should still stand out in the marketplace. Either because it does something that nothing else in the market does, or because it does—or at least strives to do—something better than everything else on the market.
When considering your product's place in the marketing mix, you should be able to answer questions such as:
There's a reason that you see products priced at $9.99 more often than $10.
The marketer's challenge is to come up with a price that is attractive to consumers while still turning a profit for the company. Even though there's only a one-cent difference, 99 cents sounds like a much better deal to consumers than a whole dollar.
One of the reasons using odd numbers and the famous ".99" may be due to a study by William Poundstone and his book Priceless. In his book, he uses multiple case studies to prove that prices ending in 9 boosted sales by an average of 24 percent, compared to those prices with rounded figures.
Many factors come into play when determining the price of your product or service, such as competitor's prices, cost of materials and production, and basic supply and demand. Beyond these factors, there are situations in which companies artificially inflate the price of a product to increase perceived value, or even charge less than a product is worth to build customer loyalty.
What you charge for your product or service not only determines how much money you can make but also how you're perceived in the marketplace. Do you want to be known as the high-end, luxury option? Or do you want to be known as the customer-friendly, affordable value option? The way you choose pricing is a large part of informing how customers perceive your business.
Now, before you start selling a rock for $20, or a t-shirt for $150, you'll need to map out the scalability of your product or services. Be honest and conservative with yourself about how many products and services you think you can sell. Sure, you may be able to work from sun up to sundown, selling your services for pennies on the dollar, and make an honest living. Still, you could make just as much money in half the time if you adjust your pricing. Yes, your target market will decrease, but the amount of money you earn for your time will increase.
Pricing is one of the most challenging pieces of the marketing mix because it's hard to gauge. Surveying friends and family, they will be happy to tell you that they will pay X amount of money for your product or service. However, when it's time to purchase your product, they suddenly don't have the cash on hand.
Pricing is one of the most challenging pieces of the marketing mix because it's hard to gauge. Surveying friends and family, they will be happy to tell you that they will pay X amount of money for your product or service. However, when it's time to purchase your product, they suddenly don't have the cash on hand.
Additionally, people aren't great at estimating the value of a great product that they need. If you're surveying potential customers with a magic mop that cleans a house on it is own, those in the cleaning industry may say that it's priceless. However, because of the economics of the industry, employers may soon find that they can hire more workers because there is less demand for cleaning crews. Therefore the companies who once said your product was priceless, discover that it's cheaper not to use the magic mop, and hire more workers instead. Now your target market is the homeowners that hire these cleaning companies and how much they are willing to spend on the magic mop to replace a cleaning staff.
As you can see, pricing quickly becomes complicated, and modeling is essential. Scouting the competition, evaluating the current market, and consistently monitoring your break-even point will make things easier. Spreadsheets and hiring someone with a background in finance can make the difference between bankruptcy and success.
It's "location, location, location."
Whether brick and mortar or digital, location is how your business gets its products and services in front of interested consumers. In marketing, where and how your customers are exposed to your product is the foundation for any successful strategy.
"Place" can mean many things in many different situations, from a product display in a retail store to an internet ad, or even product placement in a movie. The critical question that marketers must ask themselves is: how can I make it easier for customers to find my product? Additionally, what is the most efficient way to get my product in front of customers?
On the one hand, "place" can mean how visible your product was in the physical marketplace. But in the modern world, where customers can see your product on the internet can be even more critical. Your reach in the physical world is limited by physical space, while your reach online can be global. For example, is your product promoted on the front page of Amazon, or an obscure web site? Where your product or service is seen can have a considerable effect on the way your business is perceived.
You could have the best product in the world on a terrible website and be outsold by a mediocre product on a great site. Comparatively, a company can have a superior product but be relatively unknown in the market because a competitor has saturated the marketing space.
Promotion includes concepts such as brand awareness, social media marketing, sponsorships, and more. Any interaction that your company has with the consumer regarding your product falls under the umbrella of promotion. In many ways, how you promote your product or service allows for more creativity than any of the other P's.
Promotion is closely related to "place" in the marketing mix. The difference between the two is that place is more about passive visibility. At the same time, promotion is more about active communication.
Every interaction you have with the consumer will become part of the story of your company in the mind of the consumer. Do you want them to think of your company as trustworthy, playful, or offbeat? Or do you want to be known as cold, uncaring, or greedy? Your brand voice should be reflected in every communication you have.
Promotion is also a great example of how the pieces of the marketing mix work together. Running sales will affect pricing as well as force you to think about how you're going to get the deal in front of customers. What percentage of a discount you can afford, as well as how many customers can benefit from the sale, is also important. You will also have to think about what demographic you are targeting, where you want them to see your promotion, and where they can redeem it.
The marketing mix is a flexible tool, and the focus on any of the 4 P's may be increased or decreased based on your business' unique marketing conditions and customer requirements.
Because the marketing mix is made up of four unique variables, the 4 P's of your campaign should be planned in conjunction with one another to ensure that your product or service is being marketed to its best benefit. Through the use of the 4 P's, your company can achieve its marketing targets such as sales, profits, and customer retention and satisfaction.
However, just like any tool, if it makes things more confusing for you to use it, or you don't feel the benefit, you don't have to use it. The Marketing Mix is meant to help you stay organized, cross your Ts and dot your "i"s, and make sure you don't forget a piece of the puzzle. After all, it would be pretty embarrassing if you set up a fantastic marketing strategy and forgot about an important part.
Not all marketing is product-focused. Customer service businesses are fundamentally different from those that are based on physical products, so they often will take a consumer-centric approach. A consumer-centric approach may incorporate additional elements to address their unique needs. If you own a customer service business, it's often helpful to look at three other P's to add to your marketing mix: people, process, and physical evidence.
Traditionally, marketing begins with identifying the consumer's needs and ends with the delivery of a final product or service. Consumer-centric marketing is more cyclical. Reassessing the customers' needs, communicating frequently, and developing strategies to build customer loyalty are the goals with these additional three P's.
Companies need to focus on every element of the marketing mix while planning for a product launch or marketing campaign. Then companies need to adjust their marketing campaigns as parts of the marketing mix changes. Changing strategy based on what will work most effectively for that specific product or service, at the time, is what separates successful companies from bankrupt companies. A compelling marketing mix can mean the difference between a "flash in the pan product" or one that is bound to become a well-loved classic.
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