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Small business marketing: Introducing The ‘Four Ps’

Sometimes it’s better to go back to the start so I’m going to take you back to a simple, founding marketing principle: the ‘Four Ps’.

It seems really basic but it’s important to redefine what we are talking about when we say ‘marketing’.

When most people talk about marketing they are usually only talking about advertising or, the ‘promotion’ aspect.

Collectively, the ‘Four Ps’ make up the ‘marketing mix’ for your business. Here they are:

 

Marketing Mix 4Ps

Product: An item that satisfies a customer need or want

Price: The amount a customer pays for a product or service

Promotion: Communications used to tell customers about your product or service. Includes advertising, public relations and personal sales and promotion.

Place: Broadly defined as distribution. Place is where transactions take place and how customers access your product or service.

From experience, the most common mistake people make with marketing is not putting enough thought into the Product and Place part of the mix.

Let’s say you develop an amazing coffee blend that you want to sell. It’s tempting to rush out and spend a lot of money on packaging and logos and websites without stopping to think about your supply chain and how you are going to get your coffee in front of customers so they will buy it.  Can you sell through a large retailer or pay money to a distribution company? Can you sell directly online in a marketplace like Etsy? Should you consider a franchise model? All of these decisions determine your pricing and margin and therefore, impact on your cashflow.

In a service business, one of the biggest challenges is scaling the Product. If you are known as being a brilliant architect, customers want to deal with you and you only. Personal branding and PR (Promotion) can create demand that is challenging to fulfill other than continuing to put your hourly rate up.

Discussion: Think about your business in the context of the ‘Four Ps’ model. What are your biggest challenges and parts that you need to give more attention to?

Who amongst your competitors is doing well and what are they doing different?

Leave Promotion out for now and think about the other three ‘Ps’. What can you do today to strengthen these areas of your marketing mix?

I’ll be over in Xero Community chatting over the next few days and I would love to hear your ideas. Join in the conversation.

Next in the series, we’ll be talking about competitor positioning and differentiation. Feel free to direct any questions below in the comments or over to Xero Community.

 

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3 comments

Kelvin Hartnall
27 March 2012 #

Hi Courtney, great article. Not sure about redirecting the discussion to this forum – I think that most people who read the blog article expect any resulting discussion to be part of the blog. It also restricts people who are not currently Xero customers from contributing to the discussion. So I’ll post my comment on both this forum and the blog.

I thought it was a great overview article of the marketing mix, and your observation that most people fail to put enough thought into Product and Place is an interesting one. I’d be interested though to hear some of your Xero marketing mix thoughts around this. For example, the ‘Place’ part of the mix is significantly different for Xero than it is for the incumbent competition. Your channels through accountants and online partners is a completely different strategy to the incumbents. What is your thinking about ‘Place’ for Xero and what other channels do you think are important? And how does that affect the other elements of the marketing mix for Xero? In summary, would love to hear some of your thoughts about Xero and the marketing mix.

Courtney Lambert
27 March 2012 #

Hi Kelvin. Thanks for your comment which is most welcome right here! You’re right that being an online product we don’t follow a ‘boxed software’ retail distribution model as some software companies do. We have two main markets: accountants and then direct to small business owners. To market to small business owners, we have an online strategy e.g. SEO. SEM. We have less of a reliance on traditional, paid advertising which is often a requirement to get retail support in a bricks and mortar store. Hope that answers your question and keep an eye out on the blog. Thanks.

Brazilian Coffee
28 March 2012 #

Very interesting and well presented points Courtney, considering this 4P’s gives more visual targeted outcome.

Cody

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