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:
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.