As one of the quickest ways to access marketing, we want to introduce you to the Marketing Mix, also called 4P. The Marketing Mix, while a classic concept, has its limitations in service-based industries in particular, but people find it easy to remember and hence return to it again and again. This blog post is part of our Marketing Basics series.
In This Post
We will discuss the following in this blog post:
- An Overview Of 4P
- 1. Product
- 3. Place
- 4. Promotion
- Wrapping Up
An Overview Of 4P
The 4P of The Marketing Mix stand for Product, Price, Place and Promotion, and are at the heart of marketing planning.
The 4P make up part of the third step in a generic five-step marketing process, which we outlined in the first blog post of this series. Now let’s take a closer look at each P.
If we creatively replace the first P of four, Product, with “offering”, it is the thing of value that your customer will procure in exchange for money.
Phrased differently, the customer brings value to you in the form of money, and you hand over to them a physical or digital product, alternatively a service, which they perceive as valuable. Your offering is valuable to them, because it fills a need or a want, both of which are subjective.
Were you to dig deeper, you might find a surprising reason behind their decision to purchase. In your marketing efforts you could draw far too simplistic conclusions when first doing the work of segmentation, targeting and positioning.
For this reason it is crucial to emulate the mindset of a scientist: start with a hypothesis around your intuitively created offering, go small, test for a response, and analyse these initial results. If you went all in, and for example invested a lot in inventory, only to have it collect dust on your shelves for years to come, you tied up capital for no good reason. However, if you were less bold in your first dipping of toes in the kiddy pool, you can draw them back on dry land without major crisis, adjust and perform a second test.
It is not enough that you yourself would love what you make, but others have to join you in perceiving value.
In the world of digital products by small-business owners, the largest type usually is the course. The scientist mindset comes in handy especially in the so-called validation phase where you figure out whether a specific topic could be lucrative to spend time making. Creating a course from scratch is an enormous undertaking, if nobody would buy it once it is finished.
In my own shop for craft items I have found that asking customers for comments on potential new additions to the shelves, or their own product requests, can work beautifully. Don’t be shy if you feel stuck in your work, but ask for example in an email or through a fancier SurveyMonkey poll. If you can’t make something happen straight away, file it away for future reference!
A big mistake small-business owners make concerns the second P, Price. They either ask for hobbyist-level prices and thereby close the door permanently to any sort of decent revenue, let alone profit, or they give in to peer pressure, which says they should price the product at something so astronomical that few will buy.
Will you go for low prices and large volumes, or high prices and few sales? Or something in the middle?
One size does not always fit all. Just because “they” say you “should” raise prices, the tactic may not work in your industry or location as is. Or perhaps it could work, but it would be too stressful for you in your current life circumstances to ensure only five customers will pay your premium price every month.
Remember, a premium price for one product means continuous hunting for new customers, if you have nothing else to keep existing customers engaged with after their first (only?) purchase.
The topic of pricing is far more nuanced than it may be perceived as at first glance, so take your time with this. Our recommendation is a mix of “small” and “large” products as well as services, if at all possible, to avoid putting all eggs in one basket.
Generally speaking when Price is concerned, you should avoid using your own wallet size as only point of reference. Whether you yourself are wealthy or struggling, your targeted segment may engage with money very differently, and hence be prepared to pay something you had not even considered possible.
The third P, Place, may sound cryptic, but it simply means the channels through which you will sell the offering in question.
Will the sale happen in your own shop, a pop-up shop, a market or fair, through consignment, a private small event, or online, for example in your own webshop?
Not all offerings will need the same channels, and be sure not to miss potential avenues where you first didn’t consider sales possibilities either.
The fourth and final P is Promotion, the marketing efforts of your offering. How will you promote it, get the word out?
Today most firms have an online presence and it is helpful to think of the website as the home of the business. Even when you have a brick-and-mortar shop or other type of physical presence for commerce to happen, a lot of marketing happens digitally.
The first step when considering marketing therefore is to ask whether people can find you by accident when walking past your shop, or perhaps you will need other tactics in addition. When existing customers move away from the area, they can take their business elsewhere, and once people reach old age or die, they stop shopping altogether. A changing customer base means you might have to rely on more than mere chance to secure business.
If you don’t need a physical space for your business, things get far more complex in terms of promotion. Will traditional marketing work such as ads in newspapers and magazines, billboards or tv commercials? Or do you need modern, perhaps budget-friendly options in the shape of digital marketing?
Digital marketing can be both interesting and overwhelming due to its sheer number of options. You can categorise them in many ways, but to mention a few broad groups there is email marketing, social-media marketing and search-engine optimisation to consider.
Even something as simple as email marketing can be implemented in a vast range of ways, so be sure to keep testing if it doesn’t work immediately. Social-media platforms are notorious for changing their algorithms, it is easy to get caught up in chasing vanity metrics, and platforms themselves change as well.
Regardless of which tactics you choose, it is a good idea not to be “everywhere”, but focus on a bare minimum of channels first. Get to know them well and be prepared to jump ship if efforts don’t convert into sales to a satisfactory degree. Raising awareness isn’t wrong, but you also need sales.
In the end, you don’t own much beyond your website and your email list. When overwhelmed and/or confused, bring things home to your website.
Activities you do in your digital home tell search engines that stuff is happening there (it is not collecting dust), and whatever content you create for the website, whether pages, blog posts or product descriptions, can be repurposed for your other marketing channels.
As for the marketing frequency, it is better to show up regularly once monthly than five days a week for three weeks straight after which there is silence. When you create consistently for example one blog post a month, you can safely increase the number in small increments. Or if the blog is of no major relevance, do this on your social-media profile(s) of choice.
It is easy to compare oneself to others in social media in particular, but as stated above one size absolutely does not fit all. Try to figure out the absolute bare minimum of promotion activities, then focus your efforts on the creation of new products or services, and stay in touch with existing customers.
It is said that generally it costs 5-25 times more to sell to new customers compared to the existing ones, so spending time on improving the chances of repeat buyers showing up is doing better business.
In my craft shop it seems like someone had mentioned it on an unknown-to-me social-media platform, because all of a sudden new customers showed up to buy products that previously had not sold much at all. Word-of-mouth is the best marketing you will ever have, since it does not cost anything but also pushes the trust button.
Customer Experience as a field of business is so important that we have made its own blog category of it. If you nail customer satisfaction, customer delight, and finally customer loyalty, you have struck gold.
Many small-business owners find marketing icky, but remember it is the only revenue-generating function in a business whereas the rest use money. When you know what makes your offerings amazing, it is easier to spread the message to potential customers, so be sure not to speed through this part of doing business.
Please share your comments and questions in the comments below!
This blog post is part of our beginner-level series Marketing Basics.
Photo credit: Miryam Léon.