Today I want to talk about something very important to any company; something we would refer to as the Marketing Mix or “The 4 P’s”. This common term refers to product, price, place, promotion. It is a marketing tool that will help your business grow. Every product everywhere has a life cycle as well as a plausible success rate that will hinge on where each of these elements is focused within any point of that life cycle. The idea of “The 4 p’s” is to view each of the separate components and make sure they are placed in the right place at the right time. Often these elements will need to change at different levels of success. Where it can get hairy is if a business changes their marketing strategy which requires a refocusing of “The 4 p’s”. Often aspects of the marketing mix will need to be adjusted in synchronicity with each other in order for them to work.
Now there are no rules to this in terms of the order. Actually the main purpose of this is showing how they are connected and none of them independent, but just the same most marketers would start with product. What is the product specifically? Who typically uses it and for what purpose? Does the product have an alternate use you haven’t previously considered? What do people like about it? Why would someone buy it over its competitor? In general, these are the types of questions about product we want to consider.
To demonstrate the house of mirrors that is the 4 p’s let’s take an example. My example will assume a lot of specific scenarios with the idea of showing the life cycle of a product and how “The 4 p’s” can change and influence each other. Let’s say you are an electronics manufacturer with a new economy line of very affordable computer accessories. You are able to do this in such volume in production out of China that you decide to strike up as many deals as you can across the country with what we would call “Dollar Stores”. Now if you’re not familiar with one of these establishments, the idea is you go into the store and everything in the store is around a dollar and items tend to max out at $10 in my experience. If you start selling wireless mouses out of the dollar store, in terms of the consumer nine times out of ten the price actually becomes the product. In this particular instance we’ve structured it so that the only person who is going to find the product at all is for whatever reason looking for the cheapest items they can. Maybe they are low income and have to resort to buying as much as they can on an economy scale. It could also be the case they are super thrifty, and before making most purchases they will try to locate the item at such a store. It could also be they are not even looking for the product, but come across it and see it as a good deal. The point is this: if time was more important than money in this example the customer would go to a Staples or a Best Buy where there are guaranteed computer accessories including an assortment of mouses. But when you make the place into the dollar store, you’re doing yourself a disservice by not admitting the fact that the individual price compared to competitors has become irrelevant, and the product itself is now considered equal to with how cheaply it can be acquired.
In two years this new line of cheap mouses is selling well in the dollar stores, but you’ve decided it’s just not enough market share and you’d like to expand. There have been stories of people really liking your design and finding it healthier on customers hands and wrists which is a positive thing. So you decide to expand where you sell this mouse to include Staples. So now, your product stands shoulder to shoulder with its competitors in a different “place”. You figure you’ll sell more of the mouses, but you don’t. After some research you figure out you had actually had the wrong “price” for this particular “place”. In the end what has been happening is, IT professionals, graphic designers, systems administrators etc are all seeing the product, its packaging and pricing and being skeptical. They are not convinced the mouse will last for them in their professional setting where it will get used quite a bit, and needs to work reliably. They think, “How could they make a quality mouse and charge so low? Something must be off.” And there you have it. A perfect example of something not being priced high enough to sell. And this actually happens a lot more than people think when transitioning from personal to professional style items.
After you pick up on where you went wrong with “price”, you actually start to put all the pieces together, but this time much better. You figure out you have a loyal following that loves the ergonomic design enough to incorporate actual testimonials into packaging and now can become synonymous with the “product”. You decide to give the product it’s own name: “Health Mice”. You talk with your factory in China, and at the volume you’re looking to produce they can use a higher quality plastic in a variety of different colors. Now you can put the product any “place” computer supplies are sold and charge a “price” similar enough to competitors to be taken seriously, but less by about 10% on average.
Then it dawns on someone why not charge even a little more than competitors with the option of a rebate “promotion”. Suddenly these mouses are doing really well because people tasked with purchasing electronics accessories see the value in the products appealing ergonomic design, it’s priced around average but with a promotional rebate they will take advantage of, and it is placed in retail stores and over the web for convenience. Then of course only a fraction of the people remember to cash in on the rebate, and when they do you can set it up to have them fill out a survey which can be used to develop more products. And that turns out to be a good thing because the competitor you were taking market share from, just fired back with “Smart-Mice” which is a product that rips off 80% of your design but it has a security lock on it so that it only works with one users hand that it is specifically calibrated for. Most people think this function is stupid and unnecessary, but when you put the work “smart” in front of something people will buy it no matter how stupid it is.
Health Mice wind up being sold in a different place for a different price: near the cash registers at drug stores next to batteries, CD-Rs, and something people call “camera film” for about a quarter of the price when you started to rebrand. However, cost per mouse is still very low so all actual sales remain very profitable, and guess what? People still talk about that awesome ergonomic design, and it still sells! In the end, Health Mice allow you capital to develop new and more exciting products.
If you’re a business starting out today or an established company looking to launch a new product line, reviewing your marketing mix with a marketing professional will save you time and money. Though “The 4 p’s” appears to be simple, misjudging them often becomes costly.
Written by Guest Blogger – Ken Pellegrino. Ken Pellegrino is a freelance writer and part-time marketer at Purple Diamond LLC with a background in business management, marketing, sales and customer relations. A graduate from Salem State University’s Bertolon School of Business with a Bachelor of Science Degree in Marketing, Ken shares his passion for marketing and sales with the owner of Purple Diamond, his mother, Charlene St Jean. In addition to his love of marketing, Ken is also a talented guitarist who enjoys both writing and playing music.