Understanding Marketing Basics will give you the upper hand before you commence any marketing activity. If you choose to outsource any aspect of your marketing activity, you’ll need to understand these basics to ensure you can brief your marketing agency or team.
The first concept any marketing student will learn is “The Four P’s” which is the cornerstone of any marketing strategy and has been a term in common marketing usage since the 1960’s. Think of the four P’s as the ‘levers’ a marketer has available to ensure they connect with a business’s ideal customers.
This is a tangible product or service that solves the problem of a specific end user. Knowing what you’re going to sell may sound obvious, however, some business types, especially service-based businesses need to understand exactly what it is they are selling.
For example, an accountant may sell each of the following which are all different services (products) and may require different segmentation strategies to connect with the relevant target market(s).
• Tax Advice and planning
• Tax return and lodgements
• Financial Planning Advice
• Business Planning
• Debt Recovery
If your business has different ‘segments’, you will need to clearly identify these and build a relevant client avatar for each. Having different market segments will impact on the decisions you make on the way you implement the remaining marketing mix.
NB: For most small to medium businesses, focusing on one market segment, or client avatar, is easiest. The largest and more mature a business is, the more likely it is able to competently market to multiple segments.
Obvious I know, but the price you sell your product or service for makes a big difference in the way your business will connect with your market.
Some products will have a lower price and margin, but be profitable by selling high volume – think chocolate bars, soft drink or movie tickets. Others will sell less volume but rely on high margins to connect with very specific end users – think Gold Class Movie Tickets, First Class Airfares or share trading advice. Pricing strategies will determine the channel of distribution and the target market a product will connect with.
Price elasticity significantly influences the next two P’s.
Promoting your product or service to your target market is a key component for success. Marketers can use traditional offline or online marketing or a mix of both.
Think advertising, PR, marketing collateral, sales teams, packaging – the list goes on. Just think everything that gets your product or service in front a consumer’s eyeball.
The following 5 metrics must be considered when developing a pricing strategy:
Fixed and variable costs in a business
The competitive landscape
Proposed positioning strategies
Business goals and objectives
Your Target Market’s ability to pay
One Product, Price and Promotional strategies have been developed, marketers determine where the product will sell ie: the distribution channel to get it to market.
Distribution channels include:
• Bricks and mortar retail
• Direct selling
Having the right product, at the right price, promoted well via the right distribution channel is ‘marketing 101’ and addressing these four areas form the basis of any marketing plan.
Before you embark on any marketing programme, understanding the four P’s will help you connect with your ideal Target Market and for the basis of your Marketing Plan.