If you are spending money on marketing, and your sales are sagging – you need to evaluate your marketing strategy. Too often people fail with marketing because they focus on tactics without stopping to consider strategy. Think of your marketing like a funnel: start with the big picture goal and then work on lead generation to fill the funnel. It’s helpful to measure your marketing efforts too. It doesn’t make sense to spend money on email marketing if you are not checking your open rates. The 5 Ps of Marketing are the fundamentals of marketing and the best place to start looking for gaps in your marketing plan. Yes, I know the 4 P’s is what they teach in business school, but I take a slightly different approach. Here are SmallBizLady’s 5 P’s of Marketing to build your small business brand.
The 5 P’s of Marketing
Product
It’s imperative that you have a clear grasp of what your product is and what makes it unique in the marketplace before you can successfully tell the world about it. Your value proposition is key. But selling is not as simple as it once was. 81 percent of modern buyers make purchasing decisions based on buyer experience, not product or price. How does is it smell in your store? Do you offer complimentary water or champagne? Any product that you sell should speak directly to an urgent need that you’re solving for the customer or exclusivity. Your product needs the right features: it should be easy to use, visually interesting, and well packaged. If you own a catering business, your team delivering the service as well as the food are all consider the “product.” Make sure your staff present like a team with matching uniforms, that they are well trained in customer service, and that the food is nicely plated and properly served with a smile. Presentation is everything.
Place
The second of my 5 P’s of Marketing is Place. Where can I find your product or service? In-store, online, both? Placement matters. Often store-front businesses pay for prime locations, so they benefit from needed foot traffic. Doing location research is important. You want to be located on a highly coveted corridor, in a location that provides you easy access to the target customer. If you are a residential cleaning company, open shop in a neighborhood instead of a business district. However, if you’re focused on corporate clients, then a commercial district is where you want to be. Not having the right location is a reason that many mom and pop shops fail.
Promotion
Print this out and put it on the wall. “Without proper promotion to attract your niche target customer, you won’t grow your revenues.” As the third of the 5 P’s of Marketing, good promotion starts with a budget and marketing plan. Your website is your #1 sales tool. It should be leveraged with social media and email marketing to build prospects you can convert into customers. Social media allows small businesses low-cost opportunities to market your products and services. You can use blog, podcast, and video to attract your target audience, and Facebook, Google ads, pixels and retargeting campaigns to drive them back to your offers. If your customer is hanging out on Facebook, YouTube, Instagram or Twitter, you need to be there too, building relationships that you will eventually turn into commerce.
Price
Price determinations will impact profit margins, supply, demand, and your marketing strategy. If you sell multiple products, your brands may need to be positioned differently based on varying price points. You must price your merchandise to have perceived value for the customer. A customer who’s deciding solely based on price is not a long term customer, and they’ll switch to a competitor for just a few cents less. This is especially challenging when pricing your products on marketplace platforms like Amazon. You must know four things to develop your pricing model: your cost, what your competitors are charging, the standard markup in your industry, and your unique value to the customer. Ask yourself, “What will it cost the customer NOT to have what I’m offering?” If you can’t determine a perceived value, then you need to redesign or reposition your product.
Profit
The ultimate goal in business is to make money. Profit, the fifth of my 5 P’s of Marketing, is how we keep score in business. If you are not making sure you are pricing your products or services for maximum profit, what is the point of your business? If you run out of cash, you’re out of business. Your profit is what allows you as the business owner to enjoy the fruits of your hard work. Profit is the difference between your cost of goods sold and the price you’re charging the customer. How much margin you can earn depends on your particular industry and the marketplace. If you own a grocery store, margins are thin—only 3 percent on average. If you’re a food business, you will average a 15 percent margin, while a clothing retailer averages 50 percent.
There are no hard rules on marketing products and services; ultimately it comes down to what the market is willing to pay. As the 5 P’s of Marketing tell us, you must understand what you are selling, how it’s unique, and how it adds value for your customer. Be clear on the channels you will use to sell your products and services. Make sure you have a website that provides a great landing experience with helpful content. Have a clear pricing strategy based on all your costs, including overhead and administrative costs, so you can understand how much profit is in every sale or deal. When you focus on maximizing profit, there’s no limit to your financial success.
How will you use the 5 P’s of marketing to improve your marketing mix?
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