THE MARKETING mix is like a complex recipe for a special dish that you prepare in the kitchen. Each of the ingredients is essential. Each of the ingredients must be blended into the recipe in exactly the correct form and quantity, and at exactly the right time, for the dish to turn out tasting delicious.
There are seven Ps to the marketing mix. A change in any one of these ingredients can bring about a small or a large change in your business. Often, a change in one element of one part of the marketing mix can transform your business completely, from a small business to a large business, or if you are unlucky, from a large business into a small business. Let’s take them in order.
The first ingredient of the marketing mix is your product or service. This is the starting point. What exactly do you sell? The first part of the answer to this question is your product or service itself. What is it? How is it made? What does it do? What purpose does it serve, and so on?
The second part of the answer to this question “What is your product?” is what your product actually “does” to change, improve, or transform the life of your customer. This is the most important question that you must ask and answer for marketing success.
What would you say? Whatever your answer, this is the heart of your business.
The second part of the marketing mix is your pricing strategy. Exactly how much does your product or service cost to produce, including all direct and indirect expenses? On that basis, how much do you charge or must you charge in order to make enough of a profit to justify being in this business in the first place?
Your pricing strategy can make the difference between high and low profits. Sometimes, gradually increasing your prices by a few percentage points over the course of a year can dramatically affect your bottom line. Small but consistent reductions in your costs, without sacrificing quality, can boost your profitability substantially.
You may find that you have products or services where you are actually losing money each time you sell the product.
Sometimes, you can add a new product feature to your existing product and increase its perceived value and its price substantially. Sometimes you can remove a feature that your customers don’t care about and reduce your costs, increasing your profits in that way.
Pricing strategy is something that you must visit and revisit continually, for each product or service, throughout the life of your business. Small changes in your pricing can lead to dramatic changes in your profitability.
The third part of the marketing mix is the promotion. This is an umbrella term that defines everything that you are going to do to inform your potential customers about your product or service and persuade them to buy it from you rather than from your competitors.
Promotion begins with your marketing strategy. Who is your customer? What does your customer consider value? What is the key benefit or advantage that your product or service offers that no other competitors can offer? How can you explain or illustrate exactly the most important reason that customers should buy from you? Your answer to this question, your unique selling proposition, becomes the heart and core of all your advertising and promotional activities.
The fourth P is the place at which you sell your product or service. How and where do customers acquire your product or service once they have decided to purchase it? Do they get it from you directly, from your office or store? Is it sent by mail or e-mail? Changing the place where you sell your product can dramatically change the volume of sales that you enjoy and the profitability that you generate.
Amazon has become the biggest online retailer in the world, largely because of the places it locates its warehouses and the resulting speed at which it delivers its products and services.
In what way could you change your location or place of business, or your way of delivering your product or service to your customer in such a way that it would be more convenient and attractive to your customers, and thereby increase your business and repeat business? This is one of the great questions that can make or break a business.
The fifth part of the marketing mix is packaging, which refers largely to the visual impression that is made by any and every part of your business on your potential customer.
People are intensely visual. Fully 95 percent of the first impression that a person gets of your business, your product, or your service will be based on what they see with their eyes. They then make a decision in approximately four seconds on whether your product or service is good, desirable, valuable, worth the price, and/or better than your competitors’ product or service. In the next thirty seconds, they begin using what is called “confirmation bias.” This is when they justify, rationalize, and firm up the decision that they made in the first four seconds of visual perception.
What could you do, starting today, to improve the packaging of any part of your business? How could you make the visual impression of your products, services, people, or business more attractive and appealing? How could you improve the look of your brochures, printed materials, and website so that people are immediately impressed with their attractiveness at the very first glimpse?
The sixth part of the marketing mix is your positioning. This is one of the key elements in marketing and sales today, and it is as important as any other factor. Your positioning refers to the way that your customers and noncustomers think about you and talk about you after they have used your products or services, and when you are not there.
Theodore Levitt, of the Harvard Business School, said that “a company’s most valuable asset is its reputation.”
Your reputation is defined as “the way you are known to others, especially to your customers.”
How are your company and your products and services known to your customers? How are your products and services known or thought about by your noncustomers or your potential customers? It is essential that you know the answers to these questions and that you are working on improving these answers.
The seventh part of the marketing mix is people. In the final analysis, people do not buy products from companies. They buy products from the people in those companies that sell them to them. In my sales seminars, I point out one of the golden rules of selling: “A customer will not buy from you until he is convinced that you are his friend and that you are acting in his best interests.”
In our explanations of “relationship selling,” we point out that it is how the customer feels about you—the personal and human contact—that largely determines whether the customer will buy from you or from a competitor. We only buy from people we like or who are like us in some way.
Your choice of the people who interact with your customers can be the single most important factor determining your success or failure. You must choose these people with tremendous care. Who are the key people inside and outside your business who determine your level of sales? Who are the people who make that lasting impression that determines how your customers think and feel about you when you are not there?
Successful marketing is based on the accurate determination of the correct marketing mix. If your product or service is not selling up to expectations, or if your company is not generating the profits that you desire, usually one or more factors in the marketing mix requires alteration. This mix needs to be continuously revised and rethought in order to yield the highest possible sales and the greatest possible productivity. And there are always multiple ways that you can improve one or more of these seven factors.