You know your business needs to capitalize on marketing. But where should you start? Boost your knowledge by familiarizing yourself with the five P’s of marketing — product, price, place, promotion and people — also known as the marketing mix.
The concept of a marketing mix — a combination of tactics that a company uses to influence consumers’ buying decisions — was introduced by American marketing professor E. Jerome McCarthy in the 1960s. McCarthy developed the original 4 P’s to help marketers reach new customers and grow their businesses. Over the years, a fifth P — people — was added to better reflect modern business practices. The marketing mix is so important because it provides business owners with a framework for promoting their products or services to the marketplace.
What are the 5 P’s?
Look hard at the products (or services) you sell. Get specific on the benefit of what you’re offering. You aren’t simply selling a product or service; you’re often selling peace of mind, increased confidence, time savings or another benefit to your customers’ lives.
Next, more importantly, think about how customers will view your product. Define the core problem you’re helping them solve, because that’s what it’s all about: Helping people solve actual problems. How does your product or service do that?
Think about the way that Dyson vacuum cleaners are marketed. A regular vacuum cleaner solves a problem: helping people keep carpets clean. But Dyson has homed in on very specific issues and pain points such as the maneuverability of the vacuum. In doing so, the company sets itself apart.
To compete, you need to know the typical price points in your market. When researching those, take a look at the value you provide. How is it different from what other people are offering? Will customers pay more for your solution? To determine pricing, you need to know how your product compares to the competition. You’ll also have to think about how much you will have to charge to compete with other businesses while also covering your expenses.
When you go to the grocery store, for example, you see Kleenex brand tissue right next to a generic brand, which is cheaper. Some consumers will pay that extra money for the Kleenex if they think it means increased quality.
Nowadays, the place you occupy may not be a traditional storefront or office building. But your virtual place is still important. Consider your target audience and where they look for solutions to their problems. Try to find the places where your customer may be looking for help. For instance, someone might search online for “eco-friendly transportation,” and if you sell electric scooters you may have a website where they can make a purchase. The most important thing is to be accessible, easy to find, and where your market is — whether online or in an app or at a brick-and-mortar store.
You believe in your product and have worked hard to find the right price and place for it. How will you make customers aware of it? Start by creating messaging — marketing communications that describe your company and the value you offer — around the problem you solve for customers. For that electric scooter retailer, messaging would likely let customers know that they would be reducing their carbon footprint by using this product. After you’ve done this, use your target market understanding to promote where your customers are.
A few common, but effective ways to promote your product are through online ads, your website, your social media pages, brochures and building signs. But don’t be afraid to get creative. Iams, the popular pet food brand, printed their logo on frisbees shaped like weights to show that their food makes dogs stronger. They handed the frisbees out at dog parks.
Once you begin attracting customers, provide a great customer experience to turn one-time customers into raving fans who tell their family and friends about you.
Building strong relationships with customers is one of the best things a business can do, so focus on giving a great customer experience (e.g., providing excellent customer service, attending to customer needs and offering personalized service.)
While you focus on customers, don’t forget to engage your internal people, too; happy employees make for a successful business. Domino’s Pizza, for example, uses photos taken by their own employees to promote their pizzas on social media rather than strictly using staged, professionally shot images. It’s an effective way of promoting their product while also showing that they value the people who keep the company running.
It’s not an exact science, but do your best to make sure everyone in contact with your business feels heard and valued.
The five P’s in the real world
Need an example of the five P’s in action? Imagine you’re a bakery in small-town North Dakota. You’re introducing a new line of cake that is a mix of red velvet and angel food. Now what?
Ask why you’re creating a new type of cake. Maybe you want to introduce something new and fun that you hope customers love. Go deeper: Why should they choose this over a cake they already enjoy? In your mind, the benefits are that it’s new and exciting. But to customers, it’s unknown. Avoid using generic terms. Of course, your cakes are “delicious,” but so are other cakes. Descriptors that are so commonly used by your industry that they’ve become cliché won’t help you grab the attention of your target audience.
Get in your customers’ shoes. Think about the experience of eating the cake and sharing it with friends and family. Talk to your customers about a new type of cake that takes a celebration and makes it even more special.
Don’t assume that your audience always wants to pay less. Deals are great, but if your customers’ perceived value of the cake is higher than what you’re charging, you could be losing out on profits. What’s more, when you go to market with an unknown product at a price that is significantly lower than your competitors’ prices, your audience may think that that low price is an indication of poor quality.
An appropriate price point will likely be similar to other products your bakery already has. Don’t forget to factor in any additional labor, equipment or ingredient costs, if they apply. Then, look at nearby competitors to see how they handle special products. In the end, the cake’s price should enable you to reach your financial goals, be a number that your target audience is willing to pay and fit with the image you’re trying to project (a premium cake or an affordable new one worth giving a try).
When marketing your cake, stay away from places that might create unfortunate or confusing associations. You wouldn’t, for instance, put up a flyer at a nightclub where your message is unlikely to resonate with people who are focused on dancing or enjoying drinks with friends. You also wouldn’t place an ad poster for your new cake near a public restroom, for obvious reasons. Instead, you may choose to search for people during special events: graduations, birthdays and baby showers, perhaps. Utilize your local community and current customer base to spread the word about your new product. Consider partnering with a local restaurant to feature the cake on their menu. Or, create a new poster to hang in your store window or at a local party supply store.
A half-hearted promotional strategy will sink your marketing efforts before you launch. Simply posting an announcement about your new cake on Facebook, and hoping it gets traction isn’t going to work. Instead, you should devise a more comprehensive plan. Consider listing the cake as a limited-time offering and have a special discount for those wanting to try it. Put these discounts in newspapers or on other print marketing materials to encourage customers to give it a chance and promote it to their friends. Introduce it on social media, and consider sending an email campaign announcing the new arrival. Create messaging like “A slice of something new” for a new banner on your website.
When you’re excited about a new product, it can be easy to just focus all of your messaging and your launch plan on your business and how great this new product is. However, rather than talking about how you’ve revolutionized cake baking or that your bakery is a leader in the marketplace, think of your community. More than you want a sale, you want them to enjoy the experience of purchasing your baked items, from the moment they decide to visit your bakery until the last slice is finished. Treat them well with good customer service and by catering to their needs or questions. By creating a good experience with your bakery, you create loyalty.
No matter your business or industry, taking care to hit all five P’s will ensure you’ve got your bases covered. Consider what the five P’s look like for you and your business.