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| 7 P |
Once
you've developed your marketing strategy, there is a "Seven P
Formula" you should use to continually evaluate and reevaluate your
business activities. These seven are: product, price, promotion, place,
packaging, positioning and people. As products, markets, customers and needs
change rapidly, you must continually revisit these seven Ps to make sure you're
on track and achieving the maximum results possible for you in today's
marketplace.
To begin
with, develop the habit of looking at your product as though you were an
outside marketing consultant brought in to help your company decide whether or
not it's in the right business at this time. Ask critical questions such as,
"Is your current product or service, or mix of products and services,
appropriate and suitable for the market and the customers of today?"
Whenever
you're having difficulty selling as much of your products or services as you'd
like, you need to develop the habit of assessing your business honestly and
asking, "Are these the right products or services for our customers
today?"
Is there
any product or service you're offering today that, knowing what you now know,
you would not bring out again today? Compared to your competitors, is your
product or service superior in some significant way to anything else available?
If so, what is it? If not, could you develop an area of superiority? Should you
be offering this product or service at all in the current marketplace?
The second
P in the formula is price. Develop the habit of continually examining and
reexamining the prices of the products and services you sell to make sure
they're still appropriate to the realities of the current market. Sometimes you
need to lower your prices. At other times, it may be appropriate to raise your
prices. Many companies have found that the profitability of certain products or
services doesn't justify the amount of effort and resources that go into
producing them. By raising their prices, they may lose a percentage of their
customers, but the remaining percentage generates a profit on every sale. Could
this be appropriate for you?
Sometimes
you need to change your terms and conditions of sale. Sometimes, by spreading
your price over a series of months or years, you can sell far more than you are
today, and the interest you can charge will more than make up for the delay in
cash receipts. Sometimes you can combine products and services together with
special offers and special promotions. Sometimes you can include free
additional items that cost you very little to produce but make your prices
appear far more attractive to your customers.
In
business, as in nature, whenever you experience resistance or frustration in
any part of your sales or marketing plan, be open to revisiting that area. Be
open to the possibility that your current pricing structure is not ideal for
the current market. Be open to the need to revise your prices, if necessary, to
remain competitive, to survive and thrive in a fast-changing marketplace.
The third
habit in marketing and sales is to think in terms of promotion all the time.
Promotion includes all the ways you tell your customers about your products or
services and how you then market and sell to them.
Small
changes in the way you promote and sell your products can lead to dramatic
changes in your results. Even small changes in your advertising can lead
immediately to higher sales. Experienced copywriters can often increase the
response rate from advertising by 500 percent by simply changing the headline
on an advertisement.
Large and
small companies in every industry continually experiment with different ways of
advertising, promoting, and selling their products and services. And here is
the rule: Whatever method of marketing and sales you're using today will,
sooner or later, stop working. Sometimes it will stop working for reasons you
know, and sometimes it will be for reasons you don't know. In either case, your
methods of marketing and sales will eventually stop working, and you'll have to
develop new sales, marketing and advertising approaches, offerings, and
strategies.
Place
The
fourth P in the marketing mix is the place where your product or service is
actually sold. Develop the habit of reviewing and reflecting upon the exact
location where the customer meets the salesperson. Sometimes a change in place
can lead to a rapid increase in sales.
You can
sell your product in many different places. Some companies use direct selling,
sending their salespeople out to personally meet and talk with the prospect.
Some sell by telemarketing. Some sell through catalogs or mail order. Some sell
at trade shows or in retail establishments. Some sell in joint ventures with
other similar products or services. Some companies use manufacturers'
representatives or distributors. Many companies use a combination of one or
more of these methods.
In each
case, the entrepreneur must make the right choice about the very best location
or place for the customer to receive essential buying information on the
product or service needed to make a buying decision. What is yours? In what way
should you change it? Where else could you offer your products or services?
Packaging
The fifth
element in the marketing mix is the packaging. Develop the habit of standing
back and looking at every visual element in the packaging of your product or
service through the eyes of a critical prospect. Remember, people form their
first impression about you within the first 30 seconds of seeing you or some
element of your company. Small improvements in the packaging or external
appearance of your product or service can often lead to completely different
reactions from your customers.
With
regard to the packaging of your company, your product or service, you should
think in terms of everything that the customer sees from the first moment of
contact with your company all the way through the purchasing process.
Packaging
refers to the way your product or service appears from the outside. Packaging
also refers to your people and how they dress and groom. It refers to your
offices, your waiting rooms, your brochures, your correspondence and every
single visual element about your company. Everything counts. Everything helps
or hurts. Everything affects your customer's confidence about dealing with you.
When IBM
started under the guidance of Thomas J. Watson, Sr., he very early concluded
that fully 99 percent of the visual contact a customer would have with his
company, at least initially, would be represented by IBM salespeople. Because
IBM was selling relatively sophisticated high-tech equipment, Watson knew
customers would have to have a high level of confidence in the credibility of
the salesperson. He therefore instituted a dress and grooming code that became
an inflexible set of rules and regulations within IBM.
As a
result, every salesperson was required to look like a professional in every
respect. Every element of their clothing-including dark suits, dark ties, white
shirts, conservative hairstyles, shined shoes, clean fingernails-and every
other feature gave off the message of professionalism and competence. One of
the highest compliments a person could receive was, "You look like someone
from IBM."
Positioning
The next
P is positioning. You should develop the habit of thinking continually about
how you are positioned in the hearts and minds of your customers. How do people
think and talk about you when you're not present? How do people think and talk
about your company? What positioning do you have in your market, in terms of
the specific words people use when they describe you and your offerings to
others?
In the
famous book by Al Reis and Jack Trout, Positioning, the authors point out that
how you are seen and thought about by your customers is the critical
determinant of your success in a competitive marketplace. Attribution theory
says that most customers think of you in terms of a single attribute, either
positive or negative. Sometimes it's "service." Sometimes it's
"excellence." Sometimes it's "quality engineering," as with
Mercedes Benz. Sometimes it's "the ultimate driving machine," as with
BMW. In every case, how deeply entrenched that attribute is in the minds of
your customers and prospective customers determines how readily they'll buy
your product or service and how much they'll pay.
Develop
the habit of thinking about how you could improve your positioning. Begin by
determining the position you'd like to have. If you could create the ideal
impression in the hearts and minds of your customers, what would it be? What
would you have to do in every customer interaction to get your customers to
think and talk about in that specific way? What changes do you need to make in
the way interact with customers today in order to be seen as the very best
choice for your customers of tomorrow?
People
The final
P of the marketing mix is people. Develop the habit of thinking in terms of the
people inside and outside of your business who are responsible for every
element of your sales, marketing strategies, and activities.
It's
amazing how many entrepreneurs and businesspeople will work extremely hard to
think through every element of the marketing strategy and the marketing mix,
and then pay little attention to the fact that every single decision and policy
has to be carried out by a specific person, in a specific way. Your ability to
select, recruit, hire and retain the proper people, with the skills and
abilities to do the job you need to have done, is more important than
everything else put together.
