So many people talk about marketing and doing their marketing as if marketing and promotional activities are synonymous.

They’re not !

Marketing is the Product or Service, the Place where it’s available for customers to purchase, the Price people pay to acquire it and the Promotional activities you use to get visibility and credibility. This is known as the Marketing Mix or the 4 Ps.

Whether I’m teaching marketing courses to university students or to entrepreneurs I invariably find I have to reiterate this to my students.

So let’s take a few moments to get an overview of the 4 Ps of marketing.

We’ll start with the Product – after all without a product you don’t need to worry about pricing, distributing or promoting !

PRODUCTS

Products can be Tangible goods, Ideas, Services. For now let’s just consider tangible goods.

The product includes:

• the physical item itself
• it’s packaging
• warranty
• any service attached to it – for example learning how to use the item
• the brand
• the value to the customer – this might be the problem it solves and the intensity of that problem for the customer, it might be the image it conveys of them (think of Bic pens as opposed to Mont Blanc pens)

PLACE

Products should be available in a usable condition where and when customers want them.

PRICE

The price is what a buyer must give up to obtain a product. Price can be a competitive weapon. There are various methods for pricing products some of which we looked at in my blog post on pricing.

We may have the right products in the right place at the right price but the potential customer needs to be aware of our products and where they can obtain them. You need to use appropriate promotional activities to get visibility and credibility. Once you have that you need to regularly remind your customers and potential customers of your existence.

PROMOTION

Promotional activities can encourage sales by:

• Informing
• Educating
• Persuading
• Reminding

Which of these applies depoends on where your product is on the product life cycle – whether it’s a new product being introduced to a market and a level of educating is needed; whether it’s a new version of an exiting product and you need to inform people and probably persuade them to try your product or whether it’s a product that’s been around for a long time and you need to remind poeple that you’re still there in the market.

Your promotional activities could be any or all of the following depending on your customers and target clients.  It’s important to integrate all of these efforts rather than using them in isolation.

• Personal selling
• Advertising
• Sales promotion
• On-line promotion
• PR

In future posts we can look in more detail at promoting your products.

Related Posts:

A Product is not just a Product

Reaching your Customers

Displaying your Products

Pricing

Pricing Services

Getting Visibility

We live in an age where Word of Mouth (WoM) is critical for businesses simply because people increasingly trust other people’s opinions rather than believing what advertisers tell us about their products.

Each year Nielsen produce a report entitled Global Trust in Advertising. The Nielsen Global Trust in Advertising Survey polled 30,000 online respondents in 60 countries to gauge consumer sentiment about 19 paid, earned and owned advertising mediums.

The most credible advertising comes straight from the people we know and
trust. More than eight-in-10 global respondents (83%) say they completely
or somewhat trust the recommendations of friends and family. But trust
isn’t confined only to those in our inner circle. In fact, two-thirds (66%) say
they trust consumer opinions posted online—the third-most-trusted format.

This reinforces my argument that to sell your products and services you need both visibility and credibility. But how can you build credibility?

Let’s start by looking at an online business.

Building Credibility for an Online Business

You could build credibility in various ways – these are just a few suggestions:

• doing webinars so that people can hear you and interact with you
• being interviewed by a radio host  – this igves people the chance to hear you but it also has the advantage that you are being endorsed by someone that people like and trust
• interviewing someone who is well known and trusted – this enables people to see how you interact with someone they like and trust but also acts as an endorsement
• guest blogging on the blog of someone who is well respected by your target clients
• having someone who’s well respected guest blog on your blog
• being seen with the right people in the right places and posting those pictures on your Fcaebook Page or on Instagram
• being part of an offering by someone with a large audience that includes your target clients
• giving a talk on a membership programme – for example last year I gave a talk for Mari Smith and her Inner Circle
• if you’re delivering home study programmes delivering the programmes offline for a major university or organisation gives credibility. For several years I delivered my Idea Generator and From Idea to Launch programmes at McGill University in Canada. This gave me the credibility I needed for Dillington House in the UK to agree to include my Idea Generator Workshop in their 2016-2017 programme. Both of these give credibililty when I promote my online programmes.

My question to you

What do you do to build credibility for your business?

If you want to sell your products or services you need both visbility and credibility.  You might be visible but if your product is new or you’re an unknown then you also need credibility. In this post I’m going to look at getting visibility.

If you have an online business your visibility will be determined by your presence on social media sites whether Facebook, Twitter, Instagram, Linked in – depending on where your target clients are; your blog posts on your own blog and also guest blogging;  Facebook ads; your website if it comes up in searches in Google.  If you have an offline business then you may need to  advertise in local newspapers, distribute flyers, put up posters but there are other ways of getting visibility for offline businesses. Below are just a few examples that I came across recently on my travels.

In a local market in Split that sells only fruit and veg, this stallholder stood out from the crowd because of how her fruit and veg was displayed.

But how about this idea – snow in a main square in Prague in the middle of summer to attract attention to ČEZ Jizerské 50 – the 50th edition of the Jizerska – a cross country ski contest taking place in February 2017. I would question whether Namesti Miru is a location where they’re likely to find lots of cross country ski enthuusiasts – maybe it’s one of those good ideas that would be better somewhere else.

Being in a prime position can help with visibility for example this hut selling carved imestone by the side of the harbour on the Croatian island of Brac.

Bringing your product to the place where people most want it and are likely to buy, as in the case of this guy selling corn on the cob on a beach near Split, can also help with visibility.

If you can afford having a large, eye catching banner that’s great but ..

if you can’t then having a striking notice for your appartment can draw attention as this owner has done in Hvar Town (Croatia).

But no matter how visible you are you need credibility. In the next post we’ll take a look at how to get credibility.

Whenever I deliver my Let’s Start a Business programme I can be sure that I’ll get lots of questions about pricing.

At its most simple your pricing needs to cover all of your costs – both fixed costs and variable costs and enable you to make a profit. The costs should include the salary that you pay to yourself – most likely not the one you earned when you worked in corporate but at least a salary that enables you to pay all the bills and have some fun too.

When pricing you should consider the following:

• how you intend to position your product or service in the market
• what your target clients would be willing to pay
• the level of demand for your product or service
• the pricing strategies of your competitors

There are different pricing models – the main ones are:

• cost-based pricing
• value-based pricing
• competition-based pricing
• differential pricing
• premium pricing

Let’s take a look at them in a little more detail.

Cost-based Pricing

• Cost-based Pricing is a method commonly used by retailers and small manufacturers
• the cost of product/service is determined and used as the base, and then a markup is added.

Selling Price = Cost of Goods Sold + (Cost of Goods Sold x Markup percentage)

• some industries have norms for marking up
• there are occasions when Marginal Cost Pricing is used by a  manufacturer who wants to use spare capacity, keep employees working for example. Marginal cost pricing covers variable costs and makes some contribution to fixed costs.

Value-based Pricing

• Companies increasingly base their prices on an estimate of the market’s perceived value of their products or services
• Price is set by determining the price that people are willing to pay while ensuring that all costs can be covered.
• It’s easier to price on “value“ if your products or services are clearly differentiated from the competition
• with value-based pricing it’s essential to know who your target clients are so that you can analyse their needs and value perceptions

Competition-based Pricing

• in some situations consumers base their judgements of the value of a product or service on the prices that competitors charge for similar offerings

Differential Pricing

• This pricing method is used when different prices are charged for different group of customers. The prices can also vary with respect to time and location. The best example is mneral water which varies enormously from supermarket to corner grocery stiore, to major event such as Wimbledon to airports.

Premium Pricing

• some companies will charge more if they seek to position their product as high-end and create an aura of exclusivity.

If you would ask me what I recommend my response would be:

• know what your fixed and variable costs are and then calculate your break-even point so you know how much you need to sell to cover all your costs
• know how you intend to position your product or service in the market
• know your target clients really well – what they want, what they’re willing to pay
• know what your competitors charge
• take account of all of the above to set your prices and then go out and test them to see how much you manage to sell. If not enough to break-even then you need to adjust your pricing but also your cost base so that you can still break even and make a profit

Pricing services this is a far more tricky area and so I’ve devoted a post to  Pricing Services.

My question to you: what method do you use to price your products and why?

Pricing services can be really tricky.

These are some of my thoughts based on discussions with business owners, consultants and my own experiences.

• pricing services such as plumbing, electrical repairs etc would depend on what the usual price is in the market where you’re operating, the complexity of the task and most you charge a likely a premium for late night, weekend call outs. Some plumbers in my area don’t charge for night call outs but their hourly rates are higher than the average.
• for painting & decorating, house repairs you could base your pricing on the usual prices in the market unless you want to target people with higher incomes and you can present yourself and your business in a way that is less blue collar and more ‘consulting’ oriented
• for gardening if you just mow lawns and pull out weeds then your prices would be lower than someone who has studied horticulture and is advising what plants to put where, pruning plants, fruit bushes, trees. However just because you’ve studied horticulture doesn’t mean you can/should charge high prices if you’re just mowing lawns and pulling weeds. If you’re landscaping and redesigning gardens then of course your pricing will be higher and you’ll probably charge a fee for advice and some drawings and then a further fee for implementation of the project.
• for consulting and coaching yes you’d look at prices in that sector for that country but you’d also take account of the value to your customer – are you saving them a significant amount of money or enabling them to make a significant income. The latter of curse is difficult to ‘sell’ to a client. I recall doing research for someone wanting to invest in the care sector in Canada who quibbled when i was charging $75/hour but I was fast at research and excellent at sele ting the right resources so overall it was less expensive than taking a student on $25/hour who would have taken a long time and maybe not used appropriate and up to date information. If I’d attempted to price on the the basis of the millions that business venture would have earned him then you can imagine that he would have refused.
• text revisions and translations are usually based on the number of words and will reflect professional norms in that market. When clients are students then the fees are for text revisions are usually per thousand words and much lower. I’ve had a translation and text revision business for many years (GSPimpacts) but I simply don’t accept students as clients as I can’t afford to take work at minimum wage however I do sometimes do so for small registered charities. Usually there’ll be a professional body that issues guidelines regarding fees for text revisions and translations e.g. in the UK the Chartered Institute of Linguists.
• for accountants and tax advisers it would generally be the same – the various professional bodies will usually issue guidelines.
• hairdressers would probably price to the place they’re located in and the situation of their clients. My hairdresser in Trogir (Croatia) charges for a cut and high and low lights half what my hairdresser in the UK charges for just cutting my hair and no she’s not a fancy salon and not in London but a small town in the south west of England. My hairdresser in Montreal is twice as expensive.

There are so many more services and I’ve not covered them all partly so that you – my reader – doesn’t fall asleep reading but also in the hope that you’ll share your thoughts, experiences (as a consumer or as a business owner) in the comments section.

Products can be tangible goods, ideas, or services but for now let’s just consider tangible goods.

A product is more than just a product!

A product is more than itself.

Toothpaste is also the tube that it’s in and the box the tube is in.  Packaging is important. It attracts attention. It can help with brand recognition. It can even turn an ordinary product into something more luxurious, that a consumer is willing to pay a higher price for – think of tins of ordinary breakfast tea from Harrods !

A laptop is also the associated warranty.

An iphone is also the after sales service and even someone teaching you how to use it.

The brand is important in some products perhaps because it speaks to the reliability of the product or the innovativeness of the design.

The value of the product to the customer is also part of the product – this might be the problem it solves and the intensity of that problem for the customer, it might be the image it conveys of them (think of Mont Blanc pens as opposed to Bic pens).

So to summarise a product includes the physical item but some or all of the following:

• packaging
• warranty
• any service attached to it
• the brand
• the value to the customer

I would argue that the product also includes the way it’s displayed in a shop or on a market stall.  This can be a strong way of differentiating your products from competitors.

Why not reflect on your views on products?  Why not think about your products and the ways in which they’re more than just a product or could be made to be more than just a product.

Share your thoughts and suggestions!

Related blog posts:

Displaying your products

Differentiate yourself from the competition

It’s Saturday. My two week summer school in Split where I was teaching an intensive Fundamentals of Marketing course has ended. Today was a day off with a Canadian friend who’s traveling in Europe.

Why don’t YOU take the day off and come on a little journey over to the island of Hvar off of the coast of Croatia? No talk of marketing or business strategy or anything to do with work at all – just a touristy day out in Hvar town.

Hvar is a lovely island off the coast of Split with vineyards, olive groves, fruit orchards and fields of lavender, its limestone hillsides covered in pine forests.

Over the centuries the island has been colonised by the Greeks, been part of the Roman Empire, then part of the Ottoman Empire,  then a Venetian Protectorate, owned by Hungary then regained by the Venetians, annexed by the Hapsburg monarchy, seized by the French and then by the British, regained by the Austrians, occupied by Italy and finally becoming partof Yugoslavia and recognised as an independent state in 1992. Wow!

For a long time it’s been a favourire destination with tourists – regularly listed in the top 10 islands by Condé Nast Traveler magazine.

We took the 9h15 Jadrolinija catamaran from Split which arrives at Hvar town at 10h20. And what a lovely town it is !

It was my first visit and I would love to go back and spend a week there. There’s so much to do and see and enjoy.

We walked around the various bays and dipped our feet in the water off the rocks.

I especially liked the idea of these curtained beds by the side of the sea.

We walked around the town and up it’s quaint winding streets.

We plodded up 200 steps and then along a path that winds through the pine forests and cactus to the fortress high above the town and harbour serenaded by chirriping cicados. Once at the top the views of the harbour and the other islands were stunning.

The fortress, or Spanjola, is built on the site of a Byzantine citadel. The current structure was begun in 1282 when Hvar was under Venetian rule.  By the 16th century the structure was more or less complete.  In 1571 the local people sought refuge in the fort when the Turks attacked the town. Over the centuries it has been repaired and adapted. In the 19th century when Hvar was under Austrian rule a large barracks were built beside the fort. There’s a smalll museum with a collection of ancient amphorae recovered from the seabed.

After we sauntered back down from the fortress we went to the harbour and settled in some comfy chairs at BB Club overlooking the harbour to enjoy some cocktails.

Then … reluctantly … we headed off for the bus to go over to the other side of the island and took the 20h ferry from Stari Grad back to Split.

Oproštaj Hvar – do sljedećeg puta!

Combined with getting visibility and credibility actually getting your goods and services to your target clients is crucial if you’re to succeed – and remain – in business. This is the Place part of the 4 Ps of marketing.

I was reminded of this the other day when I had the opportunity to spend a couple of hours on a nearby beach  after 6 hours of teaching marketing. As I lay there I heard a voice calling out and my mind flashed back to when I was eight years old and on my first overseas holiday with my parents. We went to Mallorca – at the time an upmarket place to go on holiday. Each day a man would come along the beach calling out his wares although I can no longer recall what he was selling.

Fast forward a few decades and there I am on a beach in Split when a man comes by calling out something in Croatian which sounded like cockeriko … Actually he was saying kukuruza – corn-on-the-cob – which he wrapped in a napkin and spinkled with salt. From the times he walked back and forth it seems that hot corn-on-the-cob sells well. This surprised me since it wasn’t a chilly winter day but the height of summer (34C) !!

So… aside from feeling sad that I’m no longer that little girl on the beach with all of her life in front of her and my mum and dad are no longer here the next thoughts that arose were – yes, you’ve guessed – marketing and business thoughts.  For me, the guy selling corn-on-the-cob was a great example of getting the products and services your customers want, where they want them, when they want them. And this all comes down to knowing who your target clients are and knowing as much about them as possible so that you can give them what they want, where they want it, when they want it.

Your business task for the day: Why not think about your own business and consider whether you’re doing this and if you’re not why not. Is it because you don’t know who your target clients are? Is it because you don’t know very much about them? Is it because their wants have changed and you haven’t kept in touch with them to realise this? Is it because the distribution channnels for your products are hard to enter for example getting a product onto a supermarket shelf or into a retail store?

What are you going to do about this?

You need to do something !! Your business success (and survival) depends on it!

Earlier this month I spent time in beautiful Prague.

The main reason was to deliver my Let’s Start a Business programme in a 30-hour one week version (the photo to the left is me with participants). But I also caught up with friends and took some Czech classes.

I discovered an organisation that offered open classes for foreigners so on four evenings of the week I had 90 minutes of beginners Czech. These classes cost the princely sum of 50 CzK (equivalent to 2$) – a bargain !!

Of course there were inconveniences: usually there were 30 people in the room; the teachers only used Czech and had different methods of delivering the lesson; some students already had a basic knowledge of Czech and most of the teachers worked to that level not the lowest level.

I experienced many frustrations – people chatting to each other in class; the varying teaching methods used by the teachers and of course my own reactions to my frustrations.

One evening, as the tram took me home and I looked out at the beautiful buildings that make Prague one of the most loveliest of cities, I started to list the lessons these Czech classes had for people starting out in business.

• it’s better to start than wait for the perfect situation
• take one step at a time in the direction of your goal
• even small steps towards your goal are worth taking
• if you really want to achieve something you’ll find a way
• persevere – you’ll get there in the end!  (and if you’re learning Czech you certainly need perseverence !!)
• don’t be quick to blame others – the fault may lie with you!
• anything cheap almost certainly has a downside
• know yourself – your strengths and weaknesses
• know your Why
• surround yourself with people who believe in you and are willing to support you (the girls at my Airbnb were giving me 10 Czech words to memorise each day)

So Hesky den to you all !

And please comment below – share your thoughts and lessons that life has taught you that are relevant to people starting a business.