Originally posted on June 11th, 2019
Basics Marketing Communications & Fundamentals Every Business Should be Using
Most business owners and managers have heard about the marketing mix or the 4Ps of marketing. This topic is covered in-depth via many sources including E. Jerome McCarthy who developed the concept, therefore I will not regurgitate what has already been written. What I want to focus on is how the 4Ps integrate with digital marketing strategies. Specifically, what is the digital marketing mix?
- What is the marketing mix
- The digital marketing mix
- Marketing mix checklist
TL;DR check out this short video on the 4p’s. It is concise and to the point.
What is the Marketing Mix, aka The 4P’s of Marketing Communication?
Let’s quickly recap what the elements of the marketing mix consist of and how they apply to your marketing strategies.
The marketing mix is defined by Philip Kotler as a “set of marketing tools that the firm uses to pursue its marketing objectives in the target market.”
What does that mean? Every business has at least four elements that they need to integrate into their marketing plan to ensure the business is successful. This includes:
Also known as the 4Ps of marketing, this concept was coined in the 1960s and has been a go-to model for marketing strategies. But, times have changed. With the arrival of the Internet and smartphones the concepts of product, price, place, and promotion also need to change.
The Digital Marketing Mix
The four P’s of the digital marketing mix are:
This refers to the ‘thing’ a user wants. This can be physical (tangible) or services (non-tangible). Products can be anything from a keyboard to tires, to bungee jumping or home insurance.
You are in business because you offer something of value that is wanted/needed by a consumer. Ideally, a consumer has a demand and your business has the ability to supply a product the met that demand. Remember the demand vs. supply curve from high school? This is phase one of the relationship and it is most crucial when getting started.
A marketer’s first task is to understand what the product has to offer or its unique selling proposition (USP). What makes this product valuable to a consumer?
As I am sure you already know too well, just because you have a great product/service does not mean people know about it. Marketing is fundamental to helping users become acquainted with your offering. It is also the reason why elements such as promotion help connect the product to the target audience.
Avoid Failure: Focus on the Consumer first
A lot of businesses think they have a great product and then try to market it to the public. However, they are not putting the end-user first. They have not asked the fundamental question. Do people need/want this?
It is far more practical to identify and satisfy, rather than develop a product and hope it will strike lightning.
For example; where I live in Lancaster, PA there is a lot of corn grown. This area has great farming conditions and there is a high demand for corn in summer. There is an opportunity for farmers to make a sustainable living because of the demand for corn. If people did not eat/like/demand corn in summer, then it would make the practice of farming corn less worthwhile.
I know this is a simple example, but it is estimated that 80% of all new businesses fail, and the biggest reason for failure is a lack of understanding of the demand from the end-user.
Product Questions to Ask Yourself
- Do you know what consumers are demanding? What does the customer want from the product? What needs does it satisfy?
- What is your unique selling proposition?
- What advantages does your product offer to meet the user’s needs?
- Are there features not included with your offering? Are there features a competitor product has that yours does not? Are there features that the consumer does not deem valuable or worth paying for?
- How do you differentiate your product/service compared to your competitors?
- Does your product have a name? How is it branded?
- How do you intend consumers to use your product? Are they using it correctly? Where will they use it?
- What is the lowest cost you can charge while still selling enough to be profitable? What is the profit margin?
Pricing is a simple concept to understand but has deep psychological implications that businesses need to embrace. Price is what the consumer is willing to pay for the goods/services that your business offers.
Pricing strategies are a tricky concept for many businesses. Prices that are too high push users to search elsewhere. Prices that are too low cut into your profit margins. Understanding your target audience and what they value will be useful in establishing the best pricing strategy to implement.
I believe that a large part of the answer to the pricing model lies with the user and what they perceive as value. Businesses need to understand the opportunity cost or the sacrifice the consumer is making in order to acquire your products/services.
For example, I have $200 to spend on Facebook ads that might generate leads, or I can use that $200 to put towards Google text ads. If I spend the money on Google ads then I forfeit the opportunity Facebook ads might bring in.
With pricing and value, it all depends on what is most important to the user. Will Google or Facebook get me the leads I need? Which is the most cost-effective? Which is easier to manage? Where is my target audience most likely to be?
Online Pricing Comparison
Another factor to consider is online pricing. Consumers are able to price check and compare offers. Consumers are able to gather more information to determine the value of a product and if it is worth the sacrifice.
It’s not always practical to show your prices online, especially if there are many variables that could affect the final sales number. Some prices are custom, based on the unique needs of each consumer. Just be aware that consumers are looking for ways to measure value online and the price is a quick signal to identify that. If users are researching prices, your business should highlight that value as quickly as possible. Are your competitors showing prices? What is your Online Value Proposition (OVP)?
Factors That Affect Product Pricing:
- Competitive offerings and prices
- Market share
- Product branding and quality
- Materials or input costs
- Customers’ perceived product value and fair price.
Example: Reduced Overheads = Lower Prices
With e-commerce websites and online suppliers, overhead costs (e.g. cost of a physical location) are reduced. This, in turn, can lower product prices, attracting potential consumers and allowing for your business to be more competitive.
Example: Custom Real-Time Pricing Update
Websites can create custom pricing options for the specific segments that they are marketing to. For instance, each state has different tax rules, which affect the total price. Suppliers can now adjust prices in real-time to best cater to the users in certain locations.
Pricing Questions to Ask Yourself
- Have you identified what the perceived value is for your product/service in relation to the consumer? What does the customer consider to be valuable and worth their hard-earned money?
- Is your target market is price-sensitive? What effect will changes in price do in the market place? Should you increase your price or lower your price?
- What about coupons, sales, discounts, clearance price items?
- Are your prices competitive? Have you compared your pricing structure against your competition?
Place refers to where the consumer is able to access your products or service. It is about putting the right product in the right place? Traditionally, this includes newspapers or retail stores. With digital marketing, there are many more channels available to meet the user’s specific needs. This makes the placement of products challenging because there are more options for consumer experience. Online business has added more complexities to the ‘places’ in the marketing mix. Which distribution channel is most likely to convert into a lead or sale?
Places and Relationships
Platforms such as social media, online forms, emails, etc. have added relationship factors, changing how modern business is conducted. For example, the ability to:
- Respond instantly to users asking questions on Facebook
- Add insightful recommendations via Quora
- Respond to negative reviews on Yelp
Businesses can interact right were the user is being most influenced, harnessing the power of relationship-building based on where their clientele is active.
Places and Accessibility
The Internet and smartphones allow the consumer to have a 24/7 marketplace right in their hand, accessible at any time. It is critical that businesses not just to be online, but also be easily found online, by the right audience.
Examples of Online Places Include:
- Websites displaying interactive ads
- Search engines highlighting shopping ads
- Google search results
- Social channels such as Facebook, Instagram, or Pinterest
With so many digital avenues available to reach users, businesses can tailor the experience. This can be based on behavior, convenience, demographics, etc.
Making your products accessible to the users at a time and place that is most convenient to them will give you a competitive advantage. How certain are you that you are putting the right preoduct in the right place?
Place Questions to Ask Yourself
- Have you researched where your target market is searching for your product?
- Where are the consumers actively looking? In a brick and mortar store? Online? Direct sales?
- Do you have access to the medium or channel? Do you have expertise and knowledge of how these channels perform? Can you optimize the efficiency of these distribution channels?
- Where are your competitors most active? Were do they push their products? Are they utilizing a channel that you are not?
Integrated Marketing Approach is Best
Businesses need to ensure that they don’t put all their eggs in one basket. In other words, don’t just use one digital marketing channel to distribute your products. If that channel fails, then the whole campaign fails. Make sure to include a diverse number of channels to reach a larger audience and learn more about user interactions. It is best to create an integrated marketing approach.
For many businesses, a lot of time and effort is put into the promotion element of the digital marketing mix. However, this is only one-quarter of the picture. Promotion does not equal marketing. Businesses need to integrate their marketing approach and include all four basic elements. This is how your business can grow it’s market share.
Jim Blyth explains promotion as “the marketing communications used to make the offer known to potential customers and persuade them to investigate it further.” In short, it is the medium that is used to directly communicate/engage with the user. This includes Google My Business listings, sponsored ads, Instagram posts, email newsletters, and much more.
Technology and Communication
Thanks to modern technology, businesses have more channels than ever to communicate through. Business can segment their audiences according to a mobile device, browsers, operating systems, and more. This allows the business to tailor their message to a specific user and communicate how the product will satisfy their needs. In short, digital marketing channels are allowing for personalized marketing.
Which Channels to Use
When deciding on distribution channels businesses need to make sure that it is the correct fit. The communication platform needs to be appropriate to the product and consumer.
Major Online Distribution Channels:
- Search Engines
- Display Ads
- Banner Ads
- Interactive Ads
- Social Media (posts and Ads)
- Digital word-of-mouth
- Forums (e.g. Reddit)
- Influencers (e.g. bloggers)
- Business listing (e.g. Yelp)
Promotion Questions to Ask Yourself
- What potential channels are available to communicate your message or distribute your product?
- Where are your competitors promoting their products or services? Where are they active that you should also consider?
- Which is the most effective channel to communicate through? Which channel is most relevant to the product and consumer?
- How should you time your promotion? Businesses need to take into account 24/7 avenues (such as social media), as well as the seasonality of products and plan the timing of your promotions accordingly.
Marketing Mix Check List
- Start by identifying the product or service that you want to analyze. What is the Unique Selling Proposition (USP)?
- Research and understand your target audience. Who are your potential customers? What do they search for? Is your product relevant to their needs?
- Research and understand your competition. Is the market highly competitive or are you a pioneer? What can you learn from other businesses competing in this space?
- Assess the channels (space) where your customer engages with your product. Understand the pros and cons of each platform/place.
- Test your digital marketing mix. Ask customer-focused questions:
- Does the product meet the user’s need(s)? (Product.)
- Is the pricing right? Or does it need to change? (Price.)
- Where are the consumers? Are your marketing channels delivering as expected (Place.)
- Is your marketing message resonating with the target audience? Do they understand? Do they feel confident in making a purchase? (Promotion.)
- Review your marketing plans. Adjust each of the elements to cater to the user, market, and business needs. This will require constant updating and tweaking. Ask yourself “why” and “what if” questions too, to challenge your marketing strategy.
Does your business have a good grasp of its marketing mix? Do you have a plan to implement an integrated approach to your marketing plan? How have you grown your market share? Post your thoughts below in the comment section.