Applying the Marketing Mix: Product, Price, Place, and Promotion

Just like baking a cake, the marketing mix must include the right ingredients in the right proportions. The combination of ingredients is actually very important. There must be a synergy of ingredients in order to get the desired results. Rather than flour, sugar, and yeast to get flavors, entrepreneurs combine product, price, place, and promotion to get profits. This is the marketing mix. The marketing mix communicates to your customer who you are and what your competitive advantage is. Without a consistent marketing message you will confuse your customer with what you actually have to offer.

Product. The first ingredient in the mix is the product itself. What is your product? What need does it fulfill for your customer? The “product” means the entire product package that is presented to customers. This includes product packaging, branding, logo, reputation, and perhaps even company culture. Typically, products can be defined by their operation, durability, reliability, aesthetics, and serviceability. Services are a bit different yet still involve an exchange of something for money. Services are generally intangible but that does not mean that you should not try to define it in a clear manner that describes what your customers are getting and what your competitive advantage is. Typically, services can be defined by courtesy, communication, access, responsiveness and reliability. The entire “product package” is just as important for services as it is for products. For example, when a cleaning service arrives at a residence or business for their regular visit, what does it imply when they arrive in a rusty, unkempt vehicle that smokes and leaks oil? You have an inconsistency in the product/service and it is confusing to customers. Successful entrepreneurs think about consistency in the entire product/service package.

This “product package” includes branding. In other words, we should focus on a key benefit that our product offers our customer and hammer that point home. Do not try to be all things to all people. A classic example is Ford’s failure with the Edsel versus their success with the Mustang. The Edsel was a true composite of nearly every technology and design attribute available at the time. It was an attempt to appeal to a very broad market. It failed because it didn’t target a specific market need. The Mustang was an automobile focused on a specific target market, younger adults looking for a small yet powerful car. The Mustang has been branded in that market niche for over four decades…the Edsel…not so much. Way too often I hear the phrase, “everyone is my customer”. Seriously? Focus.

Being consistent in your product definition and branding means choosing a logo that complements your company. It also means choosing a company name that helps define your business and is easy to remember. You cannot pay enough attention to the way your product or service is perceived through branding, packaging, logos, etc. Don’t let these examples happen to you.

Price. Price says a lot about your company. Selling for less than your competitor may not improve your market share. It may create a perception of being worth less than your competition. Many of your customers will relate price directly to quality and this may or may not be the case. Setting a price as part of the marketing mix must start with understanding what your competition is doing. What is their strategy? How will they respond to your price? Additionally, while determining the price component of the marketing mix you must not only understand the economics of your decision but also the psychological impact your price will have on your customer. How sensitive is their buying decision to price? Sales, promotions, and any other discounts used to drive customer traffic should also be considered as part of the pricing strategy.

Place. Location, location, location…as long as the particular location is where you particular customers shop. While the internet has made it easy for entrepreneurs to market products right out of their homes, brick and mortar storefronts must be placed carefully. Again, product placement requires a bit of marketing research. Retail establishments must determine where their target customer is and where they shop. Wal-Mart set the standard in such strategies. Wal-Mart’s initial market was underserved communities, mostly rural or suburban areas. They placed new stores in those locations. Likewise, we must know where to place our product in the market. Additionally, online companies must know how to drive traffic to their website.

Promotion. Entrepreneurs have to get the message about their products and services out to their customers. They do this through publicity and advertising. This can take the form of mailers, newspaper ads, billboards, flyers or even TV commercials. Too often a “shotgun” approach to advertising is taken. This means a large blast of advertising to a large population. This is an utter waste of limited entrepreneur resources. Remember…everyone is NOT your customer. The effective way to advertise is to determine exactly who your target market is, where it is, and how to reach them. There is a reason Lamborghinis, at about $300,000/car, are not advertised on billboards or in local newspapers. Lamborghini customers don’t shop that way. Likewise, McDonald’s probably doesn’t place help-wanted ads for burger flippers in Millionaire Magazine.

The marketing mix must be consistent. Entrepreneurs always have to start with a solid understanding of their product/service and what competitive advantage it offers to a specific target market. There is a huge marketing difference between marketing to Gen E versus Baby Boomers. They live in different places. They shop differently. They read different material. They communicate differently. They use technology differently. Having the right marketing mix of product, place, price, and promotion can literally save your business.