The Confusing Marketing Mix
Marketing is one of the top three struggles small and medium sized businesses face. The struggle of how to find customers, how to build brand awareness, how much to spend on marketing, how to select the right marketing channels…. The list goes on. It doesn’t need to be a struggle with the right instruction and guidance of how to use the Marketing Mix.
Many business owners undertake some form of marketing training, though it might be a short course in one area of marketing, such as social media. Marketing is a much, much bigger field. It is no wonder that soon small and medium enterprises (SME’s) are struggling.
Marketers confuse SME’s even more with jargon like:
- 4Ps of Marketing Mix
- 5Ps of Marketing Mix
- 7Ps of Marketing Mix
- 8Ps of Marketing Mix
- 44Ps of Marketing Mix
Are you a business owner thinking? “Take your P’s and P— off!”
If you are finding yourself in that position, keep reading.
As a marketer, I feel your pain (no P pun intended). The marketing jargon and theory can become overwhelming. That is why I have written a guide to the marketing mix P’s to help all business owners, whatever your industry.
Before we get to the guide, I need to be clear. In marketing, there is no single magic formula (though many tell you there is). There are many variable factors that ultimately create sales and drive profit. To start:
- You need quality products and services,
- That meet (or exceed) your customer’s needs,
- At a value-based, market driven price.
- You need to understand your customers,
- Speak their language and
- You need to target those customers where they hang out.
Even then, the customer needs to be in the right mindset. Personal issues, a sick toddler, job worries will all impact the customer’s buying journey.
What I have outlined, in the bullet points above, is basically the 4P’s of Marketing Mix: Product, Price, Place, Promotion. There is a bit more to getting sales and retaining customers. However, if you define the 4P’s of marketing for your business, you will have built a marketing strategy to driving growth and profitable sales.
A bit of background: The 4P's of marketing Mix
The 4P’s of Marketing Mix was the original theory. It has been around since the 60’s and suggested by Jerome McCarthy*. The 4P’s are:
McCarthy suggested that these are the most common variables that can be used to ultimately build your marketing strategy and plan.
These 4P’s are intrinsically linked and together they form a large part of any business and marketing strategy. In a large business, marketing, along with other key factors of a business (e.g. leadership, direction, planning, personnel, operations etc) can become siloed in departments. However, most small businesses are a one- or two-person business where there are no siloed departments.
Therefore, the 4P’s only cover some areas of the small business’ overall strategy and may not provide the level of understanding small business owners need in building their business and marketing strategy.
That is where the 8P’s of marketing mix can help. You probably do much of the 8P’s now and are unaware of it. The 8P’s begin to dissect the 4P’s in more detail and stretch across other facets of your business to provide a more encompassing business strategy, plus a marketing strategy. These are the 8P’s:
- Physical Evidence
I have written a basic guide to help you through the 8P’s. Use it when reviewing your business and marketing strategy.
*Jerome McCarthy Basic Marketing: A Managerial Approach, 1964
- Save a copy of this article or download a copy.
- Set aside a minimum of two-three hours to review your business and marketing strategy using this guide as your aid. Your business and marketing strategy is an investment in your business. This is time well invested.
- You choose, whether to use all the 8P’s, whether you only want to use 4P’s (or any other number of P’s). However, I would suggest you follow the structure of at least the 4P’s of Marketing Mix. With this, you will be well on your way to constant sales, a loyal customer base and profitable growth.
As a side, using 5P’s 7P’s, or 8P’s goes against the marketing theory (and goes against all my marketing learnings) but I believe theory is useless if you can’t apply it to both your business and marketing strategy. The marketing mix P’s need to work for you and your business.
One more point: In a small and medium business you will want to review your P’s on at least an annual basis. If you are a larger business review every six to twelve months.
The Definitive GUide to the 8Ps marketing MIX for SME's
1. Product in the Marketing Mix
Product: is what you are selling. It could be a tangible, physical product or a service that is not tangible. A product/service needs to meet the demands of the customer you are selling to. It should have a clearly defined purpose and features. According to Philip Kotler[i] (the father of marketing) there are five levels of product development:
- Core benefit: the customer’s basic need or want. (Does your product meet the customer’s need?)
- Generic benefit: the basic features of the product/service for it to function. (What are these basic features in your product? Can these be improved or refined?)
- Expected Product: additional features the customer might expect. (What else could you offer to exceed customer’s needs or to delight the customer?)
- Augmented Product: tailoring of the product to enable differentiation. (What makes your product different to your competition? Why would a customer buy your product over the competition?)
- Potential product: future product improvements. (Are there future developments or changes you can make to your product in the short or long term?)
Many small or medium sized businesses do not have the time to think about these 5 levels of a product, which can lead to product failure.
It is important to remember the product:
- Should be the solution to the problem that the customer has.
- Should meet or exceed the customer needs/expectations.
If your product is failing to do so, it may be a good idea to take the time to reconsider your products.
- Think about what you are selling and why. Who is your target audience?
- Think about how your business considers product development. How do you know if your products meet the needs of your customers? What do you currently do to track this?
- Review your product or service against the five (5) levels of product development and the questions, listed above. Undertake customer and competitor research if required, some online polls or surveys can help.
- After doing this ask yourself a) is the product the solution to the customer problem and b) does it meet or exceed the customer needs and expectations? Be honest! Your business needs raw honesty when reviewing your marketing mix.
[i] Philip Kotler, Kevin Keller Marketing Management (15th Edition), 2015 https://www.pkotler.org/
2. Price in the Marketing Mix
Setting the price of your products/services is not always easy to do.
You need to consider a range of factors including all your business expenses (and add a profit margin) before calculating a per unit cost. Sounds easy but how many small businesses do this?
The price of your product has a direct impact on your customer’s perception of your brand. Products too cheap can appear like a scam or poor quality. Too expensive will be out of reach of your target customer. Is your product of high quality? Is this enough to meet customer expectations? Not sure? Ask your customers.
The price where your product is positioned in the market is always reflected against your competition. It is easy to quickly do online research on products and to compare against the market.
Importantly, the price you set should reflect your customer’s perceived value of your product and should correlate with your budget.
Set your price either too high or too low you will very quickly see your business struggling.
- Have you considered all your costs? When was the last time you reviewed your pricing?
- Consider all your costs – make a list (it could be very long). From electricity to maintenance, daily stationery consumables to legal costs. Add a labour cost to your service and your marketing including networking and travel time e.g. if you are a Physiotherapist and every six months you have a lunch meet and greet with local doctors you need to account for the luncheon, your time, marketing material etc. into your overall costs.
- Consider your costs to your competitors. If you offer a superior product, price accordingly. Make sure it meets and exceeds the customer expectation. If you need help on Pricing, Jane Tweedy Consulting can help. Jane is passionate about pricing for small business.
3. Place in the Marketing Mix
Place – is the base where you sell your product or service. This could be a retail presence in a shopping district, an industrial warehouse distribution centre, a commercial office unit, working virtually from your place of residence (or the growing trend to work nomadically from a campervan).
It is important to determine the ideal place to sell your products because you need to be able to meet your customer’s needs and requirements. The customer needs to be able to find you and reach you without it being an inconvenience for them. The same can be said for hiring good staff.
Where you locate your premises is more than a marketing requirement. It is crucial to your business operations and logistics.
Some factors to consider:
- The type of location where you want your business to be i.e. warehouse, shop front etc.
- Future expansion consideration – moving is costly, as can be empty space.
- Whether the location fits your brand
- Customer requirements e.g., convenience to retailers, transport links etc
- Budget and contractual agreements – consider floor space and fit out expenses, length of term.
- Staff, suppliers etc
- Logistics – e.g. parking, accessibility, transport access, IT/NBN network accessibility.
- Virtual vs non-virtual shopfront.
As business owners, there are times, we all have varying thoughts about our current location e.g. it is not convenient, it is not big enough, it is in a dodgy location, etc. I am aware of a local business owner that starts his backup procedure at midday to finish before midnight because network quality in the area is poor. It is imperative to consider a range of factors in choosing location.
- When reviewing your location think about some lessons you have learnt from choosing your existing location. Write a list.
- What are the crucial criteria – must haves vs nice to have?
- Talk to Commercial agents, your network and other business owners about their experiences and learnings to add to your list.
- Importantly, consider your customers and staff. Ask them for their thoughts.
4. Promotion in the Marketing Mix
Promotion refers to the specific marketing tactics or the marketing channels you use to let your customers (and potential customers) know about your products. There are over 100 different types of marketing channels encompassing traditional advertising (e.g. newspapers, TV, face to face marketing) through to digital and social media channels.
- Could you list over 100 different forms of marketing channels?
- Which marketing channels are the right ones to use to meet your marketing objectives – for your brand, for your target customers, your target geographic location?
- Consider the cost effectiveness of each channel against your marketing budget, and anticipated return on investment (ROI).
- Understand how to track and measure each channel your business uses to determine the effectiveness of each channel.
- Mix up your marketing. Using the same offer, message, channel etc can become boring to your customers. Just because campaign ‘A’ met your success criteria does not mean this will happen again and again. (And you should have success criteria for every marketing campaign, otherwise you are wasting precious time and budget).
Every channel will produce different results and can vary significantly depending on the offer, the key message, collateral, copy, day/time, and the current mindset of the customer. Need help with selecting what channels to use? “The Look” package. We will cater a plan to suit your customer requirements
5. Physical evidence in the marketing mix
Physical Evidence is everything your customers see/hear/touch/taste/feel when interacting with your business. It includes:
- The packaging and branding.
- The layout of the physical location, it is fixtures and fittings, the environment and ambience.
- Your staff, their uniforms, their behaviour, etc.
Your physical evidence can provide a strong point of differentiation and set you apart from your competitors, especially in a physical location such as a restaurant or office because these locations are so visible.
Physical Evidence Action:
- Think of some examples of physical evidence e.g. how two local cafes set themselves apart. This helps highlights the differences. What does Café A do well, compared to Café B?
- Research your own market – overseas and local competitors. What do they do well, or not – you do not want to copy. Look Deeper Marketing’s “The Deep” package can do a competitor analysis
- Look at ways to be innovative and visionary in your approach. Many marketing consultants, brand specialists or business advisors can help.
- Always be clear and specific when briefing your agency. If you are not sure how to write a marketing or brand brief, ask your agency for their template or look online for resources.
6. People in the marketing mix
People is a key factor of any business. Employing and retaining the right people is imperative in both the long- and short-term success of your business. The right people will help you design, build, sell and manage your product. People will take your business to new levels that would not be achievable on your own.
Some key factors to consider with the people in your business:
- Skill set and personality mix.
- Enabling staff to understand their role, place, and impact in the business,
- Ongoing training and upskilling,
- Ways to ensure staff feel appreciated, respected, and safe.
- External outsourcing of tasks and having back-up staffing plans.
People are an asset to your business – whether you employ or outsource. The wrong people can be detrimental for your business. The right people will enable your business and brand to grow.
- Think about the skillsets you may lack and what skills you need in both the short and medium term. As your business grows start thinking what skill sets are required for the long term. A business advisor or HR professional should be able to offer guidance here.
- Before you are ready to expand your business, what tasks e.g. admin, marketing, bookkeeping, operations could be outsourced to free up your time and enable you to focus on what you do best.
- If you need further help finding the right people collaborations and opportunities, chat with Business Advisor, Debbie Roberts Consulting.
7. Process in the marketing mix
Process is the how your business goes about achieving a desired outcome. It is the actionable steps. Every business has processes. How you process your tax, your admin, your billing, your quoting, your sales funnel.
The aim of putting processes in place is to minimise costs, streamline and reduce mundane tasks, save time, remain current and to optimise value for your customer and the business. You probably have processes in place in your personal life too. Do you have processes that make your work life easier?
- Think about what you want to achieve with creating or improving a process. Consider processes with customers, staff and external suppliers.
- Analyse current processes and break these down into steps.
- Research related processes. What are the key priorities for your business? Can you adapt or use an existing process or application, such as automated software for your business?
- Avoid locking into any contracts early. Trial the processes or software first. Test it and be ready to adjust to suit your business requirements.
8. Performance in the marketing mix
Understanding performance (across all aspects of your business) is essential in your business and marketing strategy to gain new insights and growth.
- Consider how your business measures its performance.
- Set objectives and then put in place tracking and measuring tools. Allocate the time needed to do this, ultimately you will want to determine the Return on Investment (ROI).
- Is the marketing or the activity producing a profitable return? Many small businesses do not look at the individual activity and may only look at overall quarterly or annual profits. Focusing on the individual activity ensures greater budget efficiency and financial control.
- Try testing and learning, especially before investing a larger budget.
- Ensure you are reviewing staff and product productivity regularly. Adapt, change or outsource key jobs and tasks as needed.
Understanding performance enables you to learn from past efforts, where to allocate resource, budget and to improve product lines. Performance is typically data driven – whether that be hard numbers or through qualitative and quantitative research and feedback. Measuring performance is essential for moving forward and driving business growth.
About Leanne Di Fazio
Leanne has over 20 years marketing experience in large corporates and small business in Australia and the United Kingdom. She is passionate about helping small business grow and thrive. Leanne is the founder of Look Deeper Marketing: who specialise in marketing, strategy and planning for small business. Look Deeper Marketing bring affordable marketing consultancy to small business in Sydney and surrounding areas, with packaged options so you know exactly what to expect. Leanne offers affordable packages for helping your business with Marketing Strategy, The 8Ps of Marketing Mix, Competitor Analysis. Look Deeper Marketing taking a deeper look at your marketing.