I’ve noticed over years of working with clients and conducting research that there is a widespread tendency to confuse marketing with just one of its components: promotion. I have a theory that this seemingly small bit of confusion is the key reason most marketing initiatives fall short. The other three parts of the classic “marketing mix” – product, pricing, and placement – simply don’t get the level of attention they deserve.
Create a product that actually provides significant value for a market, and promotion tends to take care of itself to a large extent. “Value” means that the product is not simply of high quality, but that it also resonates with a fundamental desire or need.
That second part is hard, no doubt about it, and there’s usually no way to get there without a lot of careful observation, ongoing conversations with your customers, and trial and error. That takes time – it took Apple a solid decade, for example, to come up with the iPad. But, of course, they got it right – and how!
Pricing is also tough – particularly in highly competitive markets. My view it that, like product, pricing comes back to value. If people really value what you have to offer they will – within reason, of course – pay whatever they have to for it. I take that not as a license to gouge, but as a fundamental reason to create a high value product in the first place.
And it is worth remembering that having some latitude with your pricing can be very valuable – even a 1% shift can make a significant difference in net revenue. (I mention this in a recent blog post on pricing as well as in Pricing Online Learning.)
Finally, I find that placement – or distribution – is often overlooked entirely. Most organizations simply stick with tried and true channels for getting their products and services to market. Think a little outside the box, though, and there can be big opportunities. In the world of online education, I’ve seen a number of organizations have great success with licensing their products to large corporate or government purchasers. In the world of events, think of how TED has leveraged Web video and also created a franchise model for local versions of its events.
Creating new distribution models, figuring out value-based pricing, creating products that are of fundamentally high value in the first place – all of these things require intensive thought and often more than a little “nose to the grindstone” type work. That’s a big reason, I think , why promotion often dominates the marketing efforts of organizations: it’s relatively easy to do, by comparison (even if it is not easy to get right), and it tends to be more fun.
But promotion without enough attention to the other three Ps is like the proverbial “lipstick on a pig” – when all is said in done, you still have a pig on your hands.