The most expensive marketing is marketing that doesn’t work.
– Nick Nelson –
Could Your Profit Improve Thanks To Your Marketing Ps?
One thing I always notice with concern is that when most small and medium business owners – and some larger ones for that matter – think about “marketing”, they are really thinking about “advertising” or “promotion”. The other “Marketing Ps” are missing or not considered equally.
Why should I be concerned? Well, I’ve been a marketing practitioner throughout my career, as some of you have. But not all business owners have such a background, even though many are very good at running their businesses and making good profits. The concern is that their profits could easily be better.
I suppose it’s not surprising. We are all exposed to massive amounts of different types of advertising and promotion every single day of our lives (unless we live in a cave). It is at the forefront of our minds.
As all of us know, though, there are actually four “Ps” of marketing, only one of which is Promotion. The others – Price, Product and Place – are each of equal importance in the marketing mix relative to Promotion.
Yet time and effort spent in business managing the other “Ps” is almost always disproportionately less.
In fairness, most businesses do focus on Price as a marketing tool. Pricing decisions can have a dramatic impact in a short period of time, depending on the type of business, and most businesses understand the price elasticity of their different products and customers.
In many cases Pricing and Promotion are linked together in advertising campaigns and sales promotions. But Pricing management as part of an integrated strategic marketing plan ? – perhaps less so.
My contention, based on experience, is that pro-active management of the Product and Place components of the marketing mix is neglected more often than not in small and medium businesses.
In order to improve the pro-active management of the Product and Place components of the marketing mix, I use something which I call “Customer and Product Portfolio Management”. Allow me to explain further.
The Customer and Product Portfolio Approach
Product Management, in a similar way to marketing management, is not just about new product development and product life cycles. It is also about ongoing management of the Product Portfolio. In other words, developing a “picture” of the portfolio of products the business has currently and how they are performing. Products in this sense include not only physical products, but services, options, add-ons, warranties and guarantees.
The Customer Portfolio includes all of the Place components, or Channels of Distribution, such as the different ways of going to market, on-line versus bricks-and-mortar, and, of course, different Customer groups and segments. It is a “picture” of the portfolio of customers the business has currently and how they are performing.
Having a clear picture of the Customer and Product Portfolio usually entails the use of a host of analysis methods and tools. We won’t go into that sort of detail here. Again from experience, very few businesses have this clear picture at their fingertips. So why bother ?
Because, in the short term, a clear Portfolio picture will lead to far easier identification of opportunities for improved gross profit, pricing strategy, and stock reduction just to name a few. And for the long term it will provide a launching pad for strategic opportunities with a better understanding of the options and better choices. Also, quite possibly, better targeting of promotional activity and expenditures.
All this from better minding your “Ps” !
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