For outsiders, business success is born out of luck and perfect timing. While there is truth to that, you can’t discount the number of effort people exert to come up with data-backed strategies. Once you dive into the business world deep enough, you will be welcomed with jargon you never knew existed.
You will recognize how business moves are actually calculated. Strategies are born out of years of empirical data represented by numbers and plotted on graphs. They do not happen like magic.
The Importance of Marketing
In every aspect of business, there is a whole industry. These industries are all critical, but if you are a beginner, one of the industries you should look into is marketing. You can say that marketing is the soul of any business. Without knowledge of it, why are you even in the field?
If you are an aspiring entrepreneur, it’s best to get down with the basics first. Understand the foundation of marketing, and you will soon know your way around the business world. Under marketing, there are so many other components that exist. But to make it easier for you, start with the 5 Ps of the marketing mix.
Marketing mix
The use of the term “marketing mix” began around the late 40s to the early 50s. Harvard professor Neil H. Borden was the first one to coin the phrase. He referred to the concept that way based on a colleague’s observation that you pretty much mix ingredients in business, so a business executive is practically a “mixer of ingredients.” That colleague is Harvard professor James Culliton. The observation is on point.
There are 12 ingredients (components) in the marketing mix. They are:
- Packaging
- Pricing
- Distribution channels
- Display
- Product Planning
- Personal selling
- Promotions
- Advertising
- Branding
- Physical handling
- Servicing
- Fact-finding
Just like any other recipe, what may taste good for others might be bland to you. The concept means to make people in the business understand that the mix is flexible. If your business doesn’t need any of the 12 elements, take it out of the formula.
The 5 Ps: the basics of marketing
Based on the concept of the marketing mix, Notre Dame professor Jerome McCarthy condensed the mix into four ingredients. McCarthy called them the 4 Ps of marketing: product, price, place, and promotion. The last component, people, was added as a critical component later on.
Basically, the elements you have in your marketing mix are what you control, modify, and manipulate to influence the number of sales or encourage repeat orders among customers. Think of the whole thing like they are in the concept chart. Here’s a quick rundown on all 5 Ps:
1. Product
Ask yourself what needs to be improved with your product or service. The following are what you can manipulate or change.
One is functionality. Does your product have a function that customers can’t have with other brands?
Next is the packaging. Should you go for non-expensive packaging to save on costs? Should you invest in expensive packaging that will boost your brand? Or maybe you need to go the eco-friendly route.
Then consider the appearance of the product itself. Is it something that people will gush about when they open the packaging? Would they appreciate it or raise an eyebrow?
2. Price
The next P is the price. Many considerations come into play when pricing a product, including the following:
- You can check how much your competitors are charging.
- You have to consider if the value of your product is aptly reflected in its price.
- You also have to think ahead: consider the promotions, discounts, and shipping fees.
When pricing, you have to go beyond what’s evident in a physical product. For example, you are selling security cameras. You are not exactly telling people to buy a piece. Instead, you are telling them to invest in personal security and safety. When you are selling something important to people, they are willing to spend.
3. Place
The place is not limited to a physical store. Will you open an online shop? Will you ship overseas? Are you open to distributorship? Basically, this P is all about making your products as accessible to the market as possible.
4. Promotion
Next in line is promotion. Everybody knows a thing or two about promotions. The question here is, what is the most effective way to make your target customers aware that your products exist?
5. People
Finally, the last P refers to the people with you in the company. Did you hire the right people? Those working behind the scene are just as important as employees who work directly with customers like sales reps and customer service reps.
Getting just the right mix of all these elements is a recipe for a solid marketing plan. As you go along, you can add more ingredients to see better results. Knowing the basics is already solving half the problem.