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How an Effective Marketing Mix can Increase Profits 
(Part 3, Place & Promotion)

In this third segment of the four P’s of marketing, we will cover place and promotion. These two segments are intertwined and should be covered in one blog post.

The place is where your sales are located, also known as the channels of distribution.  Promotion includes selling, advertising, sales promotion, and public relations.

During these chaotic times, businesses are exploring new channels to sell their products and services. Governors are reimposing the stricter guidelines that were in effect a few months ago. This pandemic will be with us for several more months and businesses will have to adapt and overcome these conditions.

Depending on your type of business you may need different tactics to distribute and promote your product or services. If you are a B2B (business to business) supplier your strategy will require a different approach than B2C (business to consumer) sellers.

B2B distribution in most cases is not done from a retail location. The driving force has been personal selling which is becoming more difficult. Customers and prospects are not receptive to cold calls in this climate. A customer service center with knowledgeable personnel who can sell will be more effective. You should have a website that customers can go to review your product-line, and established customers can place reorders. The most effective way to have potential buyers go to your website is by email promotions. If you don’t have email addresses you can purchase lists online at a low cost. Unlike B2C you have a finite universe to sell to that can be managed with direct marketing. Trade associations that your customers may be members of are a great place to start. You can advertise in their publications or be a guest speaker at one of their events.

B2C sellers whom many have brick-and-mortar locations may have to reevaluate how they will conduct business to survive. Retailers should consider using social media to promote their wares. There is a void forming in the marketplace, the big chains are closing stores and some like Lord & Taylor are going out of business. https://moneywise.com/a/chains-closing-the-most-stores-in-2020

Aggressive retailers can use this as an opportunity to fill this vacuum. Marlton True Value is an example of a local retailer who is flourishing. They have a knowledgeable staff who are there to answer questions. The pricing is competitive, a complete selection of products, a convenient location in a strip center, and curbside pickup. This is an example of why shoppers don’t go to big box stores.

In closing, we are all creatures of habit, and some businesses are thriving, because they have revised their business model. These changes may include pickup and delivery options that make life more convenient.

How an Effective Marketing Mix can Increase Profits
(Part 2, Pricing)

In my last blog post, we covered the 4 Ps of marketing also known as the marketing mix, and how these four basic concepts can be used as a foundation for your marketing program. Also, that blog post was an explanation of the first P which is the Product. In this post, we will cover the importance of Pricing your goods and services.

Price is what your customer is willing to pay for the product. Many businesses work on a cost-plus mark-up to determine their selling price. This is very common in retailing, adjusting the price to meet competition or discounting, and increasing sales volume while creating an image of lower prices.

Companies that offer services with a product have more latitude in adjusting their pricing by offering superior performance. An example of this happened to me recently when I contacted painters for my home renovation. The individual that I hired had the highest price quote, but he sold me on the quality of the paint and went into detail explaining what he was going to do. He described the preparation of the surface, the types of paint used, and the results I could expect.

There is a psychology in pricing which is used to create an impression of a lower price by ending with 99 cents. A price of $5.99 appears cheaper than a selling price of $6.00. Upscale restaurants use a whole number such as $29 with no zeros to convey the image of an affordable price.

In my former career in manufacturing, we were able to increase profit margins by streamlining our product line. This increased the turnover of parts and raw materials leading to a higher turnover of inventory. Another contributing ingredient was that we increased our purchase quantities of the faster moving materials which increased our discounts from suppliers. The selling prices were never lowered and the net result was a very high gross margin of profit.

If you have any questions, please contact me at nick@kbizbrokers.com

The term marketing seems to have a different meaning for different business people. These days most of the marketing we hear about is social media and others think of it as a way of pushing a product onto a consumer. True marketing is an amalgamation of several social

sciences which include economics, psychology, sociology, political science, human geography, and demography. The fusion of all these disciplines has created a method for entrepreneurs to satisfy their customers’ needs and wants while increasing their profits.

As I’ve stated many times in previous blog posts we are currently in a difficult time for businesses to stay afloat. As we enter the fall season it is predicted that the COVID-19 virus will spike and we should expect government regulations to tighten. Now is the time to predetermine your strategy in anticipation and have a plan to implement.

The Marketing Mix also referred to as 4Ps of Marketing is the model that is used as building blocks for a companies strategy. The four components are Product, Place, Price, and Promotion. In this posting, we will cover the Product and in future posts Place, Price and Promotion will be discussed.

Product
The term product in marketing represents a physical object, service, or item bundled with a service. The products that you are supplying to your target market fit their needs. Facts to consider are demographics that include gender, age, race, marital status, and discretionary income.

The best way to know what your customers want is to do some marketing research. You can start with secondary research available online from government websites sba.gov fedstats.gov and factfinder2.census.gov. Trade groups maintain statistics about trends in marketing.

If you want to refine the data from secondary sources you can conduct your primary research. The best way to start is to form a focus group of 6 to 12 customers that represent your target market and ask them open-ended questions. From this data you can develop a survey questionnaire that can be used online by going to SurveyMonkey.com or SurveyGizmo.com, both offer free options.

In closing, there is the 80/20 rule in product marketing and that is 80% of your sales come from 20% of your product line. For decades the mantra in manufacturing has been product line extension. When a company has a successful product they expand their line by introducing additional commodity variations of flavors, sizes, colors, budget, and luxury models. Now is the time for small businesses to cut back your selection to the fastest moving items.

If you have any questions, please contact me at nick@kbizbrokers.com

Old School Marketing Techniques

During a meeting recently I discussed with a business owner about possible ways of marketing his company. I sensed from our conversation that he was not fond of computers or the internet. Therefore, I did not suggest any digital marketing media such as websites, blogs, or social media. My suggestions were to use time-tested old school techniques that were effective before the internet and are still viable.  

Community Involvement….create a public persona

Get involved with the community by joining the Chamber of Commerce or Rotary. These organizations will help you get connected with the local community. You can participate in charity fundraising events, donate your time and services, or do public speaking engagements that demonstrate your expertise in your field.

Mail/eMail Marketing….promotional media

Mail/email marketing is a strategy to connect with customers and prospects. You can use mail/email to send out routine information like reminders, but you can also use mail/email to send out marketing materials such as newsletters 

Newsletters….drive sales

Newsletters are a means of keeping your customers informed. Your weekly newsletter may include news articles, current trends in your industry, to special offers with limited time. People tend to be influenced into making purchases when there is a deadline. Giving out tips is a technique of reassuring customers that you care about their well-being, even when they don’t currently patronize your business. Weekly newsletters create familiarity with your company and, build trust. The newsletter can be the helm that steers your customer to your company’s website and social media sites. 

Attending Fairs….meet and greet

Attending community, and small business fairs will create public awareness of your business. This gives potential new customers a chance to sample your products and services. It could be something as simple as a product sample or service demonstration.