The 6 "p"s of marketing - open for debate

OK - here's a topic that's surely up for debate: I believe there are 6 "p"s of marketing.

Those of us that studied marketing in university/college some ____ years ago learned the 4 "p"s of marketing: Product | Pricing | Promotions | Place.

The dominance of the internet in the marketing mix has expanded that list to 6, in my opinion. There are articles that talk about 4, 5, 6, 7 and even 8 "p"s, and the words that start with "p" aren't always the same. I've seen 'People' and 'Process' included in many lists, but I don't believe they contribute to the act of creating demand (the definition of marketing) as much as the other categories (open to debate!). I've also seen 'Physical Evidence', described (by valuebasedmanagement.net) as 'the ability and environment in which the service is delivered, both tangible goods that help to communicate and perform the service and intangible experience of existing customers and the ability of the business to relay that customer satisfaction to potential customers.' ... HUH?!?!?

Here's my list:

1. Product (How do you shape your offering to match consumer needs and build demand?)
2. Pricing (How does your pricing strategy support your positioning and generate demand?)
3. Place (Where do you need to be to reach your audience?)
4. Promotions (How do you tell people what you have to offer?)
5. (new) Positioning (What is your reputation? How do people describe your company? Why would anyone buy from you?)
6. (new) Conversations (Are you participating in the conversations that are taking place about you and your industry?)

OK, that last one doesn't start with "p", but I couldn't find an applicable and adequately descriptive word that did. The best I could come up with is "People Talking". Yep, I thought it was lame too. We've got 5 "p"s and a "c". Deal with it.

Social media, in case you were curious, fits clearly into the Conversations category. In fact, it was the catalyst in creating the category. Social media participation is just as important to the marketing mix as promotions or anything else. Deal with it. Embrace it.

LESSON FOR SMALL BUSINESS MARKETERS

As you create a marketing plan for your business, or as you make decisions to help build interest and demand, be sure to consider all 6 marketing categories. Promotions alone, which many businesses confuse for marketing, is insufficient for driving significant demand. You need to be creative and intentional in all 6 categories to be giving marketing the attention it deserves.

It also means you're that much more likely to build demand for your products and services, and what is there that's more important than that?

YOUR TURN

How is your list different, if at all?

Direct mail can work... except when it looks like this!

Direct mail is making a comeback.

When you hear of the term "junk mail" today, you're probably thinking about the junk you get in your email inbox. Believe it or not, junk mail used to actually refer to... wait for it... MAIL!

The ease and affordability of email made it the golden child of marketing, but also made consumers an easier target for junk email. But as consumers become more spam-filter-savvy and as corporations block more and more unidentified inbound email, marketers (at least the progressive ones) are returning to direct mail, and getting much better at it.

There is still less promotional mail than in its heyday, but some direct mail packages are personalized, sophisticated, impressive and in many cases compelling (inspiring the marketer's desired response).

However, as much as I applaud marketers for their clever return to direct mail, I cringe when I see stuff like this (click on the image) in my mailbox.

This company really tried hard. They went door-to-door (no postage) and tried to deliver a compelling message. I still don't know what that message is, because there is NO CHANCE I am going to read this.

Neither are you.

TAKEAWAY FOR YOU:

Please, if you're considering a return to promotional mail, remember:

1. Keep it simple (which means SHORT)
2. Make it pleasing to the eye (my eye needs to be drawn to it, but not overwhelmed)
3. Include an offer that is really hard to turn down or ignore. No more "10% off online orders" or "save the tax". It may seem like a lot to offer, but it's truly not enough. Give away something valuable for free (no free fridge magnets!) or consider the deepest possible discount without having to declare bankruptcy.
4. Think about the last item YOU got in the mail that inspired you to act in some way. What made it so effective? Can you use that tactic in your program?
5. Make it easy for them to act. A simple phone number or url (acme.com/mailoffer for example)
6. Once is never enough. Send multiple mailings. Remember that people need to hear something 6 or 7 times before they actually HEAR it. Oh, and never send another mail offer to someone that's already responded! Pay attention to the details.
7. Ask for feedback. Ask friends, colleagues, family members if they would be compelled. Don't try too hard to measure the results - direct mail often just build brand awareness. But you can get opinions about your program and work on improving the next one.
   

Burger King ad - do you like it?

In this ad, Burger King comes right out and admits they stole their new idea from an existing McDonald's product.



I like the honesty and creativity. I like the bravery. I like the fact that their sticking an idea out there and saying "deal with it". I like that they're trying to stick out from the crowd.

There are lots of reasons it's a terrible ideas as well (imagine you're BK's ad agency, and you decide to pitch an idea where you admit on TV that you stole an idea from McD's - oh, to be a fly on the wall), but I'm on the "like it" side.

You?


TAKEAWAY FOR YOU:

• In heavily competitive markets (anyone know one that isn't?), you have to give someone a reason to buy from you as opposed to your competition. BK took a stab at that by offering theirs for $1.
• Copycat product marketing is essentially admitting that you are lesser in some way than your competition. Just be aware of that and address the issue accordingly.

Rip-off of the century!

This example of price gouging was so offensive, I thought it must have been a mistake!

Shame on you, Suncoast Energy.

Suncoast Energy operates a gas station close to the Orlando airport. I stopped in there yesterday to fill up the rental car before returning it, only to notice that the price was $3.99 per gallon!

No, that's not a typo, that was $3.99 per gallon! (Canadians: imagine gas at $1.90 per litre)

I thought for sure that they must have set the price wrong on the pump. I even went in to the store to confront the cashier (not that I was expecting her to do anything about it). She said the price was right. I reminded her that gas is, on average, about $1.99 per gallon right now. She said... are you ready for it... "We charge that much because we're the closest gas station to the airport".

WHAT!!!!????

I was immediately offended. How could they assume I would be so stupid as to pay more than double for a commodity product (87 Octane gas is basically the same no matter where you buy it)?

They are obviously deliberately price gouging. They assume people filling up on their way to the airport won't notice the price until they finish filling up and realize they paid double what they usually pay. By then it's too late - they have to pay. They are also assuming people aren't willing or able to go anywhere else (there was another gas station ONE BLOCK away - $1.92 per gallon). Get this: they don't even have a sign by the side of the road (like EVERY other gas station in the world does) because they're worried people might notice before they pull in to the station. Wait - there's more! You have to pre-pay!

I understand the concept of premium pricing as much as anyone... but not for a commodity product! If you have a clearly superior product (think Ferrari, Rolex), then premium pricing is expected. For commodity products (think paper, fast food), there can be minor fluctuations in pricing (usually related to location or packaging), but not double! The gas station near our cottage is the only station for at least 25 kms, so we're forced to pay about 10% more. We don't like it, we complain about it, and we try to fill up elsewhere because we know gas is gas is gas. I can't even imagine paying 108% more. The gas station would go out of business. I certainly hope that fate comes to Suncoast Energy.

They're clearly trying to capitalize on consumers' need for convenience, but to an offensive level. They're manipulative. And in this economy, their audacity sickens me.


Have your say: I dare you to think of a worse example.

Ford in a price war against itself!

OK, this is a new low for advertising.

I see way too many examples of internal inefficiencies getting in the way of effective marketing, but this one takes the cake.

We all know that car dealerships, even within the same manufacturer, work independently. We understand that this inefficiency exists, but that doesn't make it excusable.

Today on the radio I heard a spot for the World Ford dealership in Miami. This is what they said:

"Bring us a lower quote from any other Ford and we'll beat it!"

From any other Ford?!?! They're in a price war... against themselves! Now, I know WHY they're doing this (because each dealer is independent and trying to hit their numbers), but it's an internal, structural inefficiency that has created a monster.

Imagine for a moment...

"Bring us a lower quote for a BigMac and we'll sell you this BigMac for less."

It just doesn't make any sense. As a consumer, I shouldn't be subjected to your internal problems. A Ford is a Ford. If I go to one Ford store, a Taurus should be the same price as it is at another Ford store.

Don't let your internal inadequacies spill into the consumer's experience.

The travel industry is anti-competitive!

We all know what they're doing, but somehow we decide to just put up with it!

I'm talking about the seemingly random, certainly unjustifiable fees that car rental agencies, airlines, and hotels add to the price of their products.

Case in point: I rented a car for our upcoming March Break trip to Florida. The "quote" was $300, but by the time I got to the online checkout, the total was $425. A SMALL part of that extra $125 was tax. The rest was a ridiculous collection of fees that allow them to get the price they really want.

"Airport concession fee": $30 - WHAT?!
"Energy recovery fee": $7 - WHAT?!
"Fees": $47 - ARE YOU KIDDING?!

The last one bothers me the most. There's no explanation!!! Just "Fees". As best as I can tell, that's their way of getting the price they really wanted, instead of the price they advertise.

It's just wrong.

Imagine going to a clothing store, picking out a pair of $50 jeans, then taking them to the cashier who proceeds to tell you the cost is $70 plus tax. "Where did the other $20 come from?" you would most certainly ask. Then imagine that the cashier has no explanation! You'd leave them on the counter and go to another store!

My initial thought was that this was the company's way of staying competitive in a commodity industry (a car is a car, essentially, when you're renting). They needed to offer an initial price of $300 to make me consider that rental as an option. At first I thought the move was uber-competitive. In fact, it's ANTI-COMPETITIVE since they're all doing it! I can't leave the rental 'on the counter' and go somewhere else because they're all doing it.

That's collusion.

That's anti-competitive.

That's wrong.

Any lobbyists out there with the time to take this all the way?!

C'mon DQ, don't be THAT cheap!

Here's a picture of an ice cream sandwich I bought from DQ recently. Perhaps this is just an anomaly, or perhaps they decided to cut corners a bit by decreasing the amount of ice cream in the sandwich. Either way, it illustrates the potential damage of cutting corners in your product manufacturing.

In this case, I am expecting an abundance of ice cream. Why else would I pay so much for a sandwich full of calories?! This allotment of ice cream is inadequate. If your product does not match your customer's expectation of it, you fail! The damage to your brand far exceeds any cost savings you've squeezed out.

In DQ's case, they may have been able to add $0.02 to the bottom line by cutting ice cream costs, but they lost a customer and all the profits I might have contributed to the bottom line, which would have far exceeded $0.02. Who knows, as a result of this blog post, they may have even lost more customers!

Don't cut corners. It damages your brand irreparably and costs you more in the end.

Have your say: Other examples of products or companies cutting corners?

See? Market analysis pays off! Atta boy Hyundai!

An "atta boy" goes out to Hyundai today.

They have launched an "Assurance" program, which basically says that if you buy a Hyundai and then lose your job (within a year), you can give it back.

Imagine that!

So here's a company that truly took market analysis to heart. I can see it now - marketing people, agency people and executives sitting around a table begrudgingly reviewing the latest market trend analysis, and coming to the harsh realization that sales are down because people are worried about losing their jobs and being stuck with the car payment. But, instead of blaming company performance on market factors that seem beyond their control, they decided to negate the impact of that factor altogether!

Don't know if it will work, but a brilliant idea, I must say.

Another price promise unkept!

I wrote in a previous post (two below) about Pizza Hut's failure to deliver on their $6 pizza promise. Now we have another culprit committing the same brand offence - GM Goodwrench.

Their latest radio campaign attempts to establish (just as adamantly as Pizza Hut does) that they sell tires for $89.95. They go so far as to survey other retailers for their price ($106 average). But then the spot says "dealers will set individual prices"!!! No they won't. Not according to your ad they won't. The price will be $89.95. There's a mismatch between the advertised price and the actual price - a failure to deliver on the brand promise.

Shame on you GM Goodwrench! You should read my blog more often!

If you can't deliver on a promise, don't make it!

Pizza Hut has a new campaign - $6 pizzas every day. They even have a TV spot where someone drags in a "pizza special matrix", implying that you can only get a deal on pizza from certain restaurants on certain days. The other actor then dramatically destroys the matrix, pronouncing that Pizza Hut pizzas are $6, every day. 365 days a year.

Then they say at the end of the spot: "Prices may vary."

WHAT!?!?

You just said prices don't vary! You were quite adamant too.

This bothers me because I'm sure (since I spent some time in a franchise organization) there's some clause or some rule that gives individual Pizza Hut owners the freedom to set their own prices, necessitating the disclaimer. But if you make a claim with such conviction then can't back it up, you damage your brand reputation (remember when Ford said they could make a quality product?). Either refrain from the claim, or force individual business units to adhere to the market positioning.

Brand management is so delicate. Everything you say or do either enhances or weakens your brand reputation. Pizza Hut has done some damage to their brand here.


Have your say: Is a disclaimer statement like that influential enough to sway someone's opinion about a brand promise?

Would someone please sell me something!?

Fireworks! Canada Day weekend! You can feel the excitement in the air - people are buzzing, crowds are building... and we all sit there waiting.

There must have been a couple thousand people at the fireworks display in Tobermory this past July 1. The posters on the streetlight posts tell you to arrive at 9:30pm. We all show up at 9:00pm because we want the best seats. And the show doesn't start until 10:15pm. So what happens in the 75 minutes between when we all arrived and when the show begins? NOTHING!

Of all the retailers in town (the fireworks were held in the harbour - the centre of town), not one was open (except the bars), and not one tried to sell me anything.

How hard would it be for the local BeaverTails (to die for!) franchise to send someone around with one of those trays that you can carry around your neck (like the popcorn guy at hockey games) selling ready-made BeaverTails for $5 each? They would have sold 1,000!

How hard would it be for the Fish and Chip Place (yep, that's the name of it, and I think it's a good one for that matter) to stay open an extra 2 hours? They have an outdoor deck that is a prime viewing location for the fireworks. So instead of staying open until 11:00 and selling us all a whole pile of fish and chips and drinks, they scurried everyone OFF the deck so they could close by 9:00. I would have advertised "Watch the fireworks here!" all week long. Would have taken reservations, and filled the place until 11:00 (or even later). Would have been the best night of the summer!

Please, I'm begging you, sell me something! When you're in business, you have to keep thinking: 'how can I sell more today?'

Working IN your business means closing up on time. Working ON your business means staying open two extra hours so you can have your best night of the year.

There's a fee to read this blog

I visited a web site the other day that listed vacation properties - places to rent if you want to get away for a week. I discovered (in time, thankfully) that to book through them, you were required to pay a $75 "transaction fee".

Now, many of you are surely wondering what the big deal is. But think about it - a fee to process the transaction?! Every business in the world processes a transaction at some point. This is purely a way to appear less expensive, when really they aren't. In this case (as an example), booking a rental through them costs $925... plus a transaction fee (in mice type of course). They are hoping that you will compare that price to another agency renting the same place for $1000 (with no extra fees) and assume the $925 price is that much better.

They are assuming that we are stupid, and that bothers me.

It is clear to me that "transaction fees", "processing fees" and "administrative fees" are sneaky pricing illusions designed to disguise the real price and fool the consumer. And often times, it's too late - you go through the (usually online) transaction process only to discover that the "transaction fee" makes the price higher than one of the other options you may have considered.

The airline and automotive industries are notorious. Two Hondas ago, I actually challenged the dealer about that. I asked "what is the $250 administrative fee for?" Without a word of a lie, he couldn't tell me. Neither could anyone else in the dealership (I made him ask). Now, I'm a big fan of Hondas, so I bought the car anyway. And Honda is not the only perpetrator in the industry. The point is, that was Honda's way of adding $250 to their bottom line without making the car $250 more expensive... in the consumer's mind. It's backhanded, deceitful and arguably unethical.

Don't do it.

Make the price the price. When the consumer gets to the part where they have to pay, all that should be added is any applicable tax. Otherwise, you're just being deceitful.