Wednesday, September 10, 2014

7P's of marketing mix for Product Managers

You've made a great product. You've defined your market segment, crafted compelling positioning ensuring competitive advantage, and identified perfect pricing strategy for the product in a clear and relevant way. And now you are ready to take the product to the market.

Ahhh…. You realize that the marketing plan is built around a traditional guide with a bunch of conventional methods risking the product launch, a critical time for any company, the success of which can determine your product’s survival.  And now you want to carefully examine the marketing plan of your product one last time for marketing mix to ensure success of the product.

The marketing mix is a business tool used for marketing products and services, to determine the product or brand’s offering, and is often associated with the four P's: Product, Price, Place and Promotion, extending to three more P’s: People, Process and Physical Evidence. Each “P” of the marketing mix has its own significance and all of them should be evaluated altogether for a perfect marketing plan. Applying this simple marketing tool enables you to identify which activities are effective and under what circumstances, enabling you to use them again when appropriate. Let’s take a look at each “P” and see why they impact the product, and what are the points to consider for each of them.

7Ps of Marketing Mix
Product Price Place Promotion
What is it Any tangible good or an intangible service that satisfies what a customer wants. The amount customer pays in exchange of the product or service Refers to providing the product at a place which is convenient for consumers to access. Various strategies applied to raise customer awareness of a product or brand, generating sales, and creating brand loyalty.
Why is it important There is no point in making a product that nobody wants to buy. Successful companies first find out what the customer wants and then develop the right product. The price of your product is a cost to the customer and helps identify the importance of the product to the customer.
An underpriced product loses excess additional money that the customer is willing to pay for an existing product or service whereas on overpriced product result into loss of sales and revenue.
Delivery performance is one of the most important criteria when choosing a supplier.
Distribution channel members can provide greater efficiency in making the availability of goods to the target markets through their contacts, specialization, experience and scale of operation.
Promotion helps increase product awareness, product knowledge and preference, increase distribution network, and sales.
Remember, whatever method of promotion you're using today will, sooner or later, stop working.
Points to consider Ensure that:
1. The product provides desired value to the customer
2. The product is a strategic fit to the company’s product portfolio. It is an addition to the existing product line or length.
3. Be cautious going too far on product quality and delay launch when the customer is happy with ordinary product.
4. Develop a mechanism to regularly check what customers think of your product, their usage pattern, their needs and wants.
1. The price should be competitive but not necessarily cheap.
2. It is one of the ways to position your product in the market. The more you charge, the more value or quality is expected by the customer.
3. Consider the pricing objectives of the product, be it market penetration, company growth, survival or profit maximization, and offer the product at a price suitable to the objective and has market acceptance.
1. The means of product or service distribution should be appropriate and convenient to the customer.
2. The product must be available to the customer at the right place, at the right time and with the right quality keep costs within acceptable level.
3. Distribution strategy for the product should be properly designed considering various channel design, channel mix, channel management etc.
1. Promotion should communicate on the benefits that a customer obtains by use of the product and not just the features of the product.
2. Whether the promotional material is a leaflet or complex brochure, it must attract the customers. It should be easy to read and communicate WHY they should buy the product.
3. Ensure that internal stakeholders are aware of the value and attributes of the product so that they can re-share with the customers.
People Process Physical Evidence
What is it Everyone who contributes to the product development. It includes each member of the cross-functional team. The processes and systems within the organization that affect the delivery of product and / or execution of service The evidence which shows that a service was performed, such as the delivery packaging for the item delivered by a delivery service
Why is it important Customers make judgments about product delivery and support based on the people representing your organization.
Having the right people is essential because they are as much a part of your business offering as the products/services you are offering.
Process is the way in which a service is delivered to the end customer. Companies thrive on their quick service and the reason they can do that is their confidence in their processes. The intangibility associated with the service makes it risky business to be chosen for use.
Physical evidence helps potential customer “see” what they are buying.
Points to consider 1. All members of the team should must be appropriately trained, well motivated, and have the right attitude.
2. The entire customer facing staff should not only be properly trained, but also be the right kind of people for the job.
3. The support person becomes very critical to the consumer of the product once it is sold, even more important than price in case of product lock-in situation.
4. Consider undergoing accreditation for the staff to show your team better than the rest.
1. All process should be customer centric. Remember, the processes are designed to ease customer interaction with the company or usage of the product.
2. Product / service should be supported by clearly defined and efficient processes for leads, delivery, support and maintenance.
3. Have a product / service blue print providing details of the product / service delivery process, often going down to even define the lead generation / service script and the greeting phrases to be used by the service staff.
1. Physical evidence demonstrated by the company must confirm the assumptions of the customer.
2. Physical evidence should match the actual product to be purchased by the customer.
3. Consider using physical evidence to use as a differentiator in service marketing.

Each "P" of marketing mix is a key to success. None of them can be considered in isolation. Though the last 2 Ps, i.e. Process and Physical Evidence are important for service marketing, they are of equal importance to products that requires customer lock-in before being produced. Examples are apartments built by real-estate firms, expensive industrial grade machines that require an upfront booking amount or product that are delivered with the service.

An effective marketing strategy must be designed by doing a detailed investigation of the market and segments. This is followed by a marketing audit by conducting PESTEL analysis, various trends and company’s own position and its resources. A marketing plan is then developed by defining budget, objectives, targets and other KRAs. The marketing plan for new product launch should be evaluated against the “points to consider” items and modified accordingly. The marketing strategy should be then finalized with a specific plan of action, only to be constantly monitored and updated as the marketing campaign progresses.

It’s your turn:

What do you think? How do you ensure that the marketing plan designed is suitable to the new product? Share your experience in the comments box below

1 comment: