Many think of marketing as “sorta” just another name for sales and selling, but are vaguely uncomfortable with that formulation and sense that marketing is a little different or broader than just sales.
That feeling of unease is justified. Marketing is far more than just sales.
Accordingly, there is no one marketing “silver bullet.” Marketing is most accurately and conveniently synthesized by its five constituent parts — traditionally referred to as the “Five Ps of Marketing.”
Jim Skinner, vice chairman/chief executive officer of McDonald’s, unequivocally subscribes to the vital importance of the Five Ps. He made this clear in his annual letter to shareholders for 2011. That year, McDonald’s achieved 34.7 percent total shareholder return, the best performance among the 30 component companies in the Dow Jones Industrial Average.
“Our performance is driven by two key factors,” Skinner wrote. “The first is our ongoing commitment to the Plan to Win, which has served as our operations road map for the past nine years. The plan focuses on the core drivers of our business — people, products, price, place and promotion, or the Five Ps.”
Let’s briefly examine each ‘P.’ Keep in mind: once one buys into the Five Ps marketing concept, to be effective it must be a long-term commitment, investment and consistent branding image.
First P: Product
There are several basic considerations involved in the first P, product (or service). These include the need for the product, its uniqueness/niche, profitability, sustainability, its fit with your skill sets/interest, target customers, competition, distribution/service/equipment, and entry cost. Thoroughly research the viability of each.
Second P: Pricing
The second P, pricing, involves three components: materials, labor and overhead. A business operator should “game” various individual product costs, pricing scenarios and sales levels to develop comprehensive, three-year cash flow/budget projections.
Keep in mind that inventory is often the biggest cost. Retailers should use appropriate point-of-sale equipment. Many operators don’t charge enough, so experiment up.
Third P: Promotion
The third P, promotion, involves developing positioning strategy. This is the most important marketing concept.
In one concise paragraph, craft a crystal-clear concept of your product or service, its unique benefit(s) and how you will market it. Your offering’s benefits, and presentation, must persuasively separate it from competition to gain a following and give you pricing power.
After development of convincing positioning strategy — and only then — prepare your marketing plan, creative plan, media plan, goals, etc.
Fourth P: Place
The fourth P, place, focuses on the storefront or other resources involved in sales and distribution. These may include stores, a website, direct mail, trade shows, social media, phone marketing, supply chain/manufacturer, order processing/fulfillment, etc.
Fifth P: People
The fifth P, people, includes employees, who are often the face of your business to customers. The staffing process for a business involves several considerations: job descriptions, compensation, checking of references, not just hiring “yourself,” establishing probationary periods, an employee handbook, pay for performance, zero tolerance for dishonestry, training/development, importance of profit, taxes and other employee administration requirements, etc.
I am frustrated by this sketchy outline of the Five Ps, but space constraints rule. For more in-depth discussion, call me at (231) 526-2637. I hope you do.
Bill O’Brien has a background as an advertising executive and is a volunteer business counselor with SCORE’s Tip of the Mitt chapter. The “Scoring in Business” columns provided by SCORE counselors appear the second and fourth Wednesdays of each month on the Business page. The SCORE chapter can be e-mailed at firstname.lastname@example.org. Mail can be sent in care of the Petoskey Regional Chamber of Commerce, 401 E. Mitchell St., Petoskey, Mich. 49770.