At the heart of any marketing strategy is a set of decisions that revolve around the marketing mix, or the four Ps: product, price, place, and promotion. Each of these elements is about value—creating, capturing, delivering, and communicating it. Marketing revolves around this notion of value. And it makes sense. Customers purchase products or services based on how much they gain compared to how much they give up.
Product: Creating Value
The marketing mix starts with the product or service for the target customer. This seems obvious: deliver the right product to the right customer. But in doing so, there are multiple factors to consider, and the context should be broader. The product or service at hand should solve the customer’s needs—all of it. Whole product strategy is one school of thought to address this. According to Geoffrey Moore in Crossing the Chasm, the whole product is “everything required to assure that the target customers can fulfill their compelling reason to buy.”
The primary reason to buy a music player, as obvious as it sounds, is to be able to listen to the songs a customer enjoys or may enjoy. With a cheap, generic music player that doesn’t sell a whole product, the customer would have to go to a third-party website, purchase music, double-check the format, and sync their songs to the device. If the vendor surprises the buyer by electing to not provide headphones, the customer would have to make another visit to the store.
With a whole product, the company provides everything to fulfill customer needs. A music player embodying a whole product strategy provides everything—packaging, peripherals, services, integrations—to minimize friction and to optimally address the user’s need: the ability to listen to their favorite music.
Pricing: Capturing Value
Charging the right price for a product or service is a balancing act. Pricing is predicated on a number of factors, including the competition landscape, your brand, as well as your long-term vision and short-term goals. If pricing is about capturing value, then the strategy should be heavily influenced by the value your product or service provides for customers.
Place: Delivering Value
Delivering value is concerned with how your product will be distributed. How will customers find your product? Will it be sold exclusively in brick-and-mortar stores or sold online as well? The goal of a distribution strategy is to make products available in the right place at the right time in the right quantities. Distribution happens through different channels:
- Distributors or sales agents
- Direct (online, as an example)
Distribution is influenced heavily by where target customer segments are as well as the needs of the business such as reducing CAC.
Promotion: Communicating Value
In order to convince prospective customers to buy your product, you need to explain what the product is, what problems it solves, and why they should buy your solution. Advertising, press coverage, social media marketing, and email marketing are all manifestations of promotion. Communicating value should happen with a message that is clear, targeted to the right audience, informative, and differentiated. In his book Purple Cow, Seth Godin uses the metaphor of a purple cow to describe the power of being remarkable to attract attention. Juxtaposed with an entire field of brown cows, a purple cow stands out and is memorable. Being remarkable and conveying that to the market is an impactful way to communicate value and attract the mindshare of your target audience. Being remarkable requires being unique, offering something other competitors cannot, or being dramatically better than everyone else. Incrementalism won’t cut it.