The four basic principles of marketing - A must read for any SME
Good marketing is essential for any business owner to ensure that the product or service they offer reaches the right people and at the right price. There is a plethora of literature about marketing principles that SMES and business owners can review and study. One of the most common principles is known as the four basic principles of marketing. The four basic principles of marketing are product, price, place and promotion. In this chapter, we will look at each of these in a bit more detail and understand how each one contributes to the success of a business.
Product: The product is the most important part of any business. It should be something that solves a customer’s problem or satisfies their needs. It should also be something that is unique or different from similar products on the market. When creating a product, you should consider factors such as quality, features, design, packaging, warranty and services. A good product should be easy to use and understand so that customers can get the most out of it.
In addition to the core aspects of creating a product, understanding the emotional appeal it holds for customers is vital. For instance, the aesthetics of a product can significantly influence buyer behavior, particularly in markets where style and design distinguish one product from another. Think about Apple's approach; their focus on sleek, user-friendly designs contributes heavily to their market success. Moreover, in today's environmentally conscious world, products that offer sustainability features can be particularly appealing. A comprehensive approach to product development, considering these additional dimensions, can significantly enhance the product’s marketability.
Price: Price is an important factor in marketing because it determines how much customers are willing to pay for a product. It should not be too high or too low but rather somewhere in between that customers find reasonable and affordable. You should also consider the cost of production and the profit margin when setting the price of a product.
When considering price, it's also essential to understand the perceived value of the product from the customer's perspective. Dynamic pricing strategies, such as promotional discounts or loyalty rewards, can help adjust the initial price perception assisting with building long-term client relationships and market penetration pricing can be an effective approach especially when entering a new market segment. Setting prices low to attract a large number of customers and gain market share quickly is something that is commonly undertaken by new market entrants. After establishing a foothold, prices can be adjusted accordingly.
Place: Place is about where and how you distribute your product. It is important to choose a place where your target customers are likely to shop. This could mean setting up an online store or physical store in an area that is convenient for customers. It is also important to consider how to deliver the product and how much it will cost to do so.
Expanding on the concept of place, the integration of digital and physical channels often enhances the effectiveness of distribution. This approach not only broadens accessibility but also caters to the varied preferences of different consumer segments. For example, younger demographics may prefer online shopping due to convenience, while older customers might value the tactile experience of a physical store. Additionally, strategic partnerships with established retailers or distribution networks can amplify a product’s reach significantly, enabling it to penetrate markets that might otherwise be inaccessible due to logistical or cost barriers.
Promotion: Promotion is how you get the word out about your business and products. This could include advertising, word of mouth, events, social media or search engine optimization. You should plan out your promotional strategy before launching a product or service to ensure that it reaches the right people at the right time.
Beyond traditional and digital marketing strategies, engaging with customers through experiential marketing can create more profound connections. This involves creating memorable, interactive experiences that resonate on a personal level, encouraging both loyalty and word-of-mouth promotion. For instance, pop-up events or interactive online webinars can effectively demonstrate product use and benefits, providing a hands-on experience that online ads or passive marketing cannot achieve.Leveraging data analytics to understand customer behaviors and preferences can tailor promotional efforts more effectively, ensuring that marketing messages are personalized and relevant, which can significantly increase conversion rates.
These are the four basic principles of marketing that all business owners should understand and use when launching a product or service. They should be used in combination with each other to ensure that the product reaches the right people at the right price and in the right place. With a good marketing plan, businesses can increase their sales and profits over time.