Product, Price, Place and Promotion. These have long been the 4 pillars of marketing, but are they still relevant? Putting the right product in the right place at the right price with the right promotion meant you would have the greatest chance of marketing success, does this still ring true? Focussing your marketing on the traditional 4P’s makes it easy for the customer to ‘cherry-pick’ from a shopping list and makes your sales team focus on price and specific product features. It’s time for a change.
Are The 4P’s of Marketing Still Relevant?
The 4P’s have been in every textbook ever written on marketing, and even been expanded to 7 p’s by some marketers to include People, Process and Physical Evidence. But just as social media has changed promotion, the relevance and application of the other “P’s” are now being questioned. Respected business publications like the Harvard Business Review and McKinsey’s Quarterly are starting to ask whether the way we have traditionally looked at the marketing mix needs to be freshened up.
The 4P’s of marketing have served us well. Businesses that got the mix right were often more successful. Creative marketers knew how to manipulate the mix for different customers to achieve different results. But by simply looking at these finite items we run the risk of making our clients and sales teams product and price centric. Expanding the concept associated with each of the core principles of the 4P’s, businesses can make themselves more relevant and in turn develop an opportunity to better differentiate them in the market.
Solution v Product – In a B2B market, your customers are rarely looking for just a product. They are not looking at your features, but are looking for a solution to a problem. What benefits do you deliver? The company that can best identify, articulate and provide the best solution to the problem will win the deal. Businesses are today more than ever focussing on their core activities so purchases are made to allow them to retain that focus, reduce costs and improve productivity. Solutions deliver, not products.
Focussing on the solution and not the product creates a change of mindset as it forces you look at the sale through your customer’s eyes. What is it they are truly trying to address with their purchase? What issues are they facing post-sale that can be addressed by packaging products and services into an integrated solution? Selling solutions provides an opportunity to differentiate your product from those of the competition and makes it difficult for them to compare, and buy, on price alone.
Awareness v Promotion – Promotion suggests an advancement of your position and leads to an organisation thinking about how to encourage a prospect to make a purchase. There is nothing wrong with this as any marketing activity should lead to a sale and a positive experience for both parties, but how this is done, is changing. Such is the availability of information in today’s online world, some marketing research is suggesting that your customers could be as far as 70% into the buying cycle before they engage with a sales person. Even if this is only partly true, providing relevant information to the market about your solution at each stage of the buying process positions you best to be favourably engaged.
Value v Price – A sale is never made on price. A bold statement; but true; particularly in B2B sales. Value is defined as the relationship between what you are charging (the cost) and the perceived or expected benefit your customer will receive. Even with commodity items people will pay a premium for better service or quicker delivery – they see this as ‘added value’ for which they are willing to accept a higher cost. If, in the customer’s mind, the price you want to charge does not provide more significant benefits than a similar competitive offering, they are unlikely to choose your product or service.
What problem are you solving and what cost did the problem have for the business? What production improvements are you helping deliver and what will be the profit impact of such improvement? The more benefits you can deliver at the same cost, the greater the value. Make your solution relevant to the customer.
Integration v Place – While ‘Place’ traditionally looked at the locations and channels that were most appropriate for a potential customer to make a purchase (ie the final step in the sales process), business must now consider how the solution will fit into the customers business. How will it be packaged? How will it be delivered? How will it be installed or deployed? How will it fit into the value-chain? Considering the integration as opposed to only the interchange of goods and money, makes you part of their business and greatly improves the opportunity of establishing a long-term relationship.
Marketing is being driven by changes in how customers choose to engage in the sales process. Continuing to force the traditional 4P’s into this new world of sales engagement will mean that businesses that fail to adapt, will in turn fail to prosper. Change is inevitable in all business, marketing is no exception.
6 Key Points when Selling a Business
/in Business Strategy /by Wayne MoloneyIn a recent article by RSM Bird Cameron six key pints were highlighted when considering exiting a business. The key learnings from the article are:
Want to make money through improvement in your operations…..quickly – here’s how.
/in Process Improvement /by Mike KarleWhat is MORE important – focus on the outcomes or the inputs to your business? I would argue that the output – e.g. profits or sales is a direct result of what you and your people are working on during the month, in other words the inputs.
The old computer saying – “garbage in garbage out” is true for how we run our businesses. So how do we know what we should be working on and how do we know it is directly related to my financial performance?
Step One: Identify the critical things you do in the business – or business processes.
For example a contract builder has about three critical processes to get right –tendering, sub-contractor selection, project management. These are all processes with inputs, step by step actions and if all are not well executed there is a high risk of losing REAL money.
So, first things first, look at your business and identify those top 5 critical “things” you and your team do each month. Write each one on a separate sheet of paper. On the left hand side write what you/your team do well; on the right hand side right what you could do better. Try and fill the sheet for each of your critical processes.
Step Two: What do I work on FIRST?
It is essential that you DO NOT try to fix everything at once, otherwise you will fail.
Review your five sheets of paper with your critical processes listed. Select those three that “if we get these right we will make a lot more money.”
Now with these three, review each sheet and highlight the most important What We Do Well and what We Could Do Better.
You now have six critical “things” to measure.
Why do we look at what we do well? Simply because this is why you are a success, why your customers buy from you and how you are positioned in your market. So KEEP DOING it and let all your people know this is critically important to the success of the business. Also, never take your eyes of these and do not let them slip while you make other improvements.
Step Three: Measure, Monitor & Remember?
For the six areas you have identified – set up a weekly measuring system for each one. One could be hours spent re-working mistakes. Get this down and you will make more money.
Report them each week, ideally on a big board so all the team can see. Have the actions that will be done over the next two weeks written out so everyone knows what is going to happen.
Do this for 3 months and see how you go. If the three that you do well have stayed flat or improved, FANTASTIC. Likewise if the three you could do better in have improved then FANTASTIC AGAIN. Your business results will be improving as a direct result of working on the INPUTS.
Remember – celebrate your success with the team and go back to Step One every three to six months. Within a short period of time your business will be on the path to Excellence.
Are the 4P’s of Marketing Still Relevant?
/in Marketing /by Wayne MoloneyProduct, Price, Place and Promotion. These have long been the 4 pillars of marketing, but are they still relevant? Putting the right product in the right place at the right price with the right promotion meant you would have the greatest chance of marketing success, does this still ring true? Focussing your marketing on the traditional 4P’s makes it easy for the customer to ‘cherry-pick’ from a shopping list and makes your sales team focus on price and specific product features. It’s time for a change.
Are The 4P’s of Marketing Still Relevant?
The 4P’s have been in every textbook ever written on marketing, and even been expanded to 7 p’s by some marketers to include People, Process and Physical Evidence. But just as social media has changed promotion, the relevance and application of the other “P’s” are now being questioned. Respected business publications like the Harvard Business Review and McKinsey’s Quarterly are starting to ask whether the way we have traditionally looked at the marketing mix needs to be freshened up.
The 4P’s of marketing have served us well. Businesses that got the mix right were often more successful. Creative marketers knew how to manipulate the mix for different customers to achieve different results. But by simply looking at these finite items we run the risk of making our clients and sales teams product and price centric. Expanding the concept associated with each of the core principles of the 4P’s, businesses can make themselves more relevant and in turn develop an opportunity to better differentiate them in the market.
Solution v Product – In a B2B market, your customers are rarely looking for just a product. They are not looking at your features, but are looking for a solution to a problem. What benefits do you deliver? The company that can best identify, articulate and provide the best solution to the problem will win the deal. Businesses are today more than ever focussing on their core activities so purchases are made to allow them to retain that focus, reduce costs and improve productivity. Solutions deliver, not products.
Focussing on the solution and not the product creates a change of mindset as it forces you look at the sale through your customer’s eyes. What is it they are truly trying to address with their purchase? What issues are they facing post-sale that can be addressed by packaging products and services into an integrated solution? Selling solutions provides an opportunity to differentiate your product from those of the competition and makes it difficult for them to compare, and buy, on price alone.
Awareness v Promotion – Promotion suggests an advancement of your position and leads to an organisation thinking about how to encourage a prospect to make a purchase. There is nothing wrong with this as any marketing activity should lead to a sale and a positive experience for both parties, but how this is done, is changing. Such is the availability of information in today’s online world, some marketing research is suggesting that your customers could be as far as 70% into the buying cycle before they engage with a sales person. Even if this is only partly true, providing relevant information to the market about your solution at each stage of the buying process positions you best to be favourably engaged.
Value v Price – A sale is never made on price. A bold statement; but true; particularly in B2B sales. Value is defined as the relationship between what you are charging (the cost) and the perceived or expected benefit your customer will receive. Even with commodity items people will pay a premium for better service or quicker delivery – they see this as ‘added value’ for which they are willing to accept a higher cost. If, in the customer’s mind, the price you want to charge does not provide more significant benefits than a similar competitive offering, they are unlikely to choose your product or service.
What problem are you solving and what cost did the problem have for the business? What production improvements are you helping deliver and what will be the profit impact of such improvement? The more benefits you can deliver at the same cost, the greater the value. Make your solution relevant to the customer.
Integration v Place – While ‘Place’ traditionally looked at the locations and channels that were most appropriate for a potential customer to make a purchase (ie the final step in the sales process), business must now consider how the solution will fit into the customers business. How will it be packaged? How will it be delivered? How will it be installed or deployed? How will it fit into the value-chain? Considering the integration as opposed to only the interchange of goods and money, makes you part of their business and greatly improves the opportunity of establishing a long-term relationship.
Marketing is being driven by changes in how customers choose to engage in the sales process. Continuing to force the traditional 4P’s into this new world of sales engagement will mean that businesses that fail to adapt, will in turn fail to prosper. Change is inevitable in all business, marketing is no exception.
Become A Better Negotiator
/in Sales /by Wayne MoloneyRegardless on the type of business you are involved with, negotiation is something we are engaged in on a day-to-day basis. We negotiate with customers, staff, suppliers, partners, family and friends.
So if negotiation is such an important part of our lives, how do we do it better? All too often negotiation is seen as a ‘I win, you lose’ scenario, but truly successful negotiations are about alliance, not conflict. Much more can be achieved in a collaborative manner that will result in long lasting and rewarding relationships. Here are a few simple steps to help you become a more successful negotiator.
Whether negotiation for business or in our personal lives, with internal or external stakeholders; we could drastically improve our lives if we just adopted these simple steps.
Go ahead and try it – you might be surprised how good a ‘win/win’ situation feels and the benefits it can deliver.
Can China save Australian manufacturing?
/in Business Strategy /by Mike Karleless attractive, in short prices in real terms is increasing and service such as lead times is increasing and reliability of delivery is decreasing.
the percentage of labour saving is becoming so small against the raw material cost coupled with the risks of
delays and quality issues – the total price offered (including a risk factor for poor service) is not longer competitive on some lines”“on some lines it is cheaper to have garments manufactured in Australia – the risks are lower and the service is superior”
“Italy is now responding with samples in two days where as China is taking weeks – this is a complete turnaround for ten to fifteen years ago”.
Process Improvement – the Essence of Lean
/in Process Improvement /by Mike KarleLean is a philosophy to continuously identify and eliminate waste within an organisation, where waste is defined as any activity that does not, from the customer’s perspective, add value. Fundamentally the Lean Philosophy is about continuous process improvement to create a business system that optimally responds to customer demand.As is shown in figure 1 below, Lean can be depicted as a repetitive 5-stage process that begins with the identification of the value desired by the customers, where a ‘customer’ in this instance is not limited to the external customers that actually pay for a product or service, but includes any service recipient within the business itself.
Figure 1. Lean is a continuous 5-stage process
Having listened to the customer to understand the true value of the product or service from the customer’s point of view, one can then progress further down the Lean path and identify those internal processes that, again from the customer’s perspective, contribute, or add value to the product or service, i.e. identify the value stream for each product or service group. In order to improve any process, one must first gain a thorough understanding of its current state and the simplest way to achieve this is to draw or map the process to create ‘process map’. As shown in figure 2, this is the sequence of all current processes, both value adding and non-value adding from raw material to product launch or from initial customer contact to service completion.
Figure 2. Basic Process Map
By adding information flows and other relevant data including lead times, batch sizes, processing times and number of operators to the process map, one can create a true Value Stream Map that can be analysed to identify problem areas, eliminate waste and plan for an improved future state. The classic Deming PDCA improvement cycle is often used as powerful tool in conjunction with process and value stream maps, to create flow (the third stage of Lean), and ensure that improvements are carried out in accordance with a well organised and defined methodology.
Figure 3. Deming’s PDCA Improvement Cycle
In Deming’s cycle, the Plan is not just about planning, but also includes communicating and gaining consensus. Far too often companies neglect this phase and fail to properly identify constraints and/or ‘root causes’ of problems. It has often been stated that Japanese companies take much longer to plan, but then implement improvements faster and more smoothly than those companies that don’t. Do is the easy stage where the actual implementation is carried out, and this must be followed by the all important Check phase. The Check is actually a learning phase where the prevailing question should be “is the change sustainable and did it work as we predicted, and if not, what can we learn for next time?” The final phase is the Act, where the emphasis is to standardise and communicate the improvement, prevent recurrence and to prepare for the next round of the cycle. The PDCA sounds simple but it is often glossed over as many organisations concentrate on the ‘do’ and neglect the P-C-A, or alternatively adopt Murphy’s corollary to Deming’s PDCA cycle, i.e. “Please Don’t Change Anything”.In addition to process and value stream maps, various other analysis tools can be used in the PDCA cycle, for example, spaghetti diagrams, fish-bone diagrams, root cause analysis, activity sampling and risk analysis. Further, the PDCA cycle may be varied to encompass the 6 Sigma methodology known as DMAIC (Define, Measure, Analyse, Improve, Control), but the fundamental aspect of the improvement cycle remains unchanged.Process improvement is the essence of Lean, for without improvement, any organisation will fail. For a sustainable business, process improvement must reach all levels and involve all value streams within the business, both internally and along its supply chain.For further information contact:
Mike Karle
Mobile: 0410 780-627
mike.karle@informgroup.com.au
Bridging Business Silos
/in Business Strategy, Human Resources /by Wayne MoloneyMy colleague David Burgess recently wrote on Optimal Organisation and made the comment – The argument that organisational structures can form “silos” which leads to dysfunctional outcomes simply highlights that the procedures are not developed to link the organisational structures to provide the desired outcome.
Now didn’t that strike a chord with me. I had a client who wanted help defining his business strategy and putting this into a business plan that could guide his management team. I started by chatting with his managers and quickly realised that none of them had the same understanding of the businesses direction, or their role in it as the CEO. This surprised the CEO as he had lunch with members of his management team every day, generally meeting each of them in this way over a fortnight.
Of most concern was the fact that some of the management team believed one of them was a “protected species” – roles had been created for him to move him out of areas where he had not succeeded. Worse, this particular manager would redefine his role to suit what he was comfortable with, rather than what was required by the business.
Now we can all see that this was something that should have been addressed by the CEO, but it wasn’t.
This took the planning project off on a tangent as it was obvious we needed to define the critical functions and related roles within the organisation so we would have a management team able to implement the plan. A functional organisation structure was needed.
Functional Organisation is arguably the most effective form of organisation, because it is designed around functions, rather than people. Each function has its own responsibilities, separate and distinct from any other. The functions don’t overlap, and the scope never changes to fit an individual. Individuals are chosen to fill functions based on their ability, knowledge, training and experience.
Once we established a functional management structure team spirit improved because each department became a team with all personnel within the department reporting to a single person who has complete responsibility for the performance, training, guidance and direction of the department, and who also has the authority to make the department fully effective in accomplishing its goals. While each department must communicate, cooperate and coordinate with all other functions in the company to achieve the company’s overall goals, each individual now reports to only one person, and all directives, orders, requests etc., will be funneled through that person.
Like so many things in business it sounds so simple, but you may be surprised how often it is not the case.
Checklist to Avoid Future Disasters
/in Quality Management /by Mike KarleFor business’s both large and small these eleven points are a pertinent checklist.
Business Plans Need NOT Be Complicated
/in Business Strategy /by Wayne MoloneyI recently met with a business owner who wanted to discuss developing a strategic plan for his manufacturing business.
This business owner knew he needed a plan to get to where he wanted to go with his business, but from previous experience he was worried that the plan would be “a thing of beauty, but of little use to his business. When I asked what he meant by this, he turned to what appeared to be a pile of manuals stacked under a table behind his desk. From this pile he extracted a 50mm, 4 ring binder. This was truly a “thing of beauty” – professionally printed front cover with “business name Strategic Business Plan”, section dividers that had been individually printed and a wealth of background research presented in graphical form. What I had trouble finding was the actions that were needed to be taken by the business management. And the date? 2004.
The business owner expressed his concern that having invested in this plan, he found it difficult to communicate it to his key staff and hence could not get them to buy into it.
So, what did he think he needed? “A simple plan that I can share with my staff and get us moving in the same direction.” At last, he saw what a business plan was all about. Read more →
Negotiation by numbers (and a very smart farmer)
/in Business Strategy, Sales /by Wayne MoloneyA good friend of mine, Jeremy Pollard is a great negotiation trainer. I found this on his Facebook page and had to share it
A farmer died leaving his 17 horses to his three sons. When his sons opened up the Will it read:
My eldest son should get 1/2 (half) of total horses;
My middle son should be given 1/3rd (one-third)
of the total horses;
My youngest son should be given 1/9th
(one-ninth) of the total horses.
As it’s impossible to divide 17 into half or 17 by 3 or 17 by 9, the three sons started to fight with each other.
So, they decided to go to a farmer friend who they considered quite smart, to see if he could work it out for them.
The farmer friend read the Will patiently, after giving due thought, he brought one of his own horses over and added it to the 17.
That increased the total to 18 horses.
Now, he divided the horses according to their fathers Will.
Half of 18 = 9. So he gave the eldest son 9 horses.
1/3rd of 18 = 6. So he gave the middle son 6
horses.
1/9th of 18 = 2. So he gave the youngest son 2 horses.
Now add up how many horses they have:
Eldest son……..9
Middle son…….6
Youngest son…2
TOTAL ….…….17
This leaves one horse over, so the farmer friend takes his horse back to his farm.
Problem Solved!
Moral:
The attitude of negotiation and problem solving is to find the 18th horse i.e. the common ground.
Once a person is able to find the 18th horse the issue is resolved.
It is difficult at times.
However, to reach a solution, the first step is to believe that there is a solution.
If we think that there is no solution, we won’t be able to reach any!