The Marketing Paradox - Part II
The Essentials of Marketing &
Determining What to Outsource
 

When devising a marketing strategy there are five key areas you should focus on. These main focal points are commonly referred to by marketing professionals as The Five Ps. They are product, promotion, price, place and people. In order to be successful in your marketing you must understand The Five Ps and how they apply to your overall business model and marketing strategy. Once you understand how The Five Ps relate to your marketing goals you can then make the decision as to which of these processes are best done in house and which you may be better off outsourcing.


1. Product (or Service)
First and foremost, you wouldn’t be in business if you were not selling a physical product or providing a service to your customers. The most important things to consider when marketing your product or service are: What is its purpose? What need, or problem, does the product solve? What does it look like (is it visually appealing or is it designed simply to fill a need?) How do you plan to package it? What are its secondary or alternative uses? And lastly, can you provide a guarantee or warranty for it.

2. Promotion
This is how you choose to promote and sell your products. Promotion includes advertising, product slogans, media campaigns, PR events and the like. When determining what type of promotion works for your business it is absolutely necessary to understand the lifetime value of a customer. The lifetime value of a customer is simply the amount of money that a customer will spend with your company throughout the duration of your business relationship. Once you know this you can then determine how much you can afford to invest to acquire new customers while still generating a profit.

3. Price
This should be directly proportional to the lifetime value of your customers and the costs associated with acquiring new customers. This will help you determine how much to charge for your products or services. You must also take into account your competition when determining your price structure. You can price yourself out of the customer’s decision making process by setting your prices too high, or even too low, from your competition. If you are selling a product or providing a service that is viewed as a commodity, you don’t necessarily have to have the lowest price, but you will need to be competitive. On the other hand, if your price is too far below the average your prospects may be skeptical of the quality.

4. Place
How do you get your product in the hands of the end user? Do you have distributors or do you sell direct, or both? How you sell will determine your target market area. Your market area will in turn affect your overall marketing strategy. Place can also affect the level of service that you provide to your clients. Selling your products by shipping them directly to the customer allows you to operate on a national level, as opposed to selling only through a distributor that limits your market area. How you sell is also related to what you sell. Products such as framing lumber and concrete for example won’t sell on a national level due to shipping costs. On the other hand, specialty products that require high levels of expertise, such as custom made doors, windows and one of a kind architectural enhancements, will sell well on a national level.

5. People
The people you choose to represent your company are just as important as the product you sell or the service you provide. Ideally you want people who are customer oriented, experts in their chosen fields and possess a high level of understanding regarding your company’s mission and market goals. The primary function of your employees is to present your company image to the public.


Now that you are familiar with The Five Ps and how they relate to your marketing strategy let’s take a look at some ways to deal with the tasks associated with each. Start with the product, or service, and make sure that your marketing efforts are focused on the benefits it provides. People make purchases based on needs. You don’t buy a drill because you need a drill. You buy a drill because you need a hole and the drill is the means to that end. Developing a marketing campaign centered on the benefits your product provides is something that may be best handled by marketing professionals. It is a good idea to work collectively so that you have someone who is a product expert, knows its functions inside and out, and someone who is an expert on buyer psychology so that you can convert product functions into customer needs.

When you are considering how to promote your product and the people you want to do the promotion, keep in mind that there are outsourced options available that can provide better-quality alternatives. By selecting a marketing company who specializes in your target sector you gain valuable marketing insight that your own people may not possess. A professional marketing company will also provide you with a cheaper alternative to hiring more full-time marketing personnel. By tracking the results of your marketing efforts you will develop a better understanding of the lifetime value of your customers. This in turn will lead to a more efficient way of budgeting your marketing dollars and an increase in profits.

When hiring a company to handle the marketing and promotion of your business there are some important factors to consider in your decision making process:

• It is generally a good idea to go with a company who works with your target market group. There are plenty of marketing companies who focus on specific industries, so shop around until you find one that works primarily with your target market.
   

• Choose a company that is capable of delivering your message on multiple platforms. Selecting a company who only does direct mail may come back to hurt you if you decide you want to launch an Internet marketing campaign later on. Now you will have to select yet another company and your marketing efforts become more difficult to coordinate.
   

• Go with a company that is willing to spend time researching your company’s products so they can help you develop a winning strategy. There are plenty of marketing companies out there who will just take the promotional material you provide them with and send it out via print advertising, flyers, E-mail or whatever it is they do. This is probably ok if you have an in house marketing team that has developed a proven advertising message but most companies do not. This is why they are turning to outsourcing in the first place. In the end you want to select a company that will take the time to learn about your products and what your business goals are.
   

• Find a company that you are able to communicate well with. You want to be able to bounce ideas off each other and work closely together when developing your marketing campaign. It is important to designate a member of your marketing team, or yourself, to maintain regular correspondence with your outsourced workhorse to ensure a sustained and progressive effort.

The Five Ps of marketing are something that all business owners and marketing staff should be intimately familiar with. Not only will they help you to develop a successful marketing strategy, but when approached logically they can help you increase overall business efficiency as well. There are, of course, certain inescapable process details that must be left to upper management, mainly issues dealing with the product, price and place of your marketing strategy. Other marketing essentials, like developing a promotional campaign and executing the actual promotion, can be outsourced to professionals so that your people can focus on other areas of the business.

Even if you have an in-house marketing department outsourcing still offers attractive and affordable alternatives to marketing roadblocks. If you don’t have any formal marketing personnel to speak of, then hiring a team of specialists for mere pennies on the dollar of what it would cost you to hire a single full time marketing person becomes that much more attractive...

Article by,
Nick Denroche
VP of Marketing
Contractor Power
nick@contractorpower.com

Contractor Power offers an outsourced marketing solution for companies in the construction industry. For additional information call 609-693-9778.