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Monthly Archives: November 2010

It Is About People, People!

If I had to add any P to the 4Ps in the marketing mix, it would be people. I am assuming though that when the 4Ps was introduced, the role of people in the marketing mix was taken for granted. If people needs and wants were not taken into consideration then who are we marketing our products to?

In the 7Ps, an extension of the 4Ps, People were added as the fifth P. In my understanding, if People were another P to add, it would be the first and not the fifth. When you are assuming that People are part of your understanding, you do not usually need to state them in your theory. You are targeting and gearing all your theory towards them. They are a reality and not an assumption; they are the fact and not a theory.

Regardless of the understanding, assumption, or opinion, People play the major role in any marketing activity. It is our desires and wants, our thoughts and innovations, which make a product, succeed or fail.

Innovators made product after product because of their desires. Leaders succeeded in promoting their ideals because of their desires. Years ago, people used to farm their own fruits and vegetables without even using fire. Our ancestors lived and reproduced, hence guaranteed our existence now. When they started using fire they saw its benefits, and cooking became a part of satisfying our desires. Our ancestors may have lived in caves, or some sort of primary housing. It is our desires that made it from wood, or bricks, or follow one design or another. If they were not able to live with their primary housing, we wouldn’t be here. I am not discussing the human psychology over here, although having a general understanding is useful when it comes to deal with people.

In marketing, some always refer to the product as being a need or a want. Desire is a synonym of want. People have their own definitions when it comes to desires. They may classify it as a need. I lived in countries where most of the population does not have electrical power. Cold water lacked in very hot seasons. Yet they did not define electricity as a need. It was a luxury they didn’t need, let alone afford. For me, living mainly in more developed countries, electricity is a necessity. I cannot sleep if the Air Conditioning is not working when it’s hot. I cannot watch TV, browse the internet, or play my gaming console if I did not have electricity.

On another hand, when it comes to desires, people do not have the same wants. This article is an example. Someone who is interested in marketing may read it, while it may not attract someone interested in medicine. Before venturing into a product you will have to know about people, you being one of them.

What you want is essential. Many leaders believed in their ideas. They wanted people to buy into their thoughts. Although in many cases it proved not to be what people wanted, they were successful in gathering followers. Look at Communism, Nazism, Fascism, Socialism, Capitalism, among others, to each their successes and failures, to each their followers, although some caused disasters to humanity. Yet some people bought into the product, the idea and the concept itself.

Yes, your product is about what people need or want, but is also about your own desire. Many on line blogging gurus agree that your success in blogging is based on your passion about the subject you blog about. It is your desire to write about one subject or another that makes your blogging experience successful.

Sometimes your product is old, repetitive, and redundant. That does not mean you will not be able to sell it. Thousands of articles were written about Marketing, yet mine still have a place. Take the Yo-Yo for example, an old toy consisting of a length of string tied at one end to a flat spool. It still attracts my children’s video gaming minds, it is still manufactured, and I still replace it for them every time they break their old ones. Why would someone still produce it? There is still a desire for it somewhere in the world.

Your whole marketing strategy depends on people. If you know what they desire and are able to provide it then you are on the right path to success. If you are offering what you believe in there is hundreds like you out there. You don’t have to cater for the masses to succeed; sometimes it is the focus on the few, like you, that makes you a successful marketer.

In an organization, this cannot be applied without serious challenges, especially if you are in the bottom of the decision making hierarchy. Although I read in many Marketing articles that your product definition should not focus on the masses I work in a field where the masses are exactly what I need to focus on. I can introduce segmentation and focus on it, but I cannot deny my need for the masses in order to guarantee the profitability of my company.

I cannot suggest a product and expect my higher management to approve it just because I believe that a few customers will buy it. I usually provide enough arguments to convince my management, before the public, of my new product. In many cases, my proposals were rejected. Looking back into past experience I know for a fact that some of my ideas (not all) would have succeeded if they were implemented.

I work for mobile operators. Our product is mainly voice services in voice oriented markets. Although some may argue that this product targets the few (those who can afford to pay for such services) but our policies used to target the masses. Everyone was a potential subscriber. Even a newborn child may prompt a parent to purchase a cell phone and our service to communicate with their spouse and check on their child when they are away from their house. On another hand, to guarantee profitability, we could not rely on such seasonal occurrences; we had to focus on certain market segments. Knowing what they would consider as a need and their wants is my main task.

Many large corporations focus on producing a need. In the pre internet era, no one considered a search engine to be a need. I do not think that I can go one day into the internet without consulting one of those search engines for one subject or the other. I am not working in a company that has the size or the budget to manipulate the public wants and redefine them as needs. I do however understand that people are different. Sometimes you have to focus on the consumer’s ego, while bare basics could satisfy another.

In one of my old operations, we were faced with congestion. Some people were not able to place calls, because others were checking their credit up to 10 times after each call (at that time to check your prepaid credit you had to listen to a message as short messaging was not introduced yet). While debating the options, we reached a suggestion to offer one free credit check after each call. This was the best we could do to ensure a feasible call flow. There was a roar among our consumers for that action. Although we expected that only “abusers” would object, we came to find out that many considered checking their balance was their right, no matter how many times they do it. The technical team found out later that we can prioritize the calls. Although the idea was to implement it to everyone, I pushed towards offering it to those who believe they need it, as a paid service. I was not expecting it to become a show-off service. Some business men used to harass their colleagues about not being able to pay for this service. I ended up with triple the number of subscribers I expected for that service. Soon after we upgraded our network and we had no need to prioritize the calls.

Understanding your target consumers desires and needs will save you a lot of the hassle that you may face from skeptical people within your organization or outside of it. You cannot satisfy everyone, just try to understand and learn about your target market. Start with yourself, why do you think your product has a chance to succeed? Do you think others (at least some) will think the same way you do? Is it about you, or are you employed to execute a company’s policy? Humans are social beings and not secluded cases, the more you know about them, the higher your chances are to succeed. After all, it’s all about people, people.

Your comments are always welcome.

Promotion, The 4th P Of The Marketing Mix

As part of the Marketing Mix, Promotion is as equally important as the other three components, Product, Price, and Place. In the 4Cs approach, the term replacing Promotion is known as Communication. Some state that Promotion is rather a manipulative term because it comes from the seller. They prefer using Communication as it involves a certain level of interaction between the seller and the buyer.

I have to disagree with that understanding. In order to communicate or interact, you have two parties involved. One of those parties starts the communication, which leads to interaction if the other party is interested.  By promoting their product, the sellers are actually starting the first step of the interaction process. Although Promotion in the Marketing Mix does not detail the communication process, it never meant that Interaction was to be prevented.

On another hand, many companies that adopted the Communication approach did that for manipulative reasons. During the focus on the customer era, many companies joined the train of what is known as the customer oriented approach. Although initiated a communication process, it turned to be a one sided conversation when it came to what really matters. It is not as some try to portray it, a simple willingness by the business community to communicate with their potential customers, it is rather a well thought of plan to collect sales leads, collect data for market research, etc… In other words, since some companies were doing promotions and not receiving the feedback they wanted they decided to trick us, the customers, into giving them this feedback, by initiating the interaction via communication. Now tell me that is not manipulative! Surely, and thankfully, this is not the case for the majority of the companies

Some also claim that communication does not promote sales. Then what is the aim of communicating your product or your company? Even if it was a political stand, you actually want people to buy into it.  The whole point is that whether you want to use the 4Ps or the 4Cs, you still have to use them as guidelines or reference points. What you have to know about the 4th component of the Marketing Mix, is that you have to put it out there for people to know about.

Successful promotions never occur when you use the wrong media to reach your target customers. I have seen many promotions fail, some were my own, others were my competitors’. Imagine an illiterate public response to a short messages ad campaign. Sending a message to educate the public in one small village about AIDS was a complete failure. Although 25% of these village inhabitants owned mobile phones, they were 100% unable to read and write. You would assume they could by the mere fact that they used mobile phones. Come to find out that they knew numbers, and knew how to dial and receive calls, but knew nothing more when it came to read letters, let alone typing them. Can you imagine any success for a TV advertising campaign in a country where electric power reaches a mere 20% of the population for about 2 hours a day? In such countries, even when your target market is the niche that owns a generator, you will find out that this same niche uses satellite services and will never see your ad on the local channel.

Choosing your media may depend on your financial resources and not only on your target market. You won’t be able to launch a successful TV campaign if your budget allows you to print a dozen of flyers only. Be genuine in your ideas. What you may use as a means of promotion had probably been used by others but it doesn’t mean you won’t be successful doing the same.

When I was in college, student activities were banned for several years due to political tension in the country, which affected the campus too. In my senior year, the administration allowed us to organize the first student activity. In that time everything was looked at from a political or religious angle in a country (Lebanon) where “civil” war lasted 17 years.

We were independent students, who could not afford a big budget for advertisement (The College only provided the hall) and politically attached students had every intention to make our activity fail, in order to show their later activities as a success. We had budgeted to distribute flyers around the campus but due to the importance of the event we had to make sure that we do our best. After all, it was the first student event in years after the ban.

Our budget showed that we could afford 500 flyers. It meant that every flyer should guarantee the presence of 1 person to fill the auditorium. What I did is to reduce the size of the flyer. I only stated the time and place of the event. This gave us 5000 tiny papers rather than 500 flyers. We distributed them via student mail boxes, on the benches, and any other place that was fit.

I was looking for the number of flyers to ensure the spread but I also took into consideration not to cause any political sensitivity that can be triggered by misunderstanding the name or aim of our event. On the day of our event the organizers, including myself, were finalizing the preparation of the auditorium. The Doors were open 10 minutes before the start, the auditorium was full and people kept coming during the 2 hours event. It was definitely a success and I was especially proud when I heard comments from friends and “foes” that the small flyers were the essential cause in bringing this crowd.

By concluding this article about promotion, I am not be concluding the presentation of the 4Ps as I see it. I believe that a thorough understanding of the 4Ps encompasses all the modifications (4Cs) and additions (7Ps), they complete rather than compete with each other. Marketing theoreticians may be competing for recognition and position of their theories. They provide us with guidelines, but at the end, it is us the consumers who decide what we will buy into. To summarize the marketing Mix as I see it:

  1. You have a Product. It can be an idea, an item, anything that you want people to buy or buy into. Answer the question: What? What are you offering? In other words. Know your product.
  2. Set the Price. It can be a simple opinion that you want to give out for free, or some expensive commodity. Look at your costs and the costs that others are willing to incur to buy or buy into it. Answer the question: Why? Why are you doing this? Are you aiming to sell it? If the answer is yes then you have to determine a price. If your answer is no, then you probably want to give it out for free.
  3. Decide on a Place. You can offer your product from your house maybe, or be a reseller for a company. You can operate from a shop or via the internet. Answer the question: Where? Where can your potential customer find your product? Make sure you have enough exposure for your product.
  4. Promote your product. Put your product out for the grabs. The means you will use to advertise and the attractive presentation of your product will help in your success. Answer the question: How? How will people know about your product? If your potential customers don’t know that you have something to sell, they won’t contact you to purchase it.

All of this explanation does not have a value if it does not target people. If we did not exist who will be marketing to whom? Who among us can claim understanding all our needs, let alone all our wants? In my next article I will attempt to discuss the importance of the main P, People, in all this mix.

Comments and questions are always welcome.

Place, The Third P Of The Marketing Mix

After the introduction of the first 2 Ps of the Marketing Mix, Product and Price, it is time to go a bit further by discussing the 3rd one, Place. When the 4Cs were introduced, Place became known as Convenience (Convenience to buy). Place is where you want to sell your product. It is often referred to as the distribution channel.

I view the place as where do you want to sell your product. As discussed in earlier articles, your product may be an idea that you want others to buy into, and not only a physical product. Place is in my opinion a more complete description than convenience, It may be a physical place or a virtual one such as the internet. Even physical places can be different. You can be selling from a retail shop or doing business from home by reselling from a warehouse.

Although Convenience may seem to be a better approach as part of the 4Cs, I don’t see it replacing the Place definition of the 4Ps. Place as I understand it is an answer to the question where. Where can I find the product? A well known answer (principle) in sales would state: Location, Location, Location. However, let’s take an example of one US village I lived in. The only grocery shop is found about 2 miles away. In winter, it is a hassle to start the car and head there to buy some drinks for example due to the extreme cold, snow, and ice on the roads. It is definitely not convenient to me, yet it is the only place around when I am not planning to spend hours on a 15 Miles stretch of icy roads to reach the nearest City. Maybe the cost of setting up the business made more sense to the owner because he knew he was the only option for grocery around. He surely did not think of the convenience to the customers knowing that over 95% of the village population lives further than 2 miles away from his shop.

Although a convenient location may attract me, I think of convenience more as facilitation. Convenience to me includes accepting credit cards, checks, facility of payment, delivery, etc… Those do not replace the definition of Place in the Marketing Mix. If you do not have a place to offer your products then you do not have the opportunity to sell, you’re simply not there to be found!

So let’s assume you have a place, whether physical or virtual. It is only then when you can think of offering the convenience to buy for your potential customers. You can mail catalogues, print and post flyers, offer credit facilities, etc… If you are an on line business, you can offer free shipping along with the credit card purchases, have email lists, etc…

As I mentioned in a previous article, to me, 4Ps, 4Cs, and any addition or modification to the 4 Ps, is more of an explanation to the Marketing Mix to be used as a reference rather than being a fixed definition. When the 4Ps was introduced, no one was thinking that the internet would be such a success. Yet, the internet did not cancel those principles.

Place is not only about a physical or virtual address. It is also referred to as distribution channel. You may opt to sell directly via your own shop, or having a series of shops, having a franchise, selling via distributors, etc…  I will not be discussing Sales strategies in this article, but it is important to know that defining your Place in the market needs to take into consideration your product, its price, and the next P of the Marketing Mix, Promotion.

Working in Telecoms, in developing markets, Place was an issue I have to tackle in every project. In earlier days, when we operated as almost a monopoly, in a small city, I didn’t focus much on the place. Mobile telephony was needed to cover the inefficiency and lack of presence of regular phones. People who needed to communicate locally and overseas did not have many options, and there weren’t any alternatives. My only place of operation was a Point of Sale, POS (Became later defined as Point of Service), found in the first floor of our HQ. If someone wanted to have mobile service, they had to include the cost of transportation in their costs. We were practically the only feasible option. In those days, the focus was mainly technical rather than commercial.

Things started to change slowly. Mobile phones didn’t need to be programmed anymore. A new generation that included small chips known as SIM cards (Subscriber Identification Module) were introduced. Prepaid services were starting versus the billed usage (Post-paid), and above all competition was starting as new comers were licensed to operate.

There was a need to find a solution. We were threatened by the presence of competition. Our competitors had their POS in another part of the city offering the same services to our potential customers there, who could now save the trip cost to our HQ. It wasn’t an innovation, it was a simple review of the principles, Place was the solution, back to the Marketing Mix basics. We opened 4 POS around the city and 1 in every major city we had coverage in. The competitor’s response was slow, and we were able to guarantee the major market share.

Things did not stop there, instead of keeping all the revenues we had to concede into offering a share of the pie to a 3rd party, the distributors. We needed to ensure maximum presence in the market and we resorted to spreading our products and services via distributors and their channels. As competition increased adapting our strategy (sometimes with better efficiency) the war of prices started. This policy reduced the revenues for all the operators. The focus was then turned into the reduction of costs to guarantee the positive revenue margin. We started by cancelling the less performing POS, while pushing our dealers towards exclusive sales of our products. It worked in some markets and failed in others where dealers refused to be forced into dealing with one operator.

We had to be more innovative and started applying strategies as franchising while keeping distributorships, among other tactics to guarantee our place in the market while working on reducing costs. We had a simple understanding during all this time, if we did not have a place in the market we would not have a chance to sell. Markets are surely different, as different as the people and their cultures hence the need for market studies (An issue that I will discuss in a future article). However once you have your reference points you can always go back to the basics. You have your product, you determined its price, and you have the place to offer it, now let’s think of promoting it. My next article will cover this point.

Your comments and questions are always welcome!