Continuing the theme of marketing principals online I wanted to talk about the 7p’s model that was originally proposed in the early 50’s by a fellow called Jerome McCarthy. Well he said there were 4ps, price, Product, Place Promotion and that was expanded on in the 80’s by Booms and Bitner to include the people, packaging and positioning.
He stated that when developing your strategy of marketing there were some key concepts that you need to think about and get right to be able to successfully market a product.
I am a believer in always having a strategy for action before starting anything. If you can get that strategy in paper you’re doing really well, and better than I, but, it’s very important when starting anything, especially if there is high risk to you financially or otherwise.
Starting a web store can be a very lucrative venture, however, if you don’t have your strategy and your marketing mix ducks aligned you may shoot and miss, and that could be disastrous!
So I want to take the traditional concepts of marketing but put the into a context that anyone can apply when working online, either with a product or a service based business.
Additionally, these concepts are cross cultural too, while the execution of some elements will change, for example, if you’re selling socks online in Thailand you don’t show the soles of people’s feet, but essentially the principals will apply to any culture.
Price is a pretty standard strategy to selling, either being so cheap as to beat your completion or so expensive you are branding as a prestige product. One element that I feel a lot of sites do seem to forget is that the price you set isn’t the price that people pay. Of the two biggest factors to losing an online sale is trust and shipping. The Shipping cost is the biggest. If I want to buy a t-shirt and its going to cost me as much to get it to my door as it is to just buy it, then you are more than likely going to loose my custom, and I don’t believe that I am alone.
I saw something recently in a video lecture from Dan Ariely, an sociologist and Economist, he spoke about a test that was done with online pricing. That test involved 3 different pricing strategies, the product was a 2.50$ mug and the strategies were like this. One tested the mug on line for 2.50$ and $2.50 for shipping, the second was a mug for 5$ and free shipping and the third was a free mug, but $5 shipping.
All people were paying 5$ for the mug, but they perceived a different price based on what the tag said. What they found was the Free product, even though they are paying the full price at the end sold 45% more than any other option and the 2.50 + 2.50 option was the least attractive of all of them.
What this point is to illustrate is that unlike a conventional store where people go and they pay the tag price, your pricing will almost always include additional costs, so you need to think about the total cost of your product to a consumer, not just the tag.
of course if you are selling a service then this example wont relate that well to you, and I will in another post talk about pricing as a branding tactic, but you can see that what people pay, especially online where price comparisons are every easy to make can be a very big influence of how well you may do.
Needles to say that you have to have a good product. I think that it’s pretty much the core of what you are doing.. selling a product or service so its got to be good. How to you know if it is good or not? I have personally started more projects than I care to remember but one thing I do know, you have to be able to tell yourself that if you have a bad product, that it’s not the fault of the public not knowing it’s as awesome as you think it is, but its a bad idea and that you need to stop and move on.
Some simple steps to seeing if its a good product or not is to do some research on if this product exists in the world and how well is it doing? Are others doing really well on selling it? if so, what makes yours better than theirs? It may be that it hits one of the other P’s really well that that is your difference but, if you cant find the product elsewhere, there are two options; the first one is that no one has ever made this before and you have something special or second, it’s been made and tried and there was just no interest (the second is the one you hope isn’t the case).
So firstly you need to ask other people if they would use your new product, or if they can see others using it. Then you need to talk to a wider audience about it through surveys and questionnaires, would they use it? Don’t be one of those people that thinks that if you talk about your idea before you make it, then someone will steal it. Its not going to happen, trust me, you’re only hurting yourself though not doing any research.
Another really good option is to see if you can crowdfund the startup, even if you don’t need the money, you can gauge the reaction of the public and how well it may do, but the interest you get in the campaign. Of course there are many factors to take into account when it comes to crowd funding, but its a supreme way to know if the public will like what you are trying to sell.
I live in Thailand and I don’t really do much shopping online as there are a lot of import taxes and customs charges added on, and of course, I don t have much faith in the postal system here, however, that doesn’t stop me totally.
Being able to sell to a specific geographic area can have a major influence on the success of your store. An example is that when I make an online purchase of computer parts, for instance; I will use a site called Lazada, as they specialise in delivering to my geographic location, where in Australia I would use Ebay or Amazon without a second thought.
It’s a simple premise really, be where your customers are and make it easy for them to get the product. An offline example of this is the now famous marketing campaign of Old Spice body wash. This campaign was a global sensation, and I must say a brilliant piece of creative, however, it was totally lost because when I went to the store to buy some, I couldn’t ever find it.
They just weren’t in the right places, and they lost. I’m sure many millions in revenue because their distribution was flawed in that respect. I’m not sure they know that the campaign would go as well as it did, and I know that their sales did increase because of it, but their sales increased in their current market.
If you can only service your local area then don’t market to areas beyond that service ability, however, if you are global, also take into account that there are going to be factors to where you can deliver effectively.
Also, if you can be where your competitors are not, then you have a fantastic opportunity for domination of a market, take Lazada for example, they know that Ebay and Amazon don’t service my region well, and they have made a fortune specialising at being where their competitors aren’t. Imagine if you have an entire shelf in an isle at the local market, you’re going to do very well, so look at how you can apply that same tactic online as well.
This is the nuts and bolts of marketing really, how are you going to get people to notice your business and come to your store? You may have built the most amazing, user friendly website in the world but if you don’t get any visitors then you’re just not going to get any sales. I have spoken at length about how to drive traffic to your site, with Paid marketing, Social media, Content marketing and email marketing, so I wont go into detail, but, Promotion is the essential part of you campaign, getting the people in the store.
When you have defined all your different P’s you can start to build the campaign around your values and your differences, then you can construct and execute a campaign that will bring the right customer into the store.
I would suggest that if you are building a marketing strategy based on the 7p’s then you should do this last, as you can take all the elements that you have, be it location of your service or the quality of your after sales service that is your difference and then market to that strength.
I have seen this again and again, that people will build a site, stock it with product but then totally fail when it comes to the customer service, side of it. Recently a customer asked me to install a live chat service on their site, which I think is a fantastic idea, as it gives customers an instant connection to your business, however, internally they totally forgot to manage the operations of it and 90% of the time it stays unmanned and messages just go through to email.
Exceptional customer service can play a big part in your success online, as an example; Hostgtor, some time ago, used to have a very good and responsive service, you could go online and within 2 min be talking to an operator and they would solve your problem in a super professional way. Then they were sold and their customer service went down hill, it took almost 30 min to connect on their live chat and because of that, I and many people I know stopped using them.
The people in your business are just as important as the product itself. Can you deliver the best experience you can for your customers? Is it something that your customers will tell all their friends and associates about? If its not then you need to work on making it so.
Traditionally, the packaging of a product was about shelf appeal, making your product stand out from the sea of other competing products, but online, does it still have the same effect? I think that it is loosing its relevance now, as if you are shopping online you are potentially evaluating a product on other factors, rather than how much it stands out.
After delivering, first impressions count, so there may be an impact on repeat purchase if your product isn’t very pretty, or if the bottle that it comes in is badly made or it falls apart, however, the quality of the package will have some effect on the purchase.
I’m not just talking about the box that it comes in, I am talking about the shape of the bottle, like skull vodka that actor Dan Ackroyd created or the colors or names you give the soda like Coke zero or Diet coke. It can be the same product on the inside as the rest of your competition, or even your other lines, however, the way that you wrap it up can effect the perception of the product before the purchase is made.
If I use the coke example, Diet coke was traditionally purchased by women as it conveyed the idea that it was some what less fattening than other coke products, but they were losing 50% of the market as it didn’t appeal to them as much. So Coke introduces a new package for it, makes the can black and calls it Coke zero and it’s an instant hit with the male market.
Same product, but different packaging.
Lastly I want to talk about positioning. This doesn’t mean where you put your product on the page of a site, although that can also have a conversion difference that I won’t go into now, but I am talking about the place that a product sits in a persons mind.
If you think about Rolex, Vercaci suits or Rolls Royce, you instantly think of a super high quality, luxury brand that people aspire to owning. And if I talk about Ebay or Amazon, you think of discounts, bargains and low prices.
Everything has a position in your mind, that you give a level of value to and as a marketer it is your job to develop that position through your execution of these P’s outlined above. Is your brand high quality and luxury? then it’s priced high, is available only in exclusive areas and has exceptional customer service.
If your brand is about value, then its available everywhere, low prices and people will not expect much after sales service.
If you are creating a marketing strategy you need to take these 7 P’s and put together a plan that addresses all these elements and how you are going to execute the campaigns. Then with this strategy in place you can go online and dominate what ever market that you want to.