Marketing 101: The 4 P’s, or “Marketing is More Than Just Sales and Advertising!”

Product, Price, Promotion and Place.

Those four words are all you need to know if you want to start thinking about how to market your product. These words are used so commonly in the marketing world that there’s even a nebulous term for them – product mix. They’re also commonly known as “the 4 P’s.”

Sounds simple, doesn’t it? With these four words, anyone can develop a solid marketing plan. And the good news is that it is simple. But there’s some bad news too – developing a marketing plan is a lot of work, and the amount of planning and research required can be agonizing for those who like to run their businesses based on intuition. Having a well-developed marketing plan usually means you know your customers, and your product reflects it. Lacking a marketing plan is usually the first sign that your company is doomed to fail.

Before I get into the four P’s, let me touch briefly on the difference between sales and marketing, because these words are often used interchangeably when they should not be.

• A salesperson is someone who has an existing product, service or idea and who wants to exchange it with a consumer for some form of payment. Salespeople are usually out on the front lines of the business, dealing with the customers directly. Sales are a part of marketing (they relate to promotion), and they are one of the most visible marketing activities. But sales are also very narrow in scope, and they do not concern the overall relationship with the customer, which is one of the chief aims of marketing.Companies that focus on making sales are not engaging in marketing tactics; they’re engaging in sales tactics. And while some professions may have the word “marketing” attached to them (like “Marketing Sales Associate” or “Telemarketing Representative”), they are really just jobs with fancy titles that are trying to downplay the stigma of sales stereotypes.And speaking of stereotypes, salespeople are usually looked down upon by consumers because it is their job to facilitate transactions. Salespeople get a reputation for being callous or even dishonest to customers so that they can fill their quotas. But selling is a skill, not a job, and salespeople who have to rely on tricks to complete their sales give the rest of the profession a bad name.
• A marketing professional (or marketer) is someone who assists in the development of products or services at all stages. Marketers are not salespeople, and many rarely directly interact with customers. The proper role of a marketing person within an organization is to help research and isolate target markets, to help develop products for that target market, to determine the price for those products, and then to oversee all aspects of sales, promotion, advertising, and distribution.Does that sound like an executive style position? It is! Marketers are not the people who sit around and think up ad campaigns or call to interrupt your dinner with an offer from a credit card company. They are managers and researchers, usually well educated, and often destined to become VPs and CEOs as their careers advance. They are the people who listen to what customers want from their products, and then try to find ways to fill those requests.Marketers are not advertisers; in fact, the two professions are often at odds with each other because advertisers often craft messages that can be deceptive and misleading, while marketers are concerned with building customer trust and loyalty. As with sales, advertising is a part of marketing (once again, related to promotion), but it is only a small piece of the overall process.

Understanding the difference between sales and marketing is crucial to grasping the concepts I’m about to outline. When I talk about how a publisher can market a book, one thing I do not want readers to take away is the idea that I’m talking about selling strategies. I will cover selling strategies in another article, and I’ll make sure that I define them as such so that there’s no confusion. The purpose of this article, however, is to help would-be publishers understand that marketing begins before a product is even started.

“What?” you might be asked. “How can you market something before it exists?” I was confused by this too when I began studying marketing. After all, in my experience, most companies develop products before they start worrying about marketing them, especially in a creative industry like publishing. I know that when I come up with an idea, it’s generally not because I’m thinking about how I can best meet the entertainment needs of suburban middle-class males, aged 12-25!

But the first question anyone asks in business when presented with a new idea is, “who’s going to buy this?” Or, to amend that, it’s the first question anyone in business should ask. Certainly there are many companies out there who develop products without any clue as to who would want them; these are the same companies who often wind up having to liquidate a bunch of junk that nobody wants through aggressive sales tactics. But we’ll get to that in a moment.

Whether an idea is developed from discovering a need and finding a way to fill it, from a research and design process, or from the creative depths of someone’s imagination, few will move forward to turn that idea into a product without first asking themselves who the idea will serve. Generally, they even share the idea with a few trusted friends to see if it’s any good. If they decide to move ahead with the idea, they will often create a prototype or write a business plan so they can find investors to help shoulder the costs of production. And that is the first step of marketing: designing the product.

The next “P” is price, and while this might sound like the shortest step, it can actually be one of the longest. In the business world, the price of a product is not some arbitrary decision that is made by intuition – or, at least, it shouldn’t be. Price is set by examining a variety of criteria, including:

• Supply and demand
• Marginal Cost vs Marginal Revenue
• Break-even analysis
• Competition pricing
• Market standards
• Consumer feedback

In the comic book industry, what separates a $2.99 book (the current comic book industry standard) from a $3.99 book? Often, it’s the number of pages, but sometimes it’s not so clear cut. Sometimes, it’s because the $3.99 book is a premium product with interior artwork by an expensive illustrator. Sometimes, it’s because the book has limited appeal and it has to sell for $3.99 to make up for the fact that it won’t sell a lot of copies. Sometimes, it’s because the publisher is operating high overhead or production expenses and can’t break even on a $2.99 book. And sometimes, it’s because the publisher is just plain greedy and believes that price won’t affect sales in a significant way.

For that matter, what’s the difference between a $2.99 book and a $2.95 book? Why does Wal-Mart often set prices at points like $2.87 instead? All of these concerns come from developing a pricing strategy, and all of them require a lot of thought since the revenues and profits the product will eventually generate will be heavily influenced by the price.

Another area of pricing comes in setting the discount that a publisher offers to retailers, distributors and wholesalers. A book with a 35% discount will sell fewer copies than a book of the same price with a 50% discount unless there is a demonstrable demand for the 35% title. Likewise, a book that is offered as returnable (the publishing industry standard) will sell many more copies than a book that is offered as non-returnable because more retailers will be willing to take a chance on it.

Once a price is set, a product still needs a good distribution plan, which is why the third “P” is place. Believe it or not, poor distribution is one of the primary reasons that new products fail. Even a product that is desired, but not available, cannot sell, no matter how high the demand for it is. This is actually a common problem in the publishing industry, where small print runs of unexpectedly popular titles can cause a publisher to undersupply the demand. But once the publisher ramps up production, many consumers have already lost interest or found a substitute product to fill their need.

As I mentioned in the previous article, the best way to get a book out to the masses is to employ the services of a distributor or a wholesaler. But this is not always a good solution for a small publisher, since it requires the publisher to print its product up front and wait 3-6 months for payment. Fortunately, the Internet is the friend of small business and, and it allows even the most niche of publishers to find interested consumers if they promote their product properly. In the past, a small publisher might take pre-orders on each printing and force readers to wait until enough orders were placed to justify a printing. But now, publishers can use printing on demand services like Ingram’s Lightning Source to print exactly what they need, when they need it. By simply making a title available through an official website and online booksellers like Amazon.com and printing on demand, publishers can minimize worries about distribution.

But in order to ensure that the product sells, the publisher must be willing to do what it takes to accomplish the fourth “P”, promotion. As I noted at the beginning of the article, promotion is the field that most people associate with marketing because it is the most visible aspect of it. But promotion should be the final phase of the marketing process, conducted only when the product is available or about to be available. It’s actually surprising how few people in business understand this and waste a lot of their time and money promoting products instead of focusing refining them.

Promotional marketing includes many activities, including:

• Advertising
• Viral Marketing
• Direct Mail
• Rebates/Coupons
• Media coverage / tie-ins
• Websites
• Trade show / consumer expo appearances
• Press junkets
• Special events

And that’s just a small sampling. The area is far too rich for me to cover in this survey, so I will cover the process of promotion in much more detail in my next several articles. The first will focus on why advertising is a waste of money. The second will offer a general plan for how a small publisher can promote a new title on a shoestring budget and still generate plenty of buzz. Beyond that, I’ll talk about how a publisher can promote a book by working with the media. They’ll all be great. Don’t miss ‘em!

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