Paul Woods

Marketing 101 – The Four P’s – Product, Price, Place and Promotion.  Traditionally the four strings a marketer can pull to convince the consumer (rightly or wrongly) that the product or service is worthy of their hard earned money.

Most people outside of Marketing simply think that more promotion, or cheaper prices is the answer.  Sure, they can make an impact in some instances.  But they are expensive in relation to the return on investment.  They should really be combined with a strong Product and Distribution (place) strategy to leverage the investment to the max.

A great way to explain this is by sharing a great example I saw the other day of an organisation using “Product” (accompanied with some facets of the other P’s) to drive revenue growth. 

At most supermarkets, margins are very tight.  Every couple of cents you can make out of a product (in the long term, across multiple stores) can add up to quite a bit of money.  In fruit and vegetables, we get the added complexity of shorter shelf lives, and fragility of the product itself.

At my local supermarket the other day, I was looking to purchase some Pink Lady apples.  I had two choices, the tray of apples from which I could pick my own, or a nicely pre-packaged group of four apples.  The packaging in this instance was simply a standard foam tray, with some plastic film over the top.  Nothing too out of this world, but boy did it make those apples look ten times better!

Hand picked apples = ~$3.50/kg

Pre packaged apples = $3.95 per pack (about 500g) = ~$7.90/kg

WOW… that’s roughly about a 120% price increase, with next to no cost (especially considering the quantities of foam trays and plastic film that supermarkets go through).  And after stalking other shoppers at the supermarket for about 20 minutes, the pre-packaged apples were moving about twice as fast as the regular ones.

Not only did the apples look better, they also didn’t have the markings that fruit normally gets after being handled by multiple shoppers looking for the perfect apple.

That is a great example of how to use Product from the four P’s to change consumers behaviours… but can we use Product to change the behaviours of other consumers, in industries such as high technology?

Yep… just look at Apple.  Damn, did they get the strategy right on the iPod.  Apple are famous for making design (usability, visual identity etc) one of the priorities for all their products.  By focusing on design (which is basically the packaging of a pretty stock standard MP3 player, just like the foam tray and plastic film which was the packaging for some pretty stock standard apples), Apple created a product that people could build a emotional relationship with.  It became the techno fashion accessory for the first half of this decade.

For all you software developers out there who do not want to be offshored to India… functionality isn’t everything.  Focus on design, the user ‘Experience’ to add value to your products.  There are so many more ways to compete other than price.

Technorati Tags: Apple, iPod, Product, Kotler