Marketing Tools
Understanding Your Marketing Tools
There are many ways to market your products and services. Here is the most used marketing mix that can be applied:
7Ps of Marketing Mix
1. Physical
Identify how the business premise looks and location to attract customers
2. Process
Identify the best methods for producing/delivering service with minimal cost
3. People
Identify the right people to deal with customers
4. Place
Identify the right location for the product to be placed to make customers find it easier to shop
5. Promotion
Identify the right time and the type of marketing and media channel
6. Product
Identify how the product can appeal to customers- colours, size, design etc
7. Price
Identify the product value to customers
1. Price
i) Cost-Plus Pricing
Most entrepreneurs rely on cost-plus pricing as a fundamental approach to setting prices. This method ensures that the “plus” figure not only covers all overhead costs but also generates the desired percentage of profit. However, if your overhead calculations are inaccurate, you risk setting prices that result in profits being too low or even incurring losses.
To better understand how cost-plus pricing works, consider the following sample calculation:
| Cost of material | RM 50.00 |
| + Cost of labor | RM 30.00 |
| + Overhead | RM 40.00 |
| = Total cost of the product | RM 120.00 |
| + Desired profit (30% on sales) | RM 51.00 |
| = Required sales price | RM 171.00 |
ii) Demand Pricing
Demand pricing is established by balancing volume and profit. This approach involves setting different prices for products based on demand across various sales channels. For instance, products may be priced differently for retailers, discount chains, wholesalers, or direct online marketers. Typically, larger quantities purchased result in a lower unit price, incentivizing bulk buying and catering to the specific demand dynamics of each channel.
| Retail price 1 unit | RM 170 |
| Online price | RM 160 |
| Wholesale price | RM 150 |
iii) Competitive Pricing
Competitive pricing is applied when a market price for a specific product or service is already established. Typically, the market leader sets this standard, and smaller companies in the same industry often align with it. However, you can strategically set your price slightly higher if you offer additional services or value that differentiates your product or service, allowing it to remain competitive within the market.
| Market price | RM 160 |
| Your price include delivery | RM 170 |
iv) Markup Pricing
Markup pricing involves adding a predetermined amount or percentage to the cost of a product to determine its selling price. This method ensures that the final price charged to customers covers costs and provides a desired profit margin. Markup pricing is commonly employed by manufacturers, wholesalers, and retailers due to its simplicity and effectiveness in achieving consistent profitability.
| Cost of the product | RM 120 |
| Your selling price | RM 180 |
| The markup would be | RM 60 |
Notes:
Every product or service should be priced to ensure it covers production or wholesale costs, transportation fees, overhead or operating expenses, and includes a reasonable profit margin. Understanding pricing structures, particularly the distinction between margin and markup, is crucial in developing an effective pricing strategy.
Additionally, various factors such as high overhead costs, shoplifting, theft, fluctuations in raw material prices, or applied discounts can significantly impact the final pricing. It’s essential to regularly evaluate these elements to maintain profitability and competitiveness.
2. Product
To ensure your product or service stands out, it must be compelling and attractive enough for both existing and potential customers to notice and recognize its value. To achieve this, differentiate your offering from competitors by focusing on the following:
i) Packaging
Packaging plays a vital role in a product’s overall appeal and functionality. Its primary purpose is to protect the finished goods from damage during handling, storage, and sales distribution. In addition to protection, effective packaging can enhance the product’s marketability. A well-designed package typically includes the following elements:
- Durability:
Ensures the product remains intact and safe during transit and handling. - Aesthetic Appeal:
Captures attention with attractive designs, colors, and graphics that resonate with the target audience. - Brand Identity:
Clearly communicates the brand’s logo, name, and messaging to strengthen recognition. - Functionality:
Makes the product easy to use, open, and store for consumers. - Informative Labeling:
Provides essential details such as ingredients, instructions, expiration dates, and safety warnings. - Eco-Friendliness:
Utilizes sustainable materials to appeal to environmentally conscious consumers. - Differentiation:
Stands out from competitors by offering unique and innovative packaging features.
By focusing on these elements, packaging not only serves its practical purposes but also becomes a strategic tool to attract and retain customers.
ii) Labelling
A label is a crucial element of packaging that provides a detailed description of the product and its manufacturer. It includes essential information such as the product name, usage instructions, and other relevant details in written form, often accompanied by a graphic design to enhance visual appeal.
To meet legal and regulatory requirements, product labeling should include:
- Product Name:
Clearly state the name of the product to identify it easily. - Manufacturer Information:
Include the name and address of the manufacturer, distributor, or importer. - Usage Instructions:
Provide clear and concise guidelines on how to use the product effectively and safely. - Ingredients/Contents:
List all ingredients or materials used, especially for consumables or chemical products. - Warnings and Precautions:
Highlight any potential risks, allergens, or safety precautions related to the product. - Net Weight/Volume:
State the exact quantity of the product in metric measurements (e.g., grams, liters). - Manufacturing and Expiry Dates:
Ensure visibility of the production and expiration dates for perishables or time-sensitive products. - Certifications and Standards:
Display certifications, approvals, or compliance marks (e.g., Halal, ISO standards) where applicable. - Barcode/QR Code:
Provide a scannable code for inventory tracking or additional product information. - Legal Disclaimers:
Add any disclaimers required under local laws, such as liability limitations or country of origin.
Effective labeling not only fulfills legal obligations but also builds consumer trust by offering transparency and clear communication about the product.
iii) Promotion
| Aspect | Promotion | Advertising |
| Definition | Activities aimed at increasing customer awareness, driving sales, and fostering brand loyalty. | A one-way communication method to inform potential customers about products or services. |
| Purpose | To generate immediate customer engagement, sales, and loyalty. | To create awareness, inform, and persuade customers to purchase products or services. |
| Nature | Includes both short-term and long-term strategies. | Typically a long-term approach to build brand recognition and trust. |
| Scope | Broader scope, involving multiple activities like sales promotions, public relations, and events. | Narrower focus on paid media and specific messaging campaigns. |
| Cost | Can be cost-effective; includes free or low-cost methods like social media promotions or events. | Often involves significant investment in media (e.g., TV, print, digital ads). |
| Interaction | Two-way interaction is possible, such as through contests, live events, or social media engagement. | Generally one-way communication with limited immediate feedback from the audience. |
| Examples | Discounts, contests, free samples, trade shows, public relations campaigns, and digital promotions. | TV commercials, radio ads, print ads, digital banners, and sponsored social media posts. |
| Objective | To encourage action, such as making a purchase, joining an event, or subscribing to a service. | To inform and persuade potential customers to consider or buy a product or service. |
| Flexibility | Highly flexible and can be tailored to specific audiences or occasions. | Less flexible due to high production and media placement costs. |
| Timeframe | Can produce immediate results (e.g., flash sales) or build brand loyalty over time. | Typically builds brand visibility and recognition over a longer period. |
| Aspect | Promotion | Advertising |
| Definition | Activities aimed at increasing customer awareness, driving sales, and fostering brand loyalty. | A one-way communication method to inform potential customers about products or services. |
| Purpose | To generate immediate customer engagement, sales, and loyalty. | To create awareness, inform, and persuade customers to purchase products or services. |
| Nature | Includes both short-term and long-term strategies. | Typically a long-term approach to build brand recognition and trust. |
| Scope | Broader scope, involving multiple activities like sales promotions, public relations, and events. | Narrower focus on paid media and specific messaging campaigns. |
| Cost | Can be cost-effective; includes free or low-cost methods like social media promotions or events. | Often involves significant investment in media (e.g., TV, print, digital ads). |
| Interaction | Two-way interaction is possible, such as through contests, live events, or social media engagement. | Generally one-way communication with limited immediate feedback from the audience. |
| Examples | Discounts, contests, free samples, trade shows, public relations campaigns, and digital promotions. | TV commercials, radio ads, print ads, digital banners, and sponsored social media posts. |
| Objective | To encourage action, such as making a purchase, joining an event, or subscribing to a service. | To inform and persuade potential customers to consider or buy a product or service. |
| Flexibility | Highly flexible and can be tailored to specific audiences or occasions. | Less flexible due to high production and media placement costs. |
| Timeframe | Can produce immediate results (e.g., flash sales) or build brand loyalty over time. | Typically builds brand visibility and recognition over a longer period. |
Promoting your brand to the public is a significant challenge and a crucial step in building a successful business. Promotion encompasses a range of activities designed to increase customer awareness of a product or brand, drive sales, and foster brand loyalty.
One of the key strategies within promotion is advertising. Advertising serves as a one-way communication channel aimed at informing potential customers about your products or services. It highlights the unique features, benefits, and availability of what you offer, making it easier for customers to understand how to access your brand.
An effective promotion strategy combines advertising with other methods such as public relations, sales promotions, and digital marketing to create a comprehensive approach that reaches your target audience and builds long-term customer relationships.
Outbox Marketing
Outbox marketing is a positive marketing technique against your competitor and market trends. You need to be creative and innovative in creating a new style or concept of how to market your product due to drastic change in media technology and social media.
An excuse from customer not to buy your product is always a risk.Have ideas to make yours more favourable with value-added marketing concepts such as
a) A creative packaging
b) Parody marketing campaign
c) A pre order sales with a gift
d) A combo set for your product
Make an appointment with Company Secretary or Our Lawyer for advice and consultation
iv) Place
| Feature | Direct Channel | Indirect Channel |
| Definition | Products or services are sold directly from the business to the customer without intermediaries. | Products or services are sold through intermediaries like wholesalers, retailers, or agents. |
| Examples | – E-commerce websites – Company-owned stores – Subscription services | – Retailers (e.g., supermarkets) – Online marketplaces (e.g., Amazon) – Distributors or wholesalers |
| Control | Full control over branding, pricing, and customer interactions. | Limited control; intermediaries influence branding, pricing, and customer interactions. |
| Customer Relationship | Strong direct relationships with customers. | Indirect interaction, managed by intermediaries. |
| Profit Margins | Higher, as there are no intermediary fees. | Lower, due to commissions or markups by intermediaries. |
| Cost | Higher operational costs (e.g., logistics, infrastructure, customer service). | Lower initial investment but intermediary fees reduce overall margins. |
| Reach | Limited to the business’s resources and market presence. | Wider reach, leveraging the networks of intermediaries. |
| Speed to Market | Slower, depending on the company’s internal capabilities. | Faster, as intermediaries have established channels and networks. |
| Scalability | More challenging to scale without significant resource investment. | Easier to scale quickly through established intermediary networks. |
| Suitability | Ideal for specialized, high-value, or niche products requiring personal engagement. | Suitable for mass-market products that require broad availability. |
| Feature | Direct Channel | Indirect Channel |
| Definition | Products or services are sold directly from the business to the customer without intermediaries. | Products or services are sold through intermediaries like wholesalers, retailers, or agents. |
| Examples | – E-commerce websites – Company-owned stores – Subscription services | – Retailers (e.g., supermarkets) – Online marketplaces (e.g., Amazon) – Distributors or wholesalers |
| Control | Full control over branding, pricing, and customer interactions. | Limited control; intermediaries influence branding, pricing, and customer interactions. |
| Customer Relationship | Strong direct relationships with customers. | Indirect interaction, managed by intermediaries. |
| Profit Margins | Higher, as there are no intermediary fees. | Lower, due to commissions or markups by intermediaries. |
| Cost | Higher operational costs (e.g., logistics, infrastructure, customer service). | Lower initial investment but intermediary fees reduce overall margins. |
| Reach | Limited to the business’s resources and market presence. | Wider reach, leveraging the networks of intermediaries. |
| Speed to Market | Slower, depending on the company’s internal capabilities. | Faster, as intermediaries have established channels and networks. |
| Scalability | More challenging to scale without significant resource investment. | Easier to scale quickly through established intermediary networks. |
| Suitability | Ideal for specialized, high-value, or niche products requiring personal engagement. | Suitable for mass-market products that require broad availability. |
“Place” refers to the process of delivering your product or service from you, the producer, to the end-user or customer. This involves identifying the most effective location and method to sell your product or service.
The distribution method can be direct, where you interact with the customer directly, or through a combination of intermediary channels such as agents, distributors, wholesalers, or retailers.
Alternatively, you can leverage online marketplaces to sell your product or service directly to your target customers.
Key Points:
- Using the right place ensures your product or service reaches the right user at the right time.
- This strategy helps access a bigger market, leading to increased sales and maximized profit.
- Choosing between direct methods or intermediaries depends on your business model, resources, and customer needs.
By strategically selecting the place, businesses can enhance customer satisfaction and ensure seamless product delivery, ultimately contributing to long-term success.
Good To Know
Price Paid by Customers:
The final price includes the cost price borne by the seller, which accounts for production costs and any intermediary expenses.
Push Strategy:
A strategy where the producer actively promotes the product or service to customers through marketing efforts, direct selling, or intermediary channels.
Pull Strategy:
Customers are drawn to the product or service themselves, driven by the strong branding and reputation of the product.
Digital Marketing in the Modern Era
In today’s fast-paced digital era, conventional marketing methods are becoming less effective in reaching a wider audience. To stay competitive, businesses must embrace digital marketing—a strategic approach to promoting products or services via electronic media and applications. Digital marketing enhances the exchange of information with customers and helps entrepreneurs build and maintain long-term relationships.
Compared to traditional methods, digital marketing is more cost-effective, measurable, and targeted, shortening the selling cycle and delivering greater convenience. Its primary goal is to generate sales by capturing leads from online users.
To establish a digital marketing network, businesses can start by creating an email address integrated with various online tools and platforms, such as:
- Google Places for local business visibility
- Weblogs to share insights and updates
- Social Media for audience engagement
- Online Classifieds for targeted advertising
- Specialized Portals to connect with niche audiences
- Photo Marketing to enhance visual appeal
- Location-Based Platforms like Foursquare for local targeting
- Websites to serve as the central hub for online presence
By adopting these tools, businesses can tap into the vast potential of digital marketing, ensuring greater reach and engagement in the modern marketplace.
Strategy for Digital Marketing
To stimulate consumer interest in your product or service, you need a well-thought-out action plan leveraging online marketing networks as tools. By tapping into these networks, businesses can boost visibility, engage target audiences, and drive conversions.
Here are some digital marketing strategies to consider for your business:
- Search Engine Optimization (SEO): Improve your website’s visibility on search engines.
- Content Marketing: Create valuable, relevant content to attract customers.
- Social Media Marketing: Engage with audiences on platforms like Facebook, Instagram, or LinkedIn.
- Email Marketing: Send targeted campaigns to nurture customer relationships.
- Pay-Per-Click Advertising (PPC): Use ads to generate immediate traffic.
- Affiliate Marketing: Partner with affiliates to promote your products.
- Influencer Marketing: Collaborate with influencers for better reach.
To boost consumer interest in your products or services, develop an action plan utilizing online marketing tools like SEO, social media, email campaigns, and PPC ads. Strategies include improving website visibility, creating engaging content, leveraging social platforms, and collaborating with influencers or affiliates. These approaches can help increase visibility, strengthen customer relationships, and drive growth effectively.
v) People
To attract and retain customers, it is absolutely essential for your employees to establish trust and confidence in your product or service. This can be achieved through comprehensive training programs that not only educate staff about the intricacies of the products or services offered but also instill in them a deep understanding of the company’s core values, mission, and overall objectives. When employees are well-versed in these aspects, they are better equipped to market and promote your offerings in a way that resonates with potential customers.
Furthermore, fostering a customer-centric culture within the organization is paramount. By prioritizing customer satisfaction and ensuring that every interaction is positive, businesses can cultivate a loyal customer base. Customers who have a positive experience using your product or service are more likely to become repeat customers and, importantly, they are also more inclined to recommend your business to their friends, family, and colleagues through word-of-mouth marketing. This organic form of promotion is incredibly valuable as it leverages the trust and credibility that exists between individuals.
The synergy between competent, knowledgeable employees and positive customer experiences creates a powerful engine for growth. As customer satisfaction increases and word-of-mouth referrals spread, businesses will naturally experience expansion and, consequently, increased profitability. Investing in employee development and customer service initiatives is not simply an expense; it is a strategic investment that yields substantial returns in the long run. In today’s competitive marketplace, where countless options are available to consumers, prioritizing these aspects can differentiate a business from its competitors and position it for sustained success.
vi) Process
Processes play a crucial role in establishing an effective and efficient system for delivering products or services. By implementing well-defined processes, businesses can ensure consistency, improve productivity, and achieve desired outcomes, such as increased sales or enhanced customer satisfaction.
These processes encompass various functions within an organization, ranging from core production activities to customer support and complaint resolution.
A practical illustration of a process is the implementation of Standard Operating Procedures (SOPs). SOPs provide step-by-step instructions or manuals that guide employees on how to perform specific tasks related to product or service delivery. By adhering to SOPs, businesses can standardize operations, minimize errors, and maintain quality control.
Furthermore, processes can be designed to optimize resource allocation, streamline workflows, and identify areas for improvement. By continuously monitoring and refining processes, businesses can adapt to changing market conditions, enhance operational efficiency, and stay ahead of the competition.
vi) Physical
The physical environment of your business plays a crucial role in attracting and retaining customers. For instance, a retail store with a spacious layout that allows customers to move around comfortably with their shopping carts can significantly enhance their shopping experience. Similarly, a restaurant with a pleasant ambiance, including appropriate background music and comfortable seating, can create a cozy and inviting dining experience.
Another aspect of the physical environment is the use of a name, symbol, or logo for branding purposes. A memorable and relatable name or logo can distinguish your business from competitors and leave a lasting impression on customers. For example, a well-designed logo displayed prominently on the business premises, website, or packaging materials can reinforce brand identity and increase brand awareness.
Furthermore, other elements of the physical environment can contribute to a positive customer experience. These include factors such as cleanliness, lighting, temperature, and overall aesthetics. A clean and well-maintained environment conveys professionalism and attention to detail, while appropriate lighting and temperature can create a comfortable and inviting atmosphere. The overall aesthetic appeal of the physical environment, including the choice of colors, materials, and décor, can also influence customer perceptions and contribute to a positive brand image.
In addition to the physical environment, the location of your business can also be a significant factor in attracting customers. A convenient and accessible location with ample parking facilities can make it easier for customers to visit your business. Moreover, the surrounding environment, including the presence of other businesses, amenities, and transportation options, can also influence customer perceptions and affect their decision to visit your business.
Therefore, it is essential to consider all aspects of the physical environment, including the layout, ambiance, branding, cleanliness, lighting, temperature, aesthetics, location, and surrounding environment, to create a positive and memorable customer experience. By paying attention to these details, businesses can differentiate themselves from competitors, attract and retain customers, and ultimately achieve long-term success.
Make an appointment with Company Secretary or Our Lawyer for advice and consultation