Psst!...Have you Heard the Buzz?
Marketing and Promotion
Understanding the Difference Between Marketing and Promotion
Copyright © Stone Evans, The Home Biz Guy
Are you an online marketer? Or do you simply promote affiliate
programs? Marketing is truly the most misunderstood word in use
today on the Internet. Let me see if I can clarify this issue just a
bit.
In Marketing 101 at your local university, marketing is actually the
process of Product, Place, Price and Promotion.
PRODUCT
No business can exist without a product or service to sell.
In a nutshell, entrepreneurs are the people who believe in a
product, service or idea, so much that they are willing to invest
their lives into the development of their dream.
Historically, every major corporation in the world was started by an
entrepreneur with a dream and the drive to make it a reality.
However, there comes a time in the life of every corporation when
those who fear the gambling nature of their founder, squash the
entrepreneurial drive that made the company a viable concern in the
first place. The entrepreneur will either submit to the careful
nature of the stockholders, or he will be forced to leave the
company he created.
The only entrepreneurs who withstand the pressure to move more
carefully are those who have maintained majority control over their
companies.
PLACE
In the offline world, place is defined by location. On the Internet,
place is defined by domain name and the web hosting service chosen.
Both online and offline, place can make or break a company without
respect to the quality and value of the product, service or idea.
PRICE
Selecting a price is determined first on a basis of whether the
company wants to be seen as a discount or a value company.
Take for example Wal-Mart and Staples.
Wal-Mart is the lead discounter in the marketplace. Staples on the
other hand is the specialist in office supplies.
Both sell a significant number of office supplies despite the fact
that the lowest price can usually be found at Wal-Mart. As a value
dealer, Staples can afford to charge more for their products than
Wal-Mart.
So the question for you is whether you want to position your company
as a discount or value company.
Testing has shown that products and services can be sold at any
number of prices and still reach a significant number of people.
The challenge of selecting the best price for your product or
service will require a certain amount of testing.
UNDERSTANDING THE PRICING EQUATION
Let’s assume we are selling a product. Let us also assume that we
know that the product can be sold for $10 or $50. Let us also assume
that if the price dips below $10 or rises above $50, then the
product sales fall off significantly.
Our challenge is to determine the best rate at which to sell our
product.
Testing has shown us that we can sell 1000 items a week at $10.
Testing has also shown that we can sell 500 items per week at $50.
And testing has shown that we can sell 650 items per week at $45.
At $10, our projected weekly earnings are $10,000. When we sell the
product at $50, we know that we can earn $25,000 per week. Most
importantly, we know that we can earn $29,250 when our product is
priced at $45.
With the imaginary testing we have done on our imaginary product, we
can easily see that selling our product at $45 per item will earn us
more money over the long haul.
Thus, when we make the decision for a national rollout of our
product, then we will price our product at $45.
Of course, this is a very simplistic analysis of the point I am
trying to make. Though simple, I believe this analogy will help you
understand the methods of developing a product’s prices.
PROMOTION
Promotion, on the other hand, is the process of notifying the
consumers for your product or service of your availability to serve
them.
Methods of promotion vary distinctly and should be arranged to meet
very specific goals.
As with product, place and price, promotion should not be left to
chance. You should test every ad, every media, and every price point
to determine the best bang for your promotional dollars.
HEADS UP!
If you are an online promoter or marketer, please factor in the most
important element concerning the cost of your promotions.
What element is that? Your time!
Value your time at a certain dollar amount, and figure in your time
into the cost of your promotional accounting.
I say this because too many online promoters lose sight of this
concept and spend 20 hours to generate one sale while using free
advertising. Even if you rate your time at the federal minimum wage,
then you will have invested $105 of your time for one sale that
might only net you a gross sale of $45!
ARE YOU TRULY A MARKETER OR ARE YOU JUST A PROMOTER?
Most people who run a business on the Internet call themselves
marketers. Yet, most of these same people are really just promoters
wrapped in the label of a marketer.
True marketers do not promote without a lot of advance work. They
spend time planning, testing and measuring their actions and results
to get the most out of every dollar spent and earned.
Entrepreneurs finesse the art of marketing as they build their
company into a major enterprise.
If you are a promoter who does not keep an eye on the total
marketing equation, then you are bound to fail.
If you do call yourself a marketer, then do what a professional
marketer does. Make sure that every dollar spent is spent well. Make
sure that every dollar earned is put to good use. Market well so
that when the people of the next generation look at your life, they
will see a fine example of a successful entrepreneur that they will
strive to emulate.
