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Archive for December, 2006

Place (or Position)

December 21st, 2006

This is the third in a series of four articles discussing the Four Ps of Marketing: Pricing, Product, Promotion, and Place. This article is about Place.

The idea of placement was recently brought home to me as we shopped for Christmas gifts. My daughter is four and a half and this is her first Christmas to get really excited in advance. She’s still young enough and innocent enough that she only asks for one present.

Last year she asked for a snow globe. That’s all she wanted. And when she saw a mountain of gifts under the tree, she turned to us and said “Ohhh! I don’t believe it! He got me a SNOW GLOBE!” She fished the snow globe out, turned away from all the dolls and the tricycle and toys under the tree and walked away to wind up the music box at the bottom of her snow globe.

So, when this year she asked for a “Barbie Snow Cone Maker” my wife and I began searching diligently. We had seen the ads that run during my daughter’s TV show, but we couldn’t find the thing. Wal-Mart didn’t have it. K-B Toys didn’t have it. No stores at the mall had even heard of it.

What value is there in spending millions to advertise a product that no one can buy?

So I took my daughter to the toy store and asked her to show me the snow cone maker that Santa was going to bring to her. We finally found a snow cone maker that was NOT a Barbie product (nor even produced by Mattel).

“Yeah,” she said. “That’s a good snow cone maker”.

So Mattel spend millions of advertising dollars to sell their competitor’s products. And the only fault was not having their own product placed where we could find it.

Microsoft, on the other hand knows exactly how to manage placement. Not only do they know how to place their product on store shelves, they even know how to place their product in the minds of the consumer, which is another aspect of placement.

Let’s look at each facet separately, starting with placement in the minds of the consumer.

Microsoft has the amazing ability to tell the same lie every year and still have people believe it. Every year they “leak” information that leads consumers to somehow believe that there won’t be enough of their new video games to go around.

If you had a product that you sold for $350-500 and it only cost you about $8 in plastic and $4 in Asian sweatshop labor to produce, and you had the strength and pull of Microsoft behind you, and the knowledge and experience of Microsoft, and the bankroll of Microsoft, and the distribution systems of Microsoft, don’t you think you could get that product to market in time for the largest selling season of the year?

Of course!

So why do people fall for this year after year? Why do they go out and buy ten of them and try to sell them on e-bay? Why do people get on e-bay and buy them at inflated prices when they can get them at department stores or on-line?

Because Microsoft is good at telling the story of scarcity. Microsoft is good at getting their product into a certain “place” in your mind. That placement is one of being VERY desirable and NOT very available. And so, even though you know it is a lie, you just don’t want to take the risk. This is mastery of placement.

Of course, the other side of that is actually having the product to deliver. Microsoft manages this as well. They don’t want shelves over flowing with their product because that shatters the myth that they already created. So they keep a steady stream of product flowing.

Never an abundance, but never completely sold out.

If we don’t have it in stock, we’ll put your name on our waiting list.

What excellent Positioning.

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Product

December 17th, 2006

This is the second in a series of four articles discussing the Four Ps of Marketing: Pricing, Product, Promotion, and Place. This article is about Product.

A friend was telling me an interesting story yesterday that really exemplifies the concept of understanding what you really sell.

He was at an outdoor festival and there were two balloon twisters there. As a performer and balloon twister himself he made the time to watch the two men work. There was a decided difference between the qualities of work the two men produced.

“Balloon Bob” was able to create really amazing works of art from a few latex balloons and the occasional scribble of a Sharpie pen. “Pretty-good Pete” on the other hand, was not quite as fast, nor was he able to create balloon sculptures quite as intricate or creative as “Balloon Bob”.

Important Point: “Pretty-good Pete” was really more than “Pretty Good”. He was a VERY competent twister. He produced beautiful work very quickly, which is critical in an outdoor setting like this. His work was by no means “sub-standard”. In fact, as the story was told to me, “Pretty-good Pete” was actually far better than average. He just wasn’t as good as “Balloon Bob”. And when they were side-by-side, it was easier to notice.

But here is where the story gets interesting. After only a few minutes of watching, my friend noticed that Pete was handing out 2-3 business cards for every ONE card that “Balloon Bob” was handing out. Why were people asking Pete for his card more often than “Balloon Bob” by such a large factor?

The answer wasn’t discovered until my friend went and stood in each person’s line. After waiting in line for 10 minutes, “Balloon Bob” asked “What can I do for you?”

“Can you make Elmo? My daughter loves Elmo.” And within a matter of a few seconds the man had created a very similar likeness to Elmo, handed it to my friend, and then looked past him to the next person in line and asked “What can I do for you?”

My friend then went to stand in Pete’s line and before he even got close enough to hear what Pete was saying, he was hearing the people in line talk about Pete…

“He is SOOOooo Funny!”
“He came to my birthday party and did magic tricks. It was hilarious!”
“He was at my party, too!”
“I saw him at my school. Everyone was laughing so hard!”

By the time my friend got up to actually speak to Pete, he already knew what the difference was, but he completed the experiment anyway. The line went a little bit slower because Pete would talk to each person as they stood there waiting for their balloon.

Much of his banter consisted of stock lines, but they were all new to the kids standing there. And Pete delivered them with a smile and voice inflection that made it sound like this was the very first time he had ever had this conversation.

“Where is your daddy young man?” he asked my friend with a grin.

“Actually, I was wondering if you could make a Little Mermaid for my niece”.

“Sure. How old is your niece?” he asked as he began selecting the balloons he needed.

“She’ll be five in February”.

“What a great age! Are you here with any children today?”

“No, just my wife and I. She’s shopping at the vendor booths, and so I thought I would come over here and check out the live entertainment”.

“If you call this entertainment, you need to get out more!”

And on this went while he deftly tied the balloons together in what looked remarkably similar to a mermaid. As similar as two or three balloons twisted together can look.

======================

“Pretty-good Pete” understands what his product really is. It isn’t “The Little Mermaid”. It isn’t “Elmo”. It isn’t crazy balloon hats or swords. These are PART of his product.

But what he is really hired to do is to make the guests at the event (WHATEVER the event is) have a better time. Balloons twisted together in innovative ways is one component of that. But equally important is his ability to relate and engage his guests and clients, and make them feel like they are really enjoying themselves.

His conversations might have been a natural result of his personality, or they could have been something he forces himself to do through repetitive practice. It doesn’t matter. Either way, it is a very important part of his success. It is a major part of his marketing.

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Pricing

December 14th, 2006

Last week I told you I was going to be doing a series on the Four Ps of Marketing. This entry is about Pricing.

Too often people assume that pricing is simple. It all comes down to supply and demand like they told us in Economics during our senior year of High School. If you aren’t getting the number of bookings you want, lower your price until you get as many as you can handle.

The reality is that pricing is MUCH more than how much you charge. We will ignore the fact that (contrary to what your HS Econ. Prof told you), people almost NEVER buy based exclusively on price. I’m not going to get into how to raise your fees, how higher prices often INCREASE responses, etc. (Although I do have an article about it on my web site at www.JulianSpeaks.com, just click the link to “Free Stuff”)

Instead, we’ll go right into the fact that pricing is much more than just your fee. If you want to break out of your rut, you need to think about “Pricing” as much more than just your fee. Pricing can include almost ANY fee the client pays in order to secure your services and/or any compensation you might receive in exchange for your services. And these two are not always the same.

Just to clarify what I’m talking about, your corporate client might need to rent risers for your performance at the annual awards banquet. That’s a cost to the company and is thus part of your “pricing” even though you never see that money. Conversely, when you sell magic sets at the back of the room after a scout banquet the money from those sets is not a direct expense of the scout group, but arranging the opportunity to sell is part of your pricing.

Pricing also includes how you structure your fee (per day, per hour, per show, custom quote for each event, etc.) Does it vary depending on the venue? Does it vary depending on who the purchaser is? All these things are relevant factors to your business model and you need to think about them from the perspective of the BUYER, not from your role as a seller. What does your prospect think when confronted with your pricing structure?

Mileage and travel fees are also included in your pricing. Under what circumstances do you charge these fees and how do you assess them? In some areas it would make you look like an amateur NOT to charge them, and in other venues it might make you seem like you are “nickel and dimeing” the client. This is something that deserves some thought.

What discounts (if any) do you offer? What stipulations, if any, are attached to getting the discounts? Discounts can often motivate hesitant buyers to take action, but if not used properly they can give the wrong impression. You should have a very clear purpose when using discounts if you decide to use them. But regardless, be aware that discounts are a component of your pricing.

This is all pretty complicated stuff that really does take some time to think about. If you don’t, then you are leaving all these factors to chance. With something so critical as to be considered one of the four cornerstones of marketing, all aspects of your Pricing deserve your rational and strategic thought.

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I’d Like to See Your Marketing

December 1st, 2006

A friend from out of state called me recently and suggested that we get together. “I’d like to see your show, but I’d really like to see your marketing” he told me.

“My show IS my marketing”

It reminded me of the cover page in one of the four manuals I provide to the workshop attendees at my annual Business Building Workshop held each January. The first page has only one sentence, bold and large font:

Everything you do is Marketing.

One of the fundamentals of marketing (and it is taught in even the Jr. High courses on business) is the concept of “The Four Ps”. Pricing, Product, Promotion, and Place.

Yeah, but that’s too elementary. I mean, if they teach it to Jr. High kids, it can’t be very worthwhile. I want the “secret”. I want to know the secret words that I can put into my direct mail piece that will triple response rates. I want to know the closing sales tactic that will boost my closing ratio on the phone to 90%.

I want to know an EASY way to grow my business that doesn’t involve introspection and self-examination. My ego is too fragile for that sort of work.

Okay, here it is. The four Ps are easy. But they do involve the ability to remove yourself from what you have been doing for the last few years and try to start with a blank slate. That’s tough for most, and impossible for many. But if you can do it, you can make some real serious growth in your business and you can do it in a way that results in long-term growth, rather than temporary spurts of activity.

So once a week or so, for the next few weeks I’ll be posting my thoughts on ONE of the four Ps. Each week we’ll look at another of the Ps until we’ve covered them all.

In the meantime, remember that everything you do is Marketing.

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