The Four P's and their place in marketing nirvana

Marketing classes have always emphasized the importance of "the 4 P's" when determining how to launch a product (or a company for that matter). For those who missed class that day, the 4 P's are
• Product
• Price
• Place (distribution)
• Promotion

To have a successful company, one must succeed in all 4 of the P's. Like most things though, after knowing that you need the 4 P's, determining the relative importance of each "P" is where the magic comes in. A simple comparison might be the ingredients to a cake. You know you need eggs, flour, etc. but if you don't know the exact measurements of each, you could be in for a nasty tasting cake. The same is true in marketing. Unfortunately though, in marketing, the cook books are all guesstimates and just one person's opinion as to how to make the best cake.

So let's take a quick trip through the P's as I see it.

Product

It all starts with the product. If the product isn't great, you can only BS people for so long. They may buy the first time (if you have great Promotions, a low Price and solid Place (distribution) but they won't come back. So in my opinion, product comes first and everything else is based on starting with a good, viable product that is useful and well designed.

Price

Pricing a product properly has to factor in a number of different issues. First is manufacturing cost. What does it cost you to produce the product including any outside costs? What are you hoping to add to that cost to create your profit? Is there a standardized formula in your company or does each product get its own assessment based on other factors (competitors, etc.)?
The second factor is competitive pressures. If you have competitors that make very similar products, how does your price compare with theirs? How important is it that your price be priced similar to the competition? That brings us to the third factor -- the perceived value of your product by your customers. For instance, certain brands like those from Apple, can get away with a higher cost than the competition based on the preconceived value proposition placed on those products by the customer. This also explains the real value in dollars of creating a company that has that special gloss to it that gives you this kind of pricing flexibility. Not many companies have it but if you do, you have probably earned it and you can definitely exploit it.
If your product is unique in the market and you don't have to bow to competitive pressures, you are in the enviable position of setting the price for the market. But be careful. If you set the price too high, you leave the barn door open for competitors to jump into the market at a significantly lower price and undercut what you have worked hard to establish.

Place

OK, I'll admit that the word "place" isn't really a great word for this one but if we called it Distribution, we couldn't call them "the 4 P's". So for purposes of this essay, we will call it distribution. How your product is distributed can be a critical factor and can spell disaster even for a great product. We have seen products that otherwise would have been successful fail due to poor distribution and other products skyrocket when they achieved national distribution through the recognized channels of distribution in their market.

Distribution can fall into various categories. With the onset of more and more ecommerce sites, some companies are choosing to go direct through this channel. That means they have no middle man, no distribution costs and they are able to maximize their profit. So why doesn't everybody do this?
Going direct requires that the entire burden of getting your product to its intended customer falls squarely on your shoulder. You have no reps, no wholesalers, no distributors, no dealers with "boots on the ground" pitching your product to potential customers. So while you benefit from not having the pay those "middle men", you also don't enjoy the fruits of their labor.

Selling through dealers or distributors can put your product on the map almost instantaneously. Some dealers/distributors (different markets use different terminology) have catalogs that may include your product and put it in front of thousands of prospects. This can significantly shorten the selling cycle but of course, there is a price to pay (usually 40-50%). Add in the cost for using reps if you go that route and you add another 6-10% in cost.

There is no right or wrong method. It depends on the product, the market and your ultimate goals.

Promotion

Not that we are prejudiced but there is the area where we become involved. Let's assume you have a solid, viable product. Let's assume you have also priced it appropriately for the market.
Let's finally assume that you have the distribution in place that will take you to market in the manner in which you have all agreed to enter the market. Now you have the all important final ingredient to your cake. It's the icing, if you will. Like a good cake, the cake may taste fine on it's own but it's the icing that makes it special.

So regardless of how you price and distribute your product, you need to tell the world (or at least your niche of the world) that your product is available and what benefits it will bring to them.
That's where marketing comes in. Now you have the quandary of what type of marketing tactics you should use to get the message out. Should it be print? Online? PR? Trade shows? E-mail marketing? The answer is probably a combination of all of the above in a well constructed marketing plan designed to meet your objectives.

I wonder who could do that? The same people who bake delicious cakes with scrumptious icing.