In 1960 a marketing expert named E. Jerome McCarthy created a model for marketing called as the 'Marketing Mix' which consisted of 4 P's – Product, Price, Place & Promotion. These Marketing Mix principles soon became a very popular tool useful for businesses to help determine a product or service's brand offering and to attract & retain customers. Taught in every B-school, the tool has been at the heart of marketing ever since and virtually every marketeer uses it to design offerings.
Marketing is a continuously evolving discipline and we may find ourselves to be left behind if we stay still in this increasingly complex, dynamic and competitive world. The Marketing Mix too has undergone many revisions by many experts with time. Today, we take a closer look at this fundamental concept in marketing from the perspective of a financial advisor/distributor. We hope our effort would help you learn and encourage you to relook into your own marketing strategy.
The Marketing Mix.
The Marketing Mix consists of principles which carry relevance in strategising, planning, promoting and delivering any product/service and in the process attracting and retaining customers. The original Marketing Mix with 4 P's was more suitable for a product centric era of marketing where physical products were sold. So let us first take a look at the original 4 P's in today's context.
1. Prooduct (includes Service): A product is seen as an item that satisfies what a consumer demands. It is a tangible good or an intangible service. The Product should fit the task consumers want it for, it should work and it should be what the consumers are expecting to get. For financial advisors, mutual funds can be seen as an example of product while financial planning can be an example of service.
The marketeers have to answer questions like...
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What does my customer want from the Product?
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What is the ideal product mix /basket for my target customer?
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What usefulness, utility, convenience will my product offer?
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What is the life-cycle of my product?
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How do I ensure quality, proper packaging of my product?
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What promises, warranties can I give for my products?
2. Price: The price is what a customer pays for the Product. The price is very important as it determines a business's profit and hence, survival and growth. Adjusting the price in virtually all businesses has a profound impact on the marketing strategy. For us, the price should represent a good value for money proposition for the customers. Customers should see & appreciate the advantages /value of being associated with a financial advisor after knowing the costs that he/she is directly or indirectly paying.
As financial distributors we cannot determine the price hence, we need to design our offering in terms of value that we propose to deliver. While setting the value proposition for a market defined price, we should ask ourselves...
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What is the perceived price by the customer for our Product?
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What is the perceived value of our Product?
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What does it cost you to deliver Product to the customer?
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What should be the right Product mix ideal for us and our customers?
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What is the break-even business need in our Product mix for us to keep going?
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How do we disclose price and communicate our value to the customer?
3. Promotion: An important component of marketing, Promotion can help create & boost your sales and brand recognition. It will comprise of all methods of communication that you may use to provide information to different parties about your Product mix. It consists of varies elements like your sales team, advertising & marketing activities, sales promotion strategies, etc.
In the digital age, Promotion have evolved rapidly and today it consists of both physical and digital promotion activities, customer interactions, social media engagement, etc. Financial advisors need to decide upon ...
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Having a brand recognition / identity to be kept consistent in all literature /promotions
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Having a proper website with proper content, tools & resources for target audience
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Designing & executing the right mix of different communication channels & modes (mobile, emails, SMS, web communications)
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Backing a digital presence backed with quality communications /interactions
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Physical promotion strategy to reach target audience
4. Place: Before the popularity & reach of internet, place carried huge significance and it answered the question where will I deliver my Product? Today in the era of e-commerce & digital transactions, customers need not go anywhere to transact. The challenge now is to find where customers are staying online and where they find shopping easiest and it can still be a mix of both digital and physical place.
Traditional financial advisors now have to evolve and evolve as the Place in the marketing mix is evolving today. They have to move from physical presence limited to a particular geography and move to the digital space where customers are increasingly shifting. The questions now are...
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Which mode /channels are suitable for my Products?
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What is my distribution strategy?
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What is my positioning strategy for my distribution?
The Extended Marketing Mix
Slowly as businesses and market places evolved, the 4 P's was increasingly felt to be insufficient to capture the entire essence of marketing mix. This led to the addition of 3 new P's in 1981 by Booms & Bitner. In today's internet driven, customer centric world, the Extended Marketing Mix is more suitable for services industry. This change in marketing approach is more customised and more holistic for customers. Let us now learn more of what these new 3 P's stand for...
5. People: People refers to customers, employees, management and everyone involved in the business. It is important for everyone to understand about the brand, the product that businesses propose to offer at a price. Employees who execute the service and the manner and skill in which they do so is at the heart of it. For any business today, having the right set of people around you is essential because they are as much a part of your business offering as the Products you are offering.
As a financial advisor, you may want to ask yourself the following questions here...
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As management, what vision, values, culture & goals do I set for my business?
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Do you have enough customers in your target audience /market?
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With whom do I associate /tie-up so that I add value to my business?
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How do I train & motivate employees to deliver advice/service?
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How do I shape customer service orientation for my team?
6. Process: Process comprises of the processes and systems within the organisation that impacts the delivery or execution it's services. The processes where customers are interacting with you are critical and you want them to be convenient, easy, simple, productive and efficient for the customer as well as the business. If you think, processes are what the customer are actually paying for in a service industry.
There can be a set of processes defined for every aspect of the business like for eg.- transactions, customer advisory, customer service, marketing & sales, employee management, administration, accounting and so on. As a financial advisor, we may need to decide...
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What are the key processes that I need to set in place to fulfill customer expectations?
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What processes do I need to improve to make my business lean, competitive, profitable and superior to competition?
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Are my processes cost effective, productive and value-adding for my business?
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Are customers happy /satisfied with my processes?
7. Physical evidence: The evidence is what shows that a service was performed or a product delivered. It is a challenge to ensure that your customers know and remember the delivery in a service industry. While it may not appear to be critical, but evidence is key for financial advisors where advice and services rendered are not tangible. It is also important for you to record and measure your and your team's performance in terms of delivery of advice/services. Further, evolving compliance expectations from advisors also has increased importance of evidence for all advice given and customer interactions /communications taking place.
Financial advisors need to can have evidences recorded /stored for customer enrolment, engagement, risk assessment, customer needs, financial /investment plans, recommendations for products, etc. Financial advisors would need to assure that...
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Requisite facilities & infrastructure is in place for service delivery
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Records & customer confirmations /communications are adequately made for every transaction /interaction
Conclusion:
The principles of Marketing Mix or the 7 P's can be used at a conceptual level and also at an execution level depending on your needs. These principles are as valid for an independent, one-man driven businesses as it may be valid for large institutions. The idea here is to think and question our businesses on these principles to get define and arrive at a clear picture for our customer and our business. This clarification will assume increasingly greater significance if you dream of making your business big....
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