Catching lightning in a bottle when creating a product is like hitting a home run! And the secret to success lies in the 4 P’s of Marketing – the right product, price, placement, and positioning. Don’t just blame the product if things don’t go as planned, sometimes it’s just a matter of finding the right fit with the right price. Take a step back, assess the 4 P’s, and watch that lightning strike! Who knows, you might even end up with a best-seller just like Spanx did after adjusting their price a few years later. Get ready to unleash your inner product genius and catch that lightning!

What are the 4 P’s of Marketing exactly?

Create Perceived Value

First up, we’ve got “Price”. Oh, the thrill of pricing as an entrepreneur. Let me share with you a story from Sara Blakely’s journey. She used to sell fax machines under the brand name “Dex”, but despite being cheaper than Canon, people still chose the latter. She was left wondering, “Why?!”.

So, Sara decided to try something different. She raised the price of Dex slightly higher than Canon. And you know what happened? People started taking notice and asking questions like “Why is this Dex machine more expensive than Canon? What am I missing here?” This gave Sara the perfect opportunity to show off all the fantastic features of the Dex fax machine. People started buying it in droves!

When it comes to pricing, it’s all about creating perceived value. Of course, we have to make sure the price covers our manufacturing costs and all the other necessary business stuff. But don’t forget, pricing is not just about the numbers, it’s about the value you bring to the table!

Pricing Spanx

So, when it comes to distribution plans, Sara Blakely knows the importance of being clear on where you want your brand to show up in the marketplace. Is it premium, mid-tier or value-based? This decision will affect where you compete and where you position yourself in the market.

Sara aimed for premium and wisely chose to start at the highest level of the distribution tier, as it’s easier to go down than to go up. When figuring out what to price your product, it’s important to consider where you want it distributed, what prices are in the area, and what your competition is doing.

Sara chose to price her product a bit higher, creating a perceived value, as she learned from her experience selling fax machines. This made people ask questions, creating a chance to showcase the unique features of her product.

Remember, pricing is a personal decision and there’s no one right answer. You can always try and adjust if needed, just make sure you have a healthy margin to sustain your business. Trust your gut and go with what works best for you!

Know Your Distribution Plan

if you’re like Sara Blakely and want to conquer the top tier of the market before moving on to the middle tier, listen up! Timing is key, and it might take several years to get there. And remember, the middle tier loves sales, so make sure you protect your pricing to preserve your relationship with both consumers and buyers.

Sara knows a thing or two about navigating the tiers. When she was just six months into Spanx, she went ahead and cold-called QVC. And even though people told her she was going to ruin her brand by selling on QVC, she believed that she could preserve it by being there herself and telling the story of Spanx to the world. After all, QVC reaches 30 million people and was a platform for her to showcase her invention, the difference it made, and the results. And it was worth it!

When the time came to negotiate prices with the QVC buyer, Sara had a make-or-break moment. Despite shaking, she held her ground and refused to sell at a lower price than what she was already selling at Neiman Marcus and Bergdorf Goodman. And you know what? They gave her a chance and she blew them away by selling 8,000 pairs of Spanx in just six minutes! The back orders were pouring in, and Sara’s feet didn’t even hurt yet.

Sara took a risk, but she controlled the situation by being on air and not compromising on price. And guess what? It worked! The QVC appearance became a free commercial and people were going to Neiman Marcus to buy Spanx because they saw Sara on TV. And the best part? Neiman Marcus saw a higher lift in sales volume because people were seeing Sara’s free commercial on their TV. So, there you have it. Take a page out of Sara’s book and navigate those distribution tiers like a boss!

Strategize Discounts

And let’s hear it for Sara Blakely, who knows that offering sales can be oh so tempting, especially when you’re trying to boost your business. But, before you dive into discounts, it’s important to consider which tier your products or services fall under. If you’re in the value-based category, sales may be a necessary part of the game, but for premium offerings, it’s all about preserving the brand and avoiding erosion.

Sara knows the drill and warns that once you train your customers to expect discounts, it’s tough to reverse course. So, she takes a strategic and controlled approach to sales, maintaining the value of the Spanx brand.

Conclusion

The 4 P’s of Marketing are crucial for success in product creation. The 4 P’s stand for the right Product, Price, Placement and Positioning. To create a winning product, it’s important to consider these elements and adjust them as needed. Price is not just about numbers, it’s about creating perceived value by considering your target audience, distribution plan and competition. When it comes to distribution, aim high and choose a tier that aligns with your brand’s positioning and pricing. Timing is key when moving up the distribution tiers, but also be aware of sales trends and make sure to protect your pricing. Sara Blakely, the founder of Spanx, is a prime example of taking risks and preserving her brand’s value by not compromising on price. By being strategic with the 4 P’s and putting in the effort, you can catch that lightning in a bottle and create a best-seller!