It’s a new month, and that means it’s time for a new feature here at Mirasee.
The theme of the month is Four Questions of Marketing, which are the four different ways that marketing can help your business. It’s all based on the very simple fact that the purpose of marketing is to help your business make more money.
How much money your business makes is a factor of two things: Profit per Sale, and Number of Sales. Simple enough, right? The profit that you make on each sale, times the total number of sales that you make, is your total profit.
So to be more profitable, you either need to increase the profit on each sale, or increase the total number of sales – or both.
On the profit side, the factors are your price, and your costs – you can make more profit on each sale by either raising your prices, or lowering your costs. And on the number of sales side, the factors are your market share, and your market size – you can make more sales by either growing your share of the market, or growing the entire market.
So the four questions of marketing are:
- Will it let me raise my prices?
- Will it lower my costs?
- Will it grow my market share?
- Will it grow my market size, or let me enter new markets?
Every marketing activity you undertake must answer yes to at least one of these marketing questions. If it does, then you’ll have better numbers to plug into that equation, and more profit to be made!
Question #1: “Will it let me raise my prices?”
This is about marketing activities that increase the amount your customers are willing to pay for your product or service. We’ll have more examples for you in the coming weeks, but for now, let’s pretend you’re selling pies.
If that’s the case, some of the things that you could do for your customers to be willing to pay more might be talking about how all of your ingredients are organic and local-grown, or how every single pie-crust is rolled by hand.
Question #2: “Will it lower my costs?”
This is about reducing the amount that it costs you to create, promote or distribute your product or service. For example, you might find cheaper suppliers, reduce your overhead costs, or go after economies of scale.
Sticking with your pie example, this would include anything that made it less costly for you to make or sell them, like baking 15 pies at once, or switching to a cheaper filling.
Question #3: “Will it grow my market share?”
This is about getting more people who could buy from you to actually do it, and this is what people usually think of when they think of marketing. Anything that increases awareness of your brand, communicates the benefits that you’re offering, or otherwise seeks to persuade someone that you’ve already profiled as your target demographic falls into this category.
In the pie example, anything you do to promote your pie shop to your existing target market would count towards growing your market share.
Question #4: “Will it grow my market size, or let me enter new markets?”
Expanding your market size is about getting more people to consume your category of product or service, in general, because you know that you’re going to get some of that business. It’s something that market leaders usually do; when Budweiser advertises, they aren’t trying to get people to switch to Budweiser, they just want more people to drink beer, because they know that they’re going to take a big chunk of that market anyway. It’s also something that’s done in industries that are still young and growing, because a bigger pie means more success for all the players.
Using the 4 Questions of Marketing
The 4 Questions of Marketing is a framework that you can use to evaluate different strategies and tactics that you might consider for your business, and maybe even to come up with some new ones, too!
Over the course of the coming month, we’re going to spend a chunk of time on each of these questions. We’ll talk about what the question really means, and how you can apply it in your business. We’ll explore some case studies, we’ll talk to experts, and we’ll give you tangible takeaways that you can use to put this all into practice.
At the end of the month, we’re also going to send some bonus case study material to our subscribers. This is going to be valuable extra content that we aren’t going to post publicly, anywhere – but our subscribers will get it for free.
So if you want the bonus content, and you don’t want to miss out on all the great stuff we’ve got coming your way, scroll down to the end of the post, and put your name and email address in the boxes to get on our list.
That’s all for now. Thanks a lot for reading, and I’ll see you around the blog!