Discussing the 4Ps of Marketing丨Products (Version 2.0)

Marketing 4P refers to Product/Price/Place/Promotion. Let’s take a look at the author’s exploration of Marketing 4P.

If track selection is strategy, then marketing mix is ​​tactics. Strategy is to discover value (target market) and determine value (value proposition), while tactics are to build value (product and price), deliver value (channel) and communicate value (promotion).

It is almost impossible to completely crush the 4Ps of marketing. Generally speaking, one or two Ps have a relative advantage, which drives the other Ps and thus wins in business. The decomposition of the 4Ps of marketing should not be too simple or too complicated. If it is too simple, it will be superficial, and if it is too complicated, it will be difficult to start.

Next, we will systematically disassemble the product P. In the process of disassembly, we will try to find the essence of the product together with everyone. *The "product" mentioned below refers to the output of the industry, rather than specific products or services.

1. The role of products in 4Ps

The market is about discovering demand and then providing value. It is the matching of supply and demand and a strategic choice.

The marketing mix is ​​the tactical equipment for the implementation of the value strategy. The product is the core carrier, the price is the customer cost consideration, the channel is the access convenience, and promotion is the value communication.

The value is realized in 4P. "The speed of a train depends on the locomotive." Products are the direct embodiment of value, of course, except for monopoly.

Price (payment cost) and product (use value) form a combination to comprehensively measure "price-performance ratio".

Products are the locomotive, solving the problem of direction. Price is the power engine, solving the problem of customer cost. Channels are favorable guarantees, solving the problems of purchase convenience and shelf mentality. Promotion is the user's mental thrust, solving the problems of value decoding and memory repetition.

If we don't take monopoly factors into account, the deeper we invest in our products, the wider our moat will be. This is the safest and longest-lasting way. Of course, there are special cases, but it's just a matter of probability.

2. Product Definition

A product is anything that satisfies a consumer need.

It can be a tangible product or an intangible service. The former is like buying a car, and the latter is like taking a taxi. It can be the purchase of ownership or the purchase of the right to use. The former is like buying a car, and the latter is like renting a car.

Products are about solving problems, and the criteria for judging are the target groups. So it doesn’t matter whether a product is good or bad, only whether it is suitable or not. The key is whether it can solve the needs of the target groups.

When developing brand/product strategies, only when we think with users in mind can we find the points that impress users. If we have an outsider's bias in advance, it is easy to go astray and it is difficult to get out of the vicious circle of our own limited views.

3. One core and four elements to measure product competitiveness

*Product competitiveness not only depends on the pure product level, but also on brand power. Here, we will only consider the product dimension.

A core value - cost performance

The strength of a product can be described in one sentence: cost-effectiveness. Cost-effectiveness is the ratio of value to price, not simply a low price.

Simply put, consumers will only buy when the use value is higher than the price paid, because for them, it is "worth it".

Four major factors: function, appearance, service and price

Cost performance = value/price, value = function + appearance + service. Function means easy to use, appearance means good looking, and service means kindness (thoughtful/worry-free).

We can score the advantages and disadvantages of these four elements in the competitive environment, and then calculate the overall score. The total score can be 5 points, 3 points for qualified, 4 points for good, 5 points for excellent, 2 points for unqualified, and 1 point for extremely unqualified.

Of course, this applies to products with similar brand power, otherwise brand is another variable. If the brand level is different, these factors will naturally not be used as a reference.

4. Product Differentiation Points

Let me first talk about two concepts of product selling points. One is POD (point of difference), and the other is POP (points of parity).

POP is the baseline, which means you have it, I have it, and everyone has it. POD is the point of difference, which means I am better than others. As the industry develops, the previous POD may become POP.

5. Product Portfolio

Before talking about product portfolio, let’s talk about product line. Product line is a category, facing the same group of people and solving similar problems.

The product portfolio is "three dimensions". The width is the number of product lines, the length is the number of products (how many products a company sells in total), and the depth is the number of product options. It can be displayed using the following three-dimensional coordinates.

6. Product Matrix

Most brands have multiple products, each of which plays a different role. From the perspective of business operations, they can generally be divided into four categories: star products, traffic products, image products, and strategic products.

Star products need to meet three conditions: first, they are the main source of revenue, second, they meet high profits, and third, they support brand positioning. If there is only one star product, there will be certain risks. If consumer trends change and the product has related negative effects, it will affect the company's cash flow.

Traffic products, as the name implies, provide traffic, and generally speaking, the price is relatively low. Good traffic products should provide traffic support for star products.

Image products are mainly about showing off the brand's strength. These products generally use the company's most cutting-edge core technology and are presented at a high price. They are not mainly about sales, but about conveying the company's core customer value or core corporate philosophy. After all, the best way to show brand strength is through the direct application layer/consumer-perceivable layer.

Strategic products are generally MVP (minimum viable product) logic for testing market reaction, or strategic advance layout for competing products.

7. Product Life Cycle

Some categories will show a certain periodicity due to the influence of demand and supply. For example, traditional mobile phones (relative to smart phones), cup milk tea (relative to fresh milk tea), film cameras (relative to digital cameras), etc., are roughly divided into the introduction period, growth period, maturity period and decline period.

Introduction stage: At this time, there are few product types, few users, and little promotion. A large amount of marketing expenses are needed for market education, and at the same time, it is necessary to capture the "early adopters" as the original group of people.

Growth stage: At this stage, there is a consumer awareness base, and with the growth of demand, the market size continues to expand. With economies of scale and the continuous maturity of technology, production costs are reduced and profits increase significantly. Therefore, competitors continue to enter the market, and companies need to take defensive measures.

Mature stage: At this time, demand approaches saturation, the growth rate slows down, and enters the red ocean competition.

Decline stage: As product categories evolve, products gradually enter the elimination stage, with both sales and profits declining, and finally gradually exiting the market.

The above is from the industry dimension. From the perspective of the enterprise, product strategies will also be formulated based on the cyclicality of market feedback.

For example, PROYA's Black Bubble Mask basically goes through its entire cycle in one year, and then it is connected with the double-antibiotic essence. The double-antibiotic essence is currently in continuous iteration, thus extending its life cycle. It is now in its third generation. For example, Estee Lauder's Little Brown Bottle Eye Cream is now in its fifth generation.

8. Four Elements of Product Development

The four elements of product development are: people, scenarios, problems, and solutions.

We use four scenario-based questions to express the four elements of product development: what kind of people, in what scenario, what problems they encountered, and how our product solves the problem.

For example, for urban white-collar workers in big cities, when they feel troubled at work, coffee can effectively help them refresh their solutions.

For the marketing department, answering these four questions is basically finding the rationality of a product.

9. Product FAB Profit Sales Method

The feature indicates what the product is, and the advantage indicates what the product is used for. The logic is “the former is because, the latter is why”. The benefit is the benefit that can be brought to consumers, and the subject here is the consumer.

For example, the F (feature) of SK-II Facial Treatment Essence is that it contains the ingredient PITERA™, A (advantage) is that it fundamentally helps the skin regain vitality, making it elastic, radiant, white and youthful, and B (benefit) is that it allows consumers to have crystal clear skin and better skin condition.

For example, Apple’s F (feature) is App Store, A (advantage) is forming a closed ecosystem, and B (advantage) is protecting user privacy.

10. Key points of product manual

The product manual is to unify the understanding of the company's products within and outside the enterprise in the fastest time. It mainly includes brand introduction and product introduction (brand introduction is the basis of product introduction and is the part that unifies the tone).

The brand part mainly includes mission/vision/values, value proposition, brand positioning, and brand slogan. The product part mainly includes product slogan, target group, product selling point, product support point, and product SKU (specifications/price).

11. Main factors affecting product prices

The reason for analyzing the main factors of product prices is to look at the price influencing factors of specific categories and to see related factors from a long-term dimension.

For example, there are four factors that influence skin care: personal income, brand preference, skin type, and lifestyle habits.

Personal income is a common factor. The logic of residents' income and consumption rising with the tide is easy to understand.

Brand preference. This is based on the fact that the entire cosmetics industry is driven by brands, so brand preference affects consumers' purchasing decisions.

Skin type is also a major factor affecting the product, especially for wrinkled skin. Of course, products for sensitive skin are also relatively more expensive.

Lifestyle habits, such as irregular sleep patterns, eating habits, and stress, are directly reflected in the skin.

*Source: Leslie Bergman, a famous American dermatologist, created the 16-type skin classification test (Skin Type Solutions) based on the existing traditional five-type classification, compiled by Guosheng Securities Research Institute and strategist Zang Feng.

12. Product production process

Understanding the production process of the product will help you better understand the core logic of this category.

For example, skin care has two cores. One is emulsification. Cosmetics are the logic of water and oil. Because they are insoluble, they need emulsifiers that can dissolve both water and oil. Finally, there are water-in-oil emulsions and oil-in-water creams.

The second is to add functional ingredients. These ingredients are what really make cosmetics work, and these ingredients will differ depending on the product and need to reach a certain proportion to be effective. Therefore, those symbolic additions (content < 0.1%) actually have no effect. The Cosmetics Label Management Measures also classify such conceptual additions as "other trace ingredients".

13. Product Raw Materials

Raw materials are actually from the dimension of the entire supply chain, and it is also the dimension for understanding product composition.

The raw materials of cosmetics mainly include raw materials (matrix, general additives, active ingredients) and packaging materials (paper boxes, pump heads, plastic and glass bottles and aluminum foil bags).

14. Summary

For brand marketers, a deep understanding of the product is a must. It is a bridge that not only undertakes the development of demand, but also carries the communication of value.

Understanding products and industries is a systematic project that requires hands-on involvement and is a long and arduous journey.

Author: Zang Feng WeChat public account: Strategist Zang Feng