Understanding
the Difference Between Marketing and Promotion
Copyright © Stone
Evans, The Home Biz Guy
http://www.pluginprofitsite.com/main-2508
Are you an online
marketer? Or do you simply promote affiliate programs? Marketing is
truly the most misunderstood word in use today on the Internet. Let me
see if I can clarify this issue just a bit.
In Marketing 101 at
your local university, marketing is actually the process of Product,
Place, Price and Promotion.
PRODUCT
No business can
exist without a product or service to sell.
In a nutshell,
entrepreneurs are the people who believe in a product, service or idea,
so much that they are willing to invest their lives into the
development of their dream.
Historically, every
major corporation in the world was started by an entrepreneur with a
dream and the drive to make it a reality.
However, there comes
a time in the life of every corporation when those who fear the
gambling nature of their founder, squash the entrepreneurial drive that
made the company a viable concern in the first place. The entrepreneur
will either submit to the careful nature of the stockholders, or he
will be forced to leave the company he created.
The only
entrepreneurs who withstand the pressure to move more carefully are
those who have maintained majority control over their companies.
PLACE
In the offline
world, place is defined by location. On the Internet, place is defined
by domain name and the web hosting service chosen.
Both online and
offline, place can make or break a company without respect to the
quality and value of the product, service or idea.
PRICE
Selecting a price is
determined first on a basis of whether the company wants to be seen as
a discount or a value company.
Take for example
Wal-Mart and Staples.
Wal-Mart is the lead
discounter in the marketplace. Staples on the other hand is the
specialist in office supplies.
Both sell a
significant number of office supplies despite the fact that the lowest
price can usually be found at Wal-Mart. As a value dealer, Staples can
afford to charge more for their products than Wal-Mart.
So the question for
you is whether you want to position your company as a discount or value
company.
Testing has shown
that products and services can be sold at any number of prices and
still reach a significant number of people.
The challenge of
selecting the best price for your product or service will require a
certain amount of testing.
UNDERSTANDING THE PRICING EQUATION
Let's assume we are
selling a product. Let us also assume that we know that the product can
be sold for $10 or $50. Let us also assume that if the price dips below
$10 or rises above $50, then the product sales fall off significantly.
Our challenge is to
determine the best rate at which to sell our product.
Testing has shown us
that we can sell 1000 items a week at $10. Testing has also shown that
we can sell 500 items per week at $50. And testing has shown that we
can sell 650 items per week at $45.
At $10, our
projected weekly earnings are $10,000. When we sell the product at $50,
we know that we can earn $25,000 per week. Most importantly, we know
that we can earn $29,250 when our product is priced at $45.
With the imaginary
testing we have done on our imaginary product, we can easily see that
selling our product at $45 per item will earn us more money over the
long haul.
Thus, when we make
the decision for a national rollout of our product, then we will price
our product at $45.
Of course, this is a
very simplistic analysis of the point I am trying to make. Though
simple, I believe this analogy will help you understand the methods of
developing a product's prices.
PROMOTION
Promotion, on the
other hand, is the process of notifying the consumers for your product
or service of your availability to serve them.
Methods of promotion
vary distinctly and should be arranged to meet very specific goals.
As with product,
place and price, promotion should not be left to chance. You should
test every ad, every media, and every price point to determine the best
bang for your promotional dollars.
HEADS UP!
If you are an online
promoter or marketer, please factor in the most important element
concerning the cost of your promotions.
What element is
that? Your time!
Value your time at a
certain dollar amount, and figure in your time into the cost of your
promotional accounting.
I say this because
too many online promoters lose sight of this concept and spend 20 hours
to generate one sale while using free advertising. Even if you rate
your time at the federal minimum wage, then you will have invested $105
of your time for one sale that might only net you a gross sale of $45!
ARE YOU TRULY A MARKETER OR ARE YOU JUST A
PROMOTER?
Most people who run
a business on the Internet call themselves marketers. Yet, most of
these same people are really just promoters wrapped in the label of a
marketer.
True marketers do
not promote without a lot of advance work. They spend time planning,
testing and measuring their actions and results to get the most out of
every dollar spent and earned.
Entrepreneurs
finesse the art of marketing as they build their company into a major
enterprise.
If you are a
promoter who does not keep an eye on the total marketing equation, then
you are bound to fail.
If you do call
yourself a marketer, then do what a professional marketer does. Make
sure that every dollar spent is spent well. Make sure that every dollar
earned is put to good use. Market well so that when the people of the
next generation look at your life, they will see a fine example of a
successful entrepreneur that they will strive to emulate.
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