Saturday, October 01, 2005

Understanding the Difference Between Marketing and Promotion

Understanding the Difference Between Marketing and Promotion
Copyright © Stone Evans, The Home Biz Guy
http://www.PlugInProfitSite.com/main-9930

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.

About The Author:
--------------------------------------------------
Stone Evans Will Personally Build A Money Making
Website Just For You That's 100% Ready To Take
Orders And Pull In Massive Residual Profits Today!
Get All The Exciting Details And Signup Now At:
http://www.PlugInProfitSite.com/main-9930
--------------------------------------------------

NOTE: You have full permission to reprint this
article within your website or newsletter as long
as you leave the article fully intact and include
the "About The Author" resource box. Thanks! :-)

9 comments:

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