Recipe for a Thriving Business

If you’re a manufacturer, then you will definitely want to get a copy of this winning recipe! The ingredients: product, pricing, packaging, positioning, place, promotion and people. Directions: Mix together in a way that’s unique to you and most meaningful to the marketplace. Results: A thriving business that chooses to employ a successful recipe, commonly referred to as the “marketing mix.”

The Main Ingredient: Product

It goes without saying that a company’s product is the lifeblood of the business. It’s the inspiration and passion that drives founders to give life to their idea. If not for the fundamental belief in its genuine need and the hope for financial reward, it’s not likely anyone would undergo the tedious and sometimes frustrating exercises required to bring an idea to market.

Given its importance, a strong focus on the product is appropriate, but sometimes misguided. Usually the sole generator of revenue, the product commands attention; however, there are still six supporting ingredients that help to transform a company from idea to thriving business. Without proper regard to these other “ingredients,” the market at large will have no way to receive, understand, appreciate or desire the product. Without proper regard to these other ingredients, the business will struggle to grow and could flounder or worse yet, fail.

2 Basic Ingredients: Pricing & Packaging

Even the novice chef understands that certain basics are required in any recipe to support the main ingredient. Pricing and packaging are these basics. They provide a means by which a manufacturer can conduct business. Out of necessity, pricing and packaging are always addressed, but the extent to which they are successfully optimized is debatable.

Pricing: Pricing is a daunting task. Direct and indirect costs must be considered to determine a baseline/break even cost. The economy, marketplace and a consumer’s willingness to pay must also be considered to determine the optimal retail price. From this information, a wholesale price can be defined. Ideally, this price is one that maximizes profitability for the both the manufacturer and the retailer, while still providing value to the consumer. It’s not an exact science and if not executed well, margin can be unnecessarily given away or products can be priced too high for the market to bear.

Packaging: Manufacturers know their product best. They can easily share all the compelling reasons why anyone should buy their product. However, when in store, a product must speak for itself without the benefit of the manufacturer singing its praises. Carefully designed packaging, labels, and hang tags can speak volumes. Whether it’s communicating features and benefits, or simply eliciting attention amongst a bevy of other items in store, packaging can make or break a “buy” decision.

Making This Recipe Your Own: Positioning

What differentiates a company and its products? Positioning determines how the marketplace receives a product and why it should be chosen among the many other options available. This intangible trait called positioning spices up a marketing mix, separating one company from another. It defines the characteristics of the product as well as that of the brand. Positioning relates to consumers on a personal level, and if well executed evokes an emotional response. Relating on an emotional level is much more compelling than that of a functional one. Interestingly, emotional needs can be associated with any product despite how utilitarian it may seem.

How we shop, what we wear, and what we choose to buy our children all speak to our sense of self and value. These choices are extensions of our personalities and expectations. Why do you suppose some are willing to pay more for brand names, even in the grocery store? How a product is positioned can instill a sense of confidence its performance. When successfully implemented, positioning can lead to higher margins, increased volume and brand loyalty.

Adding Flavor: Place & Promotion

Given the relative importance of positioning it should be supported with consistent placement (i.e. distribution) and promotion. How one learns about a product and where it can be found are important factors that help to determine if a purchase is going to be made.

Place: When developing a brand’s position, it’s necessary to consider where consumers will find the product. Placement (i.e. distribution) establishes volume potential, but also reinforces a product’s positioning. When a product is positioned to be premium for example, one would not expect to find it at a discounter. When a product is positioned to be unique, one would not expect to find it at a national chain. Placement works in conjunction with positioning and helps build brand loyalty.

Promotion: Even the most desirable of products need to tell the world they have arrived. Promotion is the conduit to communicate to the marketplace that a product exists— why this product is better than its competition and how consumers can purchase it. Promotion is not exclusive to advertising. It is any means through which a company can communicate its presence. Generally it takes about a dozen impressions (encounters with a product) before one is motivated to move beyond interest to purchase. Promotion accelerates the rate of impressions and incents the consumer to purchase sooner.

The Pièce de Résistance: People

That last and most important piece of the marketing mix is people. Just who is going to buy the product? In general, selling within the children’s category involves talking to moms. However, moms are women with their own varying tastes, needs and budgets. Understanding these variations and tailoring the mix to relate to a defined target group of moms/women with respect to the product will make efforts more effective and efficient.

The Proof is in the Pudding

Creating a thriving business is like cooking a quality recipe. Quality recipes utilize all of these ingredients. While some are more important than others, they are all co-dependant. What does your marketing mix look like? How palatable is your recipe? The proof is decided upon by your sales and success.

About Insights Discovered

Penny Redlin of Insights Discovered is a guest expert on The Giggle Guide™. She will be a regular contributor to this new “Business Sense” feature, sharing more of her insights about business planning and marketing strategies.

Based in Las Vegas, Nevada, Insights Discovered was founded in 2010 by Penny Redlin in an effort to share her professional expertise within the children’s product category. The company’s mission is to give every mompreneur an opportunity for success. Insights Discovered exclusively services children’s products brands. The specific industry focus demonstrates a strong dedication to the unique needs of children’s products companies. Insights Discovered offers strategic planning, market research and traditional marketing services.

For more information, visit www.insightsdiscovered.com or call 702.218.5707