So how can you set your business up for success?
Every successful business, no matter what stage of business it’s in, needs a solid growth strategy to operate from. A growth strategy is essentially a plan for overcoming challenges, maintaining competitive advantage, and achieving sustainable long-term growth through increased market share and revenue.
In this article, we’ll delve into the key components of a solid growth strategy and how the fundamental elements of the “four Ps” contribute to its success.
What are the “four Ps”?
We’re going to take it back to the basics with this one. The “four Ps,” also known as the “four Ps of marketing” represent a foundational model for businesses that centers around product, placement, promotion, and price.
Each of these elements, when brought together, create your marketing mix, and each “P” plays a distinct role in your overall strategy. A solid growth strategy for any business must touch on each of the “four Ps” – focusing on just one or two of them will limit your business’ potential for success.
You also need to have a good understanding of where you fit in the marketplace. For example: are you a high-quality, high-cost product or service that needs less customers to achieve a target revenue goal (think designer clothes and brands)? Or are you a low-cost, lesser-quality product or service that needs a lot of customers to achieve a target revenue goal (think the type of bulk products sold with “everyday low prices”)?
One critical part of your business’ growth strategy should be a plan for continued product development – are you going to focus on developing new products or services, or improving your existing ones? Or a mix of both? What informs that decision? How you prioritize product development and why is a part of your overall growth strategy.
2. Placement: Placement refers to how and where you sell your product. Not only do you need to consider where your customer is looking (online vs. brick and mortar), but you need to consider how they expect to find and purchase what it is that you’re selling.
You also have to understand their purchasing motivations. Are they going to buy your product or service out of convenience? Necessity? Desire? What are their motivations and how will those impact their buying decision?
For example: you wouldn’t want to sell a pair of running shoes in a dress shop. Wrong time and place. You would, however, want to sell them in a sporting goods store next to a pair of joggers. Effective placement ensures that your product reaches your target market at the right time and in the right place.
A good growth strategy looks at how your customers’ behaviors might change in the future, and provides a process or framework for adjusting placement to prepare for that change.
3. Price: Price refers to how much you charge for your product or service. You need to ensure that your price is competitive and reflects the value of your product or service you’re selling.
Pricing is a critical factor in determining customer perception and market competitiveness. A well-thought-out pricing strategy can position your product as a valuable investment, enticing customers to choose your offering over alternatives.
As a part of your growth strategy, you should consider adjusting your pricing strategy based on market conditions and customer behavior, either to enhance profitability and/or drive sales.
Promotion can include inbound marketing, digital advertising, and public relations efforts. However, where most people get marketing wrong is that they think of it only through this P, when it should be considered in combination with the other Ps. Successful promotion requires the right product, in the right place at the right price.
In order to create a successful growth strategy, you have to consider how fast or slow you want to grow, and your promotional efforts must align with your growth strategy in that way.
For example: if your overall plan is to grow 30% year over year, but you aren’t investing enough resources into promotion, you’ll likely fall short of that goal. Inversely, if your goal is to grow slowly over time due to inventory or capacity reasons, you likely need to tailor your marketing to ensure you’re not investing too many resources in bottom-of-funnel activities that will drive too many leads for your business to handle.
If you need help creating a growth strategy or aligning it to your “four Ps,” feel free to reach out and learn more about how we can help.