The success of your marketing strategy and generating sustainable, double-digit growth – especially for established, B2B manufacturers – depends on how effectively you address the four Ps of marketing to drive the fifth P: profit.
Manufacturers often focus too much on promotional marketing and not enough on product management, pricing strategies, and channel marketing (a.k.a. placement and go-to-market strategies). Here is what you need to know about each marketing “P”.
Marketing P #1: Product
Understanding the problems of your target markets and demonstrating how you can solve them with the products you manufacture is critical for generating demand. Market research, case studies, competitive intelligence, and product management can help identify these problems, how your products, services, people and processes can solve them, and the value created in time, money and opportunities.
New product concepts need to be prioritized by strategic and revenue-generating potential in your product roadmap.
Marketing P #2: Pricing
Effective pricing strategies generate profits while the wrong pricing strategies will put you in the fast lane to failure, but what separates them?
The key to a profitable pricing strategy is understanding the value your prospects – a.k.a. ideal client profiles (ICPs) and personas – associate with your products, and how your products compare with those of direct competitors and other alternatives (indirect competitors) in pricing and features. This helps prevent overpricing – or underpricing, which is surprisingly common due to a cost-plus vs. value-based pricing mentality.
Marketing P3: Placement
Finding the right go-to-market strategy is critical – the options carry distinct pros and cons:
- Selling Direct: the most straightforward approach but selling direct requires capturing existing demand (difficult for new types of products) and/or generating your own demand – this can be costly depending on the marketing and advertising needed to communicate your product value to prospects
- Selling through Channels: by recruiting channel partners already selling to your prospects, you are exchanging margin (the commission they need as incentive to sell them) for sales volume, and many wholesalers, distributors, resellers, dealers, integrators, and others expect at least 40% margin on each sale; manufacturers are often surprised to learn that their channel partners don’t want to stock any product and expect them to generate the demand
- Hybrid Approach: if channel partners fail to provide the desired sales volume, many manufacturers will sell direct and through channel partners, which runs the risk of alienating your channel partners if not done carefully
- Ecommerce: another form of selling direct, this can be a successful approach but can also create channel conflict
Marketing P4: Promotion
This is what most people think of as “marketing” but it’s only one of the Ps, especially for manufacturers.
Promotions include any way you promote or advertise your product:
- Traditional Marketing: printed marketing collateral, catalogs, tradeshows, advertising in industry publications, direct mail, PR, cold-calling, etc. – while the effectiveness of these approaches has waned significantly over the years in just about every industry, they can still be effective when combined with a modern, digital approach
- Digital Marketing: your website, content marketing, search engine optimization (SEO), third-party content syndication, pay-per-click campaigns (Google Ads, LinkedIn, Bing), email campaigns, social media, and marketing automation (HubSpot, Zoho, Pardot, etc.),
The Fifth P
When you create an effective marketing strategy that leverages product, placement, pricing, and promotions strategies, you succeed at growing the fifth P: profit.
Effective B2B marketing for manufacturing businesses requires experience and skill – as many as 16 different marketing skills are needed. Look for a manufacturing marketing agency experienced in working with manufacturers like you. Make sure they are as strategic, process-oriented and quality focused as you are.
Buyer beware: Industry marketing agencies often struggle to understand your business, your value and differentiation, and what prospects need from you – and likely know even less about market research, product roadmaps, channel marketing, and value-based pricing.