At WordStream, we talk a great deal about how to market your business, but in today’s post, I’ll be talking about how to market your products.
Product marketing is a complex and multifaceted discipline, but that doesn’t mean that small businesses can’t leverage the tried-and-true strategies used by larger companies to find new audiences for their products and launch successful promotional campaigns focused on specific goods.
There’s a lot to cover, so let’s get started.
What Is Product Marketing?
Product marketing is the process by which goods are presented to their target markets. Product marketing defines the messaging of the advertising campaigns, the channels through which the product in question is promoted, the scope of the campaigns and the product’s intended audience, and how the product itself should be sold.
Essentially, product marketing encompasses everything that concerns how a product is positioned, promoted, and sold.
What About Product Management? Is That The Same Thing?
You may have seen the term “product management” used in business books or on marketing blogs, and many people confuse product management with product marketing. These two terms are not interchangeable, and they refer to two very different business functions within an organization.
Product marketing most commonly (and unsurprisingly) falls under the purview of the marketing department. Product marketing may be a dedicated team within a larger marketing department, or the core marketing team may engage in product marketing campaigns. Either way, product marketing is marketing, plain and simple.
Product management, on the other hand, is a wider, higher-level managerial process that encompasses all aspects of the product throughout the entire product lifecycle, from research and development to the point of sale. Product marketers often report to product managers.
This diagram, which represents a typical product team organizational structure in a software startup, visualizes the difference very well:
Image via Openview Labs
The 7 P's of Product Marketing Strategy
Product marketing professionals often refer to a set of core principles known as the “seven P's” of product marketing, which are:
- Physical environment
Let’s take a look at each of the seven “P's” of product marketing strategy individually, and how you can leverage these principles in your own business and product marketing initiatives.
It stands to reason that if you’re interested in learning more about product marketing, you probably have a specific product in mind. However, the term “product” may mean several very different things, depending on the type of company you operate. As such, not every one of the seven P's will apply to every business.
For example, a hardware store would consider a new line of power tools to be a product, specifically the individual power tools in that particular line. A software-as-a-service startup, on the other hand, would consider its software offering to be its product. In WordStream’s case, our PPC management platform WordStream Advisor is our core product offering, and as a SaaS company, we aren’t concerned with the seventh of the seven P's – physical location – as our product is not sold at any physical location.
Whatever your business sells, you can still leverage some or all of the seven P's to promote your product. Even if you run a service-based business like a landscaping company or catering firm, you can use product marketing to position your services as the product – many of the principles apply to goods other than actual physical products.
Pricing is one of the most important of the seven P's, and a huge consideration for all businesses regardless of what they sell.
Setting the price of a product is about more than just setting a figure at a level that a business owner believes their customers will pay for a product, and there are several important factors that need to be taken into consideration when setting the price of a product. For one, there’s the overall marketplace conditions that are relevant to your business. Is the general market ecosystem in your industry healthy, or are times particularly tough? Is there high demand for what you’re offering, or are you operating in a crowded market with ample competition?
Then there are your customers to consider. Are they willing to pay what you’re asking? Do you have plentiful customers or clients, or are you struggling to find enough potential leads? Finally, what are your competitors doing? Are they undercutting you by reducing production costs, or are they leveraging a USP to increase their pricing? Do they have the same business model as your company? How much are they charging?
Obviously, that’s a lot to think about, but for product marketers, identifying and answering these questions is often among the first steps they’ll take to determining the perfect price point for their product. There are additional considerations that might further complicate matters, such as third-party vendor pricing, external production overheads (such as engineers, in the case of a tech startup for example), and international currency complications. Regardless of what you sell, this market research and competitive intelligence gathering is vital for your product marketing initiatives.
To the uninitiated, it may be easy to confuse place with physical environment when it comes to product marketing, but the two terms refer to two very different pieces of the puzzle. Place can also be referred to as product distribution, or how you plan to get your product to your customers. Again, this stage of the product marketing process varies widely from one business to another.
For example, a software startup may consider online distribution to be the ideal (or only) product distribution method that makes sense. For the hardware store selling a new range of power tools, the product marketer may rely on a small set of intermediaries (merchants that buy and resell products) to sell the power tools at select retailers, in a process known as selective distribution.
For now, let’s focus on physical products. There are three primary types of distribution:
- Exclusive distribution
- Selective distribution
- Intensive distribution
The first type, selective distribution, is precisely what it sounds like, in which a product is only sold to a very small number of retail outlets through an even smaller number of intermediary merchants. This model is most common in the luxury goods market – you can’t buy a Rolex watch just anywhere. This exclusivity is reflected in everything from the product’s marketing messaging right down to its distribution channels.
You can’t buy a Rolex just anywhere…
The second type, selective distribution, is also very common and is the preferred distribution method for certain types of products, such as power tools and household appliances. After all, you wouldn’t expect to see Black and Decker power tools or Whirlpool washing machines on sale at Barnes & Noble, would you?
The third type, intensive distribution, is when a product is sold virtually everywhere. When I first moved to the United States, I was amazed by the fact that you could grab candy or soda while waiting in line at clothing stores (and bookstores, and hardware stores, and…). Think about where you can buy Coca-Cola – everywhere, right? This is a classic example of intensive distribution.
Coca-Cola – the master of intensive distribution.
Although all of the seven P's of product marketing are important, as marketers, we’re most interested in the fourth “P” – promotion.
In product marketing, promotion doesn’t just refer to where a product will be advertised. It can (and usually does) refer to almost every aspect of how the product is presented to its target market, including brand awareness, demand generation, lead acquisition, product differentiation, and even wider, overall product messaging. Essentially, promotion can be thought of as everything that concerns how a product and brand are perceived by the public and its target audience.
For the majority of digital marketers, there are two primary means of promotion when it comes to product marketing – paid search and paid social. Paid search is an excellent way to raise brand awareness, generate leads, increase sales, and reach a wider audience. One of the strengths of paid social advertising is the ability for marketers to target incredibly granular audiences, a key strategy for product marketers. We’ll get to how to leverage these channels shortly.
Just as no two product marketing initiatives will be exactly alike, the fifth “P” of product marketing – process – will differ greatly from one business to another.
The product marketing process can be thought of as the entirety of the pipeline in a product marketing campaign, which itself can be subcategorized into two main stages: strategy and execution. For startups and businesses that do not sell physical products, the product marketing process may be split into three phases: pre-release, release, and post-release.
An example product marketing process workflow
Even the most meticulously planned process phase can be optimized and improved upon. In the software world, startups often learn a great deal about their product marketing process following the launch of a new product or tool, which is an excellent way to identify new opportunities for future launches. The same can be said for businesses that sell physical products. Perhaps the distribution method can be expanded or narrowed to increase visibility or adoption. Maybe the target audience for a planned product release can be refined to deliver more targeted messaging, which in turn can inform future paid search and paid social promotional campaigns.
To complicate matters, “process” in product marketing can also refer to the process through which a customer must go in order to actually purchase a product. Online retailers give this a great deal of thought and subsequent optimization, as online shopping carts (the process through which customers using an ecommerce site go to buy things) are often abandoned, despite being ridiculously easy to complete from the customer’s perspective.
The same principle applies to physical stores. How should a product be presented – on a shelf, or as part of a sophisticated display? Does the customer have to carry a large box from shelf to register, or will a sales agent handle it? Is the sales process itself consultative, or transactional? These are all considerations that fall under the “process” stage of product marketing.
Product releases don’t just happen – people make them happen. Whether we’re talking about a new line of cardboard boxes or the latest iPhone, product releases are the result of countless hours of work conducted by a wide range of people, from product managers and engineers to manufacturing personnel and sales professionals.
For small businesses, the “people” part of the product marketing pipeline is likely to be one of the most challenging bottlenecks. For one, many smaller companies lack the resources to hire dedicated, experienced professionals to handle the various tasks associated with a product launch. However, that doesn’t mean that small businesses can’t do product marketing well. In fact, being smaller (and thus, more agile) can be an advantage in some situations.
Regardless of what you’re selling or how many people you have at your disposal, it’s crucial to know how many people your product marketing pipeline will require, and who can perform the roles necessary to get your product to market. Do you need to hire additional staff to handle increased demand, or can you get by with asking existing employees to handle additional responsibilities? Will your product marketing pipeline be handled entirely in-house, or will you need to outsource work to contractors? Do you even need a sophisticated product marketing pipeline in the first place? These are all questions to consider when evaluating how to grow your business.
Ever gone to the grocery store to pick up a few things, only to spend more than twice the amount you’d prepared to spend? This isn’t an accident. Most stores (particularly supermarkets and large department stores) leverage psychology to manipulate shoppers into buying more than they want or need. It’s quite dastardly when you think about it, which makes me personally feel a lot better about dropping $200 every time I go to Target.
However, physical environment within the context of product marketing is about much more than the environment in which products are sold – it’s about the experience that the consumer has while shopping for your products, and the perceptions of your brand as they relate to the physical environment of the store or retail space.
Obviously, physical environment isn’t a consideration for every type of business, nor is it especially important for every type of product. Think back to our Coca-Cola example from earlier. Sure, sometimes stores go all-out for their soda displays (such as the novelty arrangements of 12-can multipacks you see in supermarkets), but oftentimes, bottles of Coke are merely sold in refrigerators next to the cash register. Of course, Coca-Cola is perhaps in a unique position when it comes to product marketing, but you get the idea.
The irony is killing me. Photo via Jack Zalium
Breaking Down Product Marketing Strategy: The 4 Big Questions
Now that we’ve examined the “seven P's” of product marketing (and determined that not all of them will apply to every business or product), we can break down these concepts into four big questions that will apply to every business and every product:
- What is being sold?
- Who is the target audience or ideal customer?
- How will you reach those customers?
- How much should the product cost?
Now we’re going to examine each of these four questions within the context of digital marketing to help you make sense of how product marketing can work for your business.
If you’re interested in product marketing, the chances are good that you’re either trying to learn more about marketing your existing products more effectively or promoting a new product line. Even if you’re not selling a physical product (say, if you’re running a SaaS startup or a service-based business), you can identify whatever it is you’re selling and go from there.
We’ve said it countless times before here at the WordStream blog, but I’ll say it again: people don’t want to buy things, they want to solve their problems.
This principle applies to virtually everything you can buy, from a bottle of Coca-Cola to the latest iPhone. If someone buys a bottle of Coke, they did so because they were thirsty (why they chose Coca-Cola over another branded drink is another matter entirely, of course). For consumer electronics products like iPhones, the reasoning behind the purchase may be more complicated, but it’s still rooted in the desire to solve a problem. For example, one customer might buy a new iPhone because they’re sick of their old Android mobile device and like the iPhone their friend has. Another customer may want to solve a more nuanced, abstract problem with their purchase of a new iPhone, such as making themselves feel better about their perceived social identity by owning the latest Apple device. Regardless, the motivation behind these two examples is the same – the customer wants to solve a problem by buying something, not to purchase a product for its own sake.
Love it or hate it, Apple knows what it’s doing when it comes to product marketing
In terms of your marketing messaging, consumers’ desire to solve problems should be the foundation upon which all your messaging is based.
If you sell a physical product, your marketing should make it abundantly clear why customers’ lives will be better after buying it. This is precisely what makes Apple’s iPhone marketing so powerfully effective – Apple isn’t just selling a phone, it’s selling a lifestyle. If you’re selling a service, your messaging should reflect how much easier customers’ lives will be by taking advantage of your service. In this case, increased ease, more time, and less effort are all outcomes that should be emphasized in your marketing.
The Target Audience
You know what you want to sell, but you need to know to whom you want to sell it even more intimately. This is where data comes into play.
You probably already have a workflow in place for determining who your ideal customers are. If so, you’re already taking care of this phase of the product marketing pipeline. If not, it’s time to start, and one of the best places to do so is creating buyer personas.
By creating detailed outlines of your ideal customers, you can target individuals who meet these criteria much more effectively. This is especially true when it comes to advertising on Facebook and Twitter, both of which offer amazingly powerful and highly granular targeting options. The more you know about your ideal customers, the more effectively you can advertise to these people and, ultimately, increase sales.
Expanding Your Reach
Once you know more about the type of people you want to reach with your product, you need to figure out how you’ll actually reach them. Although there are dozens of marketing channels you might focus on, we’re primarily concerned with three: paid search, paid social, and email marketing.
Paid search is an excellent way to expand your reach based on the commercial intent of searchers using Google and Bing. The searcher enters a keyword that’s relevant to your business, your ad is displayed to the user, they click on the ad, and sign up for whatever you’re selling. Of course, the customer journey is often significantly more convoluted than this, but this is the general principle behind PPC. Another benefit of pay-per-click is that it’s extraordinarily cost-effective, if handled correctly – you don’t need an enormous advertising budget to succeed with PPC. Generally speaking, PPC helps you find people who have expressed an interest in what you’ve got to offer.
Paid social, on the other hand, is the best way to expand your reach to people who haven’t expressed an interest in what you’re selling – at least, not actively. So-called identity-based marketing is at the heart of what makes paid social so powerful. Using the data you gleaned during your target audience and buyer demographic research, you can target lookalike audiences based on a dizzying array of criteria, from income level and educational attainment to homeowner status and recreational pastimes.
If you can think of it, Facebook will probably allow you to target it
You can think of PPC and paid social as two sides of the same coin; PPC helps prospective customers find you, whereas paid social helps you find prospective customers.
Depending on what you’re selling, cost will either be a primary part of your marketing messaging, or something that is given very little attention. Going back to our iPhone example, Apple almost never makes pricing information a part of its marketing messaging – Apple instead heavily favors the desirability of its lifestyle branding over pushing a bargain. Apple knows that it can charge pretty much whatever it wants for an iPhone, because invariably, people will pay it.
If, however, you’re selling a product that’s either extremely common or easily obtained, price may be among your competitive advantages. In a wider context, this is what makes discount retailers like Walmart so popular – people know that they can get pretty much anything at the lowest possible price by shopping at Walmart, and the brand’s messaging reflects this.
No retailer flexes more purchasing-power muscle than Walmart.
Image via International Contractors
Only you can determine to what extent pricing features in your marketing. It might play a crucial role in differentiating your product from those of other businesses, or it might not matter at all. However, it’s worth considering this from the perspective of your ideal customer and their desire to solve problems. Are you selling a solution, or are you selling something more?
Product marketing can be complex, but by breaking the principles of product marketing strategy down into individual components, hopefully it’s easier to see how each stage can be applied to your business.