Difference Between Marketing and Promotion
Copyright © Stone Evans, The Home Biz Guy
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.
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.
In the offline world, place is defined by location. On the
Internet, place is defined by domain name and the web hosting
Both online and offline, place can make or break a company
without respect to the quality and value of the product, service
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
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
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, 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
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.
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Reprinted with permission from the Plug-In Profit Site Free Website Builder.