New 4Ps of Marketing Mix for Building a Great Startup
If we look at the startup landscape in India, we will see that majority of startups are building their solutions leveraging the power of Internet and Technology. Was it the same way 40 years back? Answer is simply No. Probably there were no such words like startups, founders and entrepreneurs rather businesses were termed as factories, manufacturing plants and people running the show were called “Seth”. Hope you could relate to this query which was in fashion during those decades of 60s to 90s “Kis Cheej ki factory hai aapki?”
Based on the way business operations were taken care of during those decades, Jerome McCarthy firstly proposed 4Ps (Product, Price, Promotion and Place) aka 3P&D (Product, Price, Promotion and Distribution) of Marketing Mix In 1960 to take business to a next level. The marketing mix was based on producer or manufacturer oriented model. Now it’s 21st Century and the fact is, since India started to witness the emergence of startups in the country, we hardly have manufacturers or producers in startup eco-system. As discussed earlier in this post, majority of startups are building their businesses in such a way where they can be cost-effective, asset light and scalable at faster pace with the help of technology and Internet.
Most of the companies now are into service oriented business models; either they are direct service providers or aggregator of services on single platform. So the question is “Do we need some changes in our marketing mix?” The question is open to all and I must say whatever I am putting down here is my own personal perspectives and may or may not be similar to you. Supporting my statement, can we forget Nokia if we are discussing about the change and innovation? Few years back, it owned the largest market share in cellular or mobile devices in India, but now struggling even for a small chunk of it. I guess you can make out the reasons, failed to bring changes to its products, features and offerings, simply failed to innovate.
I think for now and the years ahead, we should make some changes to our basic 4Ps of Marketing Mix and have something as discussed below.
1. Product: Like cells, it’s the structural and functional unit of any organization and can’t be replaced. But the change is, Products of this age are not limited to tangible items manufactured in a plant followed by the extensive network of distribution channels to reach its end customers. In this advanced technology age where people are using services of several web & mobile applications regularly. For customers, these web & mobile apps are kind of products; they experience, appraise and sometimes scold at it if not working properly. Still there is something which needs to be consolidated in ideating a product or solution that has a great business life and impact.
Before moving further on this pointer (Product), let’s discuss something very closely related to it. There are handfuls of two-wheeler manufacturers in India. They differentiate themselves based on brand image and pricing although product offerings are quite similar. Still knowing the fact that there are thousands of two-wheeler theft cases registered in India, these companies never tried to look into it and bring a solution for this, probably they think like “Agar gaadiyan chori nahi hongi to log fir kharidenge hi kyun?” Now what if a new entrant into this market comes up with an anti-theft solution with an exclusive right to do so, undoubtedly the country will see a great customer shift from the previous manufacturers to the new one.
Point is, it will not be a good idea to get into a something/market which is already overcrowded until or unless you have a strong differentiator or exclusivity in your product. I guess people from IP (Intellectual Property) will agree to this.
2. People: We work with them and work for them. Both are essential and valuable to us. So far as building the right team is concerned, you can refer to Hari T.N’s Linkedin post tips on building awesome team. But for whom we work, who pays for our services, we need to be very supportive and helpful for them. They don’t mind paying extra or premium charges if they see value for money in it or feel privileged. Hence customer satisfaction should be the utmost priority. Once we got a loyal customer base, we can formulate different revenue streams, pricing and premium offerings to take a growth oriented move.
The best example of such strategy can be Google, started back in the year 1998, Google had no revenue model till the time they introduced their advertising platform, Google Adwords to their first 350 paying customers in October, 2000. What they did during the course was commendable. They earned user’s trust through their extremely relevant search results as stated by PC Magazine when it recognized Google as the search engine of choice in the Top 100 sites for 1998.
Adding further, quality of your product and satisfied customers can be the best marketing sources a company. See you would have hardly seen any advertisement of Truecaller, Zara and Whatsapp, still they got a large customer base and counting due to public references.
3. Passion: If Farhan Qureshi of 3 Idiots would not have followed his passion towards Photography perhaps he would have turned out to be the worst engineer. Everyone is bestowed with a unique virtue by the Almighty God. If we do what we love to do, gradually we will succeed into that else we will end up with failure and disappointment in life. Passion gives us happiness, confidence and a rejuvenated feeling every day.
We see people getting into rat race seeing someone’s success in doing something. “Oh he just bagged million dollar of funding doing AI (Artificial Intelligence) based startup, I should also get into it, it’s a hot sector and Investors are investing lots of startups in this sector.” Will this kind of notion work? I guess NO. Here the passion was not about AI based startup rather a temptation of funding. Even such startup got funded somehow, probably will not last so long, as the foundation was laid on temptation not passion.
If we all given a chance to act on TV, almost all of us will be ready to do so. This is because, we all wish to be famous, followed by lots of fans and paid handsomely. It’s an inherited virtue and passion we all have. Years back it was quite difficult, but now we can see how people are turning their passions into reality. Credit goes to Youtube, even pranksters got millions of subscribers and huge revenue through advertising and sponsorship. So identify you and your passion first, and then move accordingly.
4. Perseverance: We got product, people, and passion, although all these are the key ingredients of a successful venture, most of us step back when we are very close to our goals just because of perseverance . There could be no monthly income but we can’t stop monthly expenses. We have responsibilities towards our family. If things don’t get positive in consecutive few months, a feeling of negativity starts cropping up inside based on sympathies and condolences we receive from our well-wishers. We start doubting ourselves and eventually our mind becomes a junkyard filled with lots of trashes.
Is there any other way out? Definitely yes! It’s true that there may be some instances when things will not be in our favor, everything will be going against our plans and strategies, but if we think positively on current situation rather than scratching our head for the past, we will definitely see one or another way out. In the darkness of negativity, we forget what we achieved during the course i.e. learning from mistakes. After running a startup for 3-6 months, we would in possession of a great product, good number of customers and real life business experience.
We can make next attempt with minimum cash burns, as this time neither we have to code the product once again nor have to spend same budget on acquiring customers. We just need to improvising our revenue streams or adding more revenue streams into the system, to get rid of this fiscal challenge which happens mostly with any startup. Airbnb, a company with more than $30 billion valuation today had to face lots of rejections during their early days. For almost a year, they had no revenues and to keep their startup on the move, they sold cereals in humorously designed boxes having Obama and McCain’s sketches printed on it and during elections in 2008. They managed to generate sales of $30000, which they used to fund their business. It takes time and patience to build something great. We just need to do our best every day.
Conclusion: The solutions in the past were related to the problems prevailing at that time. We hardly can solve current problems with the same approach we did few decades back. If we are targeting a major problem impacting millions of lives and got an exceptional solution with exclusive rights on it, sooner or later we will succeed, but if we are copying something merely with intent of funding, sooner or later we are going to face the heat.