Understanding the Difference between Marketing & Promotion

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.

PRODUCT

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.

PLACE

In the offline world, place is defined by location. On the 
Internet, place is defined by domain name and the web hosting 
service chosen.

Both online and offline, place can make or break a company 
without respect to the quality and value of the product, service 
or idea.

PRICE

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 people.

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 our 
product.

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

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 
dollars.

HEADS UP!

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.