The New "Normal": Managing the Four P's in a Down Economy

The likelihood of a sustained economic downturn is revising our definition of "normal." Smart companies are revisiting all of the 4 P's to refresh their market strategy.  Here are some ideas we've seen in action or heard on the grapevine:

Product: That big blockbuster product that's under developmenthttp://media.emm.adhost.com/adhost_5377. is this the right market to launch it into?  Maybe not!  If customers can't afford your current products, a new one can be successful in the market only if it's tailored to today's pain points.  Fire up that Voice-of-the-Customer (VoC) process to get more in touch with your market!  (We shared some budget-friendly research tips in last October’s Pivot Point.)  While some customers are able to still grow their businesses, practically all will be interested in products and features that reduce cost of ownership or cost of operation.

Price: Much has been said about pricing.  (See the Resources section for more tips from our favorite pricing experts.)  Make it easy for people to get what they can afford, but don't lower the prices on your main products!  Do not let anyone convince you that top-line revenues are more important than profits.  Maintaining margins is critical - that's where the money comes from for both ongoing operations and future R&D.  Sell value; add services.

Place: Not only might this be a good time to revisit your channel strategy, you might be forced to do so if your channel partners are going out of business.  Look for opportunities to weed out underperformers, build stronger relationships with your best channel partners, and make other strategic changes that would otherwise be difficult. Working with indirect or retail channels? Don't forget a VoC program directed at them to keep up with current conditions.

Promotion: Are you having a hard time getting prospects' attention?  Link your solution to their strategic initiatives.  If there is no linkage, but you know your solution will produce value, provoke your customers (scroll down to the Resources section for more on this thought-provoking concept).  Do more testing with marketing messages and vehicles - what worked yesterday isn't what will work today, and possibly not tomorrow. Measure, measure, measure!

For more tips on updating your strategy, take this month’s 30-second Hot Button survey and request your copy of “The New Normal” Product Planning Guide.