KeepCups and Popular Penguins: How to apply the four Ps of marketing to your business
Monday, August 18, 2014/
One of the first things marketing undergraduates are taught is the four Ps of the marketing mix.
That’s product: the design and features of what you are selling; place: where you will be selling it; price: how much you want consumers to pay; and promotion: how you plan to tell people about what it is you are selling.
These students will also come across another three Ps in the marketing mix: packaging, positioning and people, but at a basic level, you can develop a successful marketing plan based on the four original elements.
The four Ps can also serve as a template to evaluate how your product or service is going. Do you need to redesign the product or change your distribution model? Are you charging customers too much or too little?
So how do you take this academic concept and apply it to the real world of business? SmartCompany picked two examples of successful home-grown products and found out how their creators answered the four Ps.
If you’ve been to a Melbourne café in the past five years, you’ve almost certainly come across a KeepCup.
Entrepreneur Abigail Forsyth started selling KeepCups at the Melbourne Design Market in 2009. Fast forward five years and Forsyth has now sold four million of the reusable coffee cups in 32 countries. Her company, which she founded with her brother Jamie, is turning over $6 million a year.
Forsyth describes designing the KeepCup—a reusable coffee cup that comes in five sizes—as “a problem to be solved”.
The reusable plastic cup was the first of its kind in Australia, but Forsyth says the design process has been a continual process of “observation, testing and discussion” since launch.
While the cup itself has remained relatively unchanged in five years, Forsyth and her team have made a series of small alterations, including widening the drinking hole in the lid and this year, launching a whole new lid.
The mix of reusable plastics in the cups have also changed over the years, with the cups now made from single component plastic as opposed to multi component.
The company has also recently expanded its product range, launching a range of glassware in recent weeks, which Forsyth says ties in with the company’s move to align itself with the specialty coffee market.
When it comes to finding the right place to sell KeepCups, Forsyth admits the initial take-up of the cups at the Melbourne Design Market was in part due to some “good fortune”.
“It was probably a sign of the times, the design market then was a destination,” says Forsyth, who says five years on, not nearly as many people frequent the big design markets, with many smaller markets popping up to compete.
“If I was doing it now, I would look more at online and try to get grassroots support that way,” she says.
Online sales have always been a part of the mix for KeepCup but Forsyth says it has only been recently that this sales channel has taken off.
Instead, the company has worked hard to develop its direct sales channels, especially with coffee shops and specialty coffee retailers.
“We made it the product first and then we had a bit of a ding-dong about the price,” says Forsyth.
At the Melbourne Design Market, Forsyth originally tried to sell the KeepCups for $8 but her customers asked her if she was crazy.
“They said why don’t you put the price up?” she laughs.
The cups now range between $11 for the smallest, 120mL cup to $18 for the largest, 454mL cup, with variations in price for branded products or the new glass range.
It was a different story when the product was launched in the US, where KeepCups had to compete with the love Americans have of their thermos.
“It was difficult to convince them to buy a quality product made of plastic,” says Forsyth. “Plastic is throw-away there. They think it should be really, really cheap.”
Forsyth says it is also essential to understand price in relation to your business’ sales model.
“If you’re using distributors, you’ll have to sell them the product at about a quarter of the retail price,” she says.
Word-of-mouth has always been KeepCup’s most powerful marketing tool, and that continues to this day, says Forsyth.
“The most compelling ad is when someone is someone using a KeepCup in a café,” she says.
Forsyth says the company has kept its advertising spend to a minimum, instead choosing to focus on generating its own public relations and getting the products into magazines which are looking for content.
But as millions of people now own a KeepCup, Forsyth says the challenge became one of building “top line brand awareness” across the various territories, especially given the emergence of competitors who offer similar products.
To do this, Forsyth says the company is now focused on how people connect with the brand. The cups are no longer just about sustainability, they “say something about you and your enjoyment of coffee”, she says.
When it comes to classic paperback books, the orange Popular Penguins are just about as iconic as you can get. But did you know the range is an Australian creation?
Penguin Australia sales director Peter Blake is the person credited with creating the idea, which has now sold 3.1 million books in Australia and half a million in New Zealand and India combined. There’s now even pink (to raise money for the Jane McGrath Foundation), green (crime classics) and khaki (to commemorate World War I) varieties.
Popular Penguins went on sale in Australia in 2008. Of course Penguin was already a household name in book publishing, both internationally and on Australian shores. And Blake says the series was designed to build on that history.
“The idea was to return to the foundation principles that made Penguin successful and defined the brand—good quality, compelling literature at affordable prices,” he says.
“This return to grassroots leveraged our recognisable brand and history in a way that was appealing to a modern audience.”
There’s no doubt nostalgia played a part in the appeal of the books—the books feature the iconic Penguin livery associated with publisher Allen Lane’s first paperbacks in 1930s—but Blake says the product worked for more practical reasons.
“Their success is attributed to the fact that the books continued, and continue, to solve the problem they were designed for: they are low cost, travel-friendly, enjoyable reads,” says Blake.
The choice of texts to feature in the range was key: from famous Charles Dickens and Jane Austen texts, to more contemporary classics from the likes of Bryce Courtenay and Helen Garner.
“The titles we chose held up against the test of time; some titles were instantly recognisable, others had fallen from the public consciousness, but all could to some degree be described as classics,” says Blake.
“The branding confers on the titles a level of credibility that gives the reader comfort that they are making a good choice and maintaining this high standard in selecting titles was essential,” he says.
The distribution strategy for the titles is also closely tied with the history of the Penguin brand, says Blake.
“The story of Penguin is recorded on each of the series and recounts Allen Lane’s search for a good book at the train station,” says Blake.
“In keeping with the ethos of making good fiction accessible wherever your readers may be, we were keen to make these books available in a number of different retail outlets, not just bookshops but at the local Post Office or supermarket, for example.”
Readers pay just $9.95 for a Popular Penguin and the price has remained unchanged since 2008.
“Affordability and accessibility were key drivers in producing this series and the price point reflects those priorities,” says Blake.
“The price meant that some readers were comfortable making multiple purchases and trying out titles that they might not normally read,” he says.
“The titles are so diverse so the hope was that, while many readers would be attracted by one or two particular books, they might find a treasured book they may never have read if not for the series.”
When it comes to promoting the series, Penguin went all out.
“The series was promoted extensively,” says Blake. “Bespoke point-of-sale at store level was created, and bags produced in the iconic style, as well as ongoing advertising in print magazines, outdoor and through social media.”
And while Blake says the Penguin merchandise with the same branding, including coffee mugs and notebooks, is produced separately to the Popular Penguins range as part of the publisher’s global product range, the awareness it creates of the Penguin brand certainly can’t hurt.