Four Elements to Effective Marketing

Professional marketers apply the four elements of value to marketing campaigns. Once you recognize these four elements, you’ll be on your way to successfully marketing your own products and services.

The first element is utility. What’s utility? It basically means the underlying product or service has to be useful to someone. Let’s face it if it wasn’t useful, who would buy it? For example, bottled drinking water has utility. You buy it because it hydrates your body, quenches thirst, and is portable.

The second element is scarcity. This means the product or service has a limited supply or the time to get the product at a certain price is limited. A good example of this is Black Friday. You know, the day after Thanksgiving. If you want to get a good deal on the latest gadget, you have to get to the store at five in the morning because it will be sold out if you wait. By the way, scarcity can be real or just a perception.

The third element is desire or the wish to satisfy a human need like food, clothing, shelter, or companionship. Desire also includes wants which go beyond the necessary life supporting needs. Good marketers convince you that their product or service isn’t a want but actually a need. A good example of this is a pair of shoes. Let’s face it, shoes are a human necessity; however, a $200 pair of shoes isn’t. Good marketers try to convince you it’s worth paying more because of quality, brand name, or some other factor.

The fourth element is known as effective purchasing power. The product or service needs to be obtainable. This means people have the ability to acquire it. A good example of effective purchasing power is the way cars are sold. Automobile dealers typically offer financing. This allows potential buyers to make monthly payments which are less than the total cost of the vehicle. By offering financing, the car is obtainable. If financing wasn’t available, the number of cars sold would drop dramatically.

Marketers spend a lot of time and resources implementing the four elements of value in an effort to get you to buy their product or service. Your success also relies on the application of the four elements of value.

Here’s an example of how these elements are used together by a fast food restaurant. The company spends a lot of money and resources trying to convince you their food will satisfy your hunger (utility). If you want their hamburger, you have to go to their restaurant (scarcity). No other fast food chain makes a hamburger like they do. You see happy, attractive people eating the food in their TV commercials (desirability). The food is affordable (purchasing power).

Marketers of infomercials use the same four elements. The people in these infomercials spend a lot of time trying to convince you their product is useful through product demonstrations. They show you a lot of different ways you can use their product (utility). They also tell you to order now and you will get something else. They’ll throw in more stuff, but you have to act now (scarcity). The marketers imply that you could be happier, healthier, richer, or have more free time if you buy the product. The infomercial also has people who have used the product give testimonials on how great it is (desire). Don’t forget it’s affordable. For just three easy payments of $19.95 plus shipping and handling, you too can own it (purchasing power). When you promote your product or service, remember to apply the four elements of value and your time and resources will be spent wisely.

Author: Joseph Phelon, MBA, CBA is a certified and accredited business appraiser with Hyde Valuations. In addition to providing valuation and appraisal services, he provides public speaking services. He speaks on legal issues concerning valuation topics. He also discusses the economy and tips on buying and selling control and minority ownership interests in privately held businesses. He customizes his remarks for the industry or group that he is addressing. For more information, visit www.superiorvaluations.com