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How to build a product placement strategy? Read the following article to have a complete understanding of the 4Ps of Marketing. This article is one from a series of 4 articles. You can also find the other ones on the blog.
12 min read

35% of the startups failed because they can’t find product-market fit. One of the main reasons is a lack of understanding of the 4Ps of marketing: product, price, placement, and promotion. In this article, we will cover the importance of having a product placement strategy.

When do you need a product placement strategy?

You need a product placement strategy when:

  1. you are interested in raising awareness for your brand.
  2. you want to choose a physical location for our business, no matter if it is a store, a restaurant, a coffee shop, or a real estate agency.
  3. you are interested in building a distribution channel.

Why is important?

Having a product placement strategy is a must-have when it comes to scaling a business. Without a clear strategy, developed around your positioning strategy, your brand will not have the necessary traction to scale.

Depending on your business model, and the industry, there can be many reasons why is so important to have a cohesive product placement strategy. We can’t cover all of them in this article, but I will underline the most common ones.

Foot traffic

If a physical location is chosen wisely, can bring a significant amount of foot traffic, without additional investment in marketing. Even if most of the businesses out there have an online presence, in many industries a physical location is still required when it comes to growing a business.

Strategic synergies

When it comes to distribution channels, having a placing strategy can make the difference between failure and success. If you invest the necessary time in researching the market and understanding your clients, you can choose the right distribution channels. This move will allow you to be in front of your ideal customers, to leverage the partners of your distributor, and to strengthen your Brand Positioning Strategy.

Earning trust

Trust is one of the main pillars when it comes to building a Brand. It should be one of the main concerns for every entrepreneur. Trust is very hard to gain and easy to lose. This is why, every entrepreneur should think and different ways of building trust with their customers.

To build trust, you need to constantly deliver on your promise, offer customer support, and address any problem that may appear with your product/service.

Additionally, you can earn trust by placing your product in front of your ideal customer before they even purchase your product.

A research by Google suggests that a buyer needs 7 hours of interaction, across 11 touch points, in 4 separate locations before they make a purchase.

Social proof

By associating your product with public figures, like actors, sports players, or influencers, you can obtain the social proof that your customers need, before trusting in your product. Here, you need to find an important figure, that is representative for your industry, or which has the same values as your business.

Your client will unconsciously transfer the values of the person that represents you, to your product/business.

This is true for so many brands: Messi – with Pepsi; Michael Jordan – with Nike; Rihanna – Fenty.

Raising brand awareness

For this scope, one of the most common marketing tactics is “product placement”. A brand that uses this approach, is constantly looking for opportunities to bring their product in front of big audiences. They usually try to make their product appear in music video clips, movies, or shows. Usually, these placements are made to seem organic, and they are not presented as an ad.

This is also a good way of making it into the mind of your ideal customer, in an unconscious way. Usually, they will pay more attention to the action, and less attention to the props. But they will remain with that product in mind, especially if the scene is memorable.

As an example, think about what car James Bond is driving. Or what beverage Fredy Mercury used to drink on the stage.

Boosting sales

For this objective, usually, the brand placement and associations are done with more established brands, that have a complementary role and share similar Brand Values. Ideally, they should have different customer groups, and this association should help both brands involved to reach new customers. This is not always the case.

This marketing tactic is called “product bundle” and is commonly used in all industries, especially in FMCG (chips and soda), software (Windows and Microsoft Office), auto (car and maintenance plan), etc.

Leveraging your partner’s intangible resources

By choosing your distribution channels wisely, you can leverage the resources of your future partners. For example, if you are planning to start selling your products on Amazon, you can leverage the large amount of traffic that this platform has.

At the same time, if you are planning to open a store in a mall, you also can leverage the foot traffic that the mall has.

How to build a product placement strategy to raise awareness for our brand?

Establish your goal

Choose one of the goals presented above, or, depending on your business model and industry, define yours.

Give this step the necessary attention, because it will be definitory for the success of your marketing activity.

Be clear about your targeted clients

Depending on your objective, you can have in mind your ideal customers, or you may want to try new customer groups. Either way, you need to know for whom is this marketing activity. To learn more, I recommend you to read #6 How to create a Buyer Persona template?.

Be clear about your brand identity

Depending on your brand positioning strategy, you will develop a specific brand identity. Before implementing marketing tactics that can support or disrupt your brand strategy, make sure you have answers to the following questions:

  • What is your unique selling proposition?
  • What are your Brand Values?
  • What is your Brand Personality?
  • What is your Brand Tone and Voice?
  • What is your Brand Manifesto?

You can dive deep into this matter, by reading #10 How to make a brand strategy?

Research potential brand ambassadors

Once you have all of the things mentioned above figured out, you can start researching for potential personalities that can help you boost your brand, or a potential brand with which you can have a synergy.

Look for personalities that are a name in the industry. Also, you can search for influencers, actors, or public personalities that share the same values as your brand.

Usually, it is easier to find complementary brands with whom you can associate and boost sales. Be aware, this can hurt your profitability. Naturally, you will want to make an association with brands that are bigger than yours. They will know that. This will give them leverage in the negotiation process, and they may try to transfer most of the marketing costs to your business, letting them pocket the most of the profit.

To overcome this negotiation barrier, you may try to find 2 or 3 potential brands with whom you can associate, and try to see with whom you can make the best deal.

Making the deal

Before starting any discussion, do your homework. Find out if they have used this type of marketing tactic before. What is the brand they associated with in the past? Did they have a deal with one of your competitors? What values do they have? Did they have been in any social scandal? What distribution channels do they use? Is it possible that this bundled offer to cannibalize any of your actual sales?

Design the ideal deal for your business. Also, take into consideration the worst-case scenario. What is the minimum that you want to obtain, from this deal?

If we are talking about association with actors, musicians, influencers, etc. you need to also think of a way in which your product can be easily integrated with what they are doing. Don’t expect them to know what is better for your brand.

If we are talking about other complementary brands, also think of the process through. What products you will use in this bundle? For whom will be the offer? What will be the distribution channels? What marketing activities you will use to promote this? Etc.

6. Make the proposal

Using LinkedIn, the brand website, or their email, try to reach the decision maker directly. Pitch your idea. Try to present them with the benefits that they might have from this association. Present them with expected costs and expected returns. Also, underline the new customer segments that they can reach through this association.

Align your expectations

If you find an interested actor, musician, influencer, or brand, have a transparent talk about aligning your expectations.

  • What will be the responsibilities of each party?
  • What does success look like?
  • How would you measure success?
  • If you talk with a personality, how will they be paid?
  • What marketing channels will you use?

Measure the results

Using the metrics established at the beginning of the collaboration, measure the results obtained at the end of the marketing activity. How are they compared with the expectation?

Also, do a debrief with the team members who took part in this project.

  • What are the things that went well?
  • What can be improved?
  • What other things can be added in the next project?
  • How each party can improve?
  • What other opportunities did you spot?

How to build a product placement strategy for choosing the right physical location for your business?

Even if we are in a digital era, and all businesses have an online presence, there are still many industries that require a physical presence. If you are the owner of such a business, I will help you in the following paragraph to design the right approach when it comes to physical product placement strategy.

To do it right, you need the following:

Know your industry

It is important to understand who are your suppliers, how hard is to have access to raw materials, and how hard is to find qualified workforce. For some businesses, this information can be one of the main impute, when they choose a physical location. This is true, especially for manufacturers.

Know your competition

This information is relevant for both b2b and b2c activities. Knowing your competition can be used to give you an edge.

It is counterintuitive, but in general, it is better to place your business write beside your competitors.

If we are talking about a production plant, it will be beneficial for you because to be right beside one of your competitors because:

  • You will have access to already-trained people.
  • Most probably, your suppliers will already have delivery routes to this place.
  • You may find new suppliers, and this will be beneficial for your business because it will increase your bargaining power, and decrease the chance of a bottleneck on the supply chain.
  • That specific region will become a hub for the industry, and more clients may be drawn to that place.
    ***This is not true for all types of industries. For example, businesses that have high costs of transportation, like still plants, are usually built in geographical areas where there is no competition.

On the other hand, if we are talking about b2c businesses, can also be beneficial to open a store right beside your competitors. This is true, because:

  • It means that there is already proof of demand in that area. Your business may benefit from the organic foot traffic.
  • Your future clients are already aware of the problem that your product/service can solve for them.
  • More people that have the problem your product addresses, will be drawn to that place because they will know that there is a higher probability to find a satisfying solution to their problem. This is true because there are 2 different businesses that are addressing the same problem.

Understand your clients

This is essential for all business. But, this is more important for businesses that are selling directly to the consumers. In this situation, can also be beneficial to place your business right beside your competitor.

There is an economic principle that can help you better understand how it works. It is called Nash Equilibrium, and you can learn more about it in the following video.

How to build a product placement strategy for developing a distribution channel?

No matter if you are talking about online or offline distribution channels, it is important to have a practical way of developing one. There are many mistakes you can make, that can lead to wasted resources.

To choose a suitable distribution channel for your product, you need to analyze the following factors:

Customers

  • Who are your customers?
  • Where do they live?
  • Where do they shop?
  • They are shopping online?
  • What other products do they use?
  • Where do they get the necessary information?

Competitors

  • What distribution channels your competitors are using?
  • What customer groups do they target?
  • What marketing platforms do they use?
  • What distribution channels do they use?
  • What is the main distribution channel for each of them?

Industry

  • What are the industry norms?
  • What are the industry trends?
  • What are the newcomers in the industry?
  • What technology or information can you use?

Your business strategy

  • What is your brand positioning strategy?
  • What is your competitive advantage?
  • What is your differentiator?
  • What is your main target?
  • Do you have someone in your network that is working on a different point in the distribution channel?

Depending on your business model and industry, there may be additional imputes that you need before making a decision. Don’t skip any steps, and do your due diligence. This is a long-term investment, with the potential for compound returns. Take it step by step, and be patient.

Common mistakes to avoid

  1. Not every personality (actor, musician, influencer) is a right fit for your brand.
  2. Brand association can hurt your brand if done without a strategy. Clients can change their perception of your business.
  3. You don’t need to be on every platform, especially If you don’t have the resources and the necessary competence for this.
  4. Find ways to measure the result of your marketing activities. Otherwise, you will not know if it helps or hurts your business.
  5. When it comes to distribution channels, take into consideration the entry barriers and the distributor’s power of bargaining. We covered this in #2 How to do an industry analysis?

Conclusion

You need to understand how to build a product placement strategy when you want to:

  1. Raise awareness for your brand.
  2. Choose a physical location for our business.
  3. Build a distribution channel.

Depending on your business growth stage, you will need to address at least one of them. In the long term, you will need to work with all of them, to properly grow your business.

Additional resources

The Placement Strategy Handbook

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