We have all heard of the 7P’s of marketing mix: Product, Price, Promotion, Place, People, Process and lastly Physical Evidence. However, very few in the franchise business marketplace understand that the marketing mix hold a close relation to its business operation and may affect the running of the franchise business. Today we will reflect on why and how franchise owners can apply the 7P’s of the marketing mix into their franchise business and eco-system.
1.Product
In any franchise business, most of us will agree that we need a specialized product if it is tangible and services, if intangible – to spearhead and lead the franchise business. A product that speaks to the consumer with a whole different level will cater not only to their needs but satisfy their wants as well.
Many franchise owners fail to understand the basic importance of product and service specialization before sealing the approval to run the proposed franchise business. A great product or service, complemented with a good marketing platform is what separates the franchise market leader and the copycats. Many franchise wannabes can easily copy a product but it is the ideas and concepts of marketing the product or service that makes the product or service stand out in the market.
Consumers today have easy access to an abundance of information, easing them in the process of understanding what they want and subsequently possessing the knowledge to compare genuine products from the counterfeits.
2. Price
Franchise business owners should understand that all of their pricing strategies have to take in consideration the stages of their product in the product life cycle. For example, during the introductory or market penetration stage, it will not be wise to have a high pricing strategy. A common mistake is that franchise owners set the prices of their product directly in comparison with their competitors.
A good pricing strategy should not be developed by taking competitors as a grid but will need to go past the surface in working out the costs and profit margin for the long-run. Even though franchise chain businesses have the advantages to price their product or service slightly higher, it is not advisable without a thorough research of the market with implementation of proper costing being carried out.
3. Promotion
This is one aspect that is very relevant and also one that a lot of franchise business owners fail to neither execute nor leverage the franchise business to their advantage. Advertising and promotion (A&P) is usually included in the royalty fee collected from the franchisees, which are then used to execute comprehensive A&P campaigns. Hence, the formation of a long-sustaining, full-fledged marketing plan should be in place and ready to be executed in order to be able to create customer brand loyalty.
4. Place
Location, location, location… Franchise business owners have to understand that to remain in the game and to excel in it, they need to be acumen in identifying and determining the location of their outlet set-up.
Even if a product or service has specialized features, a sound pricing strategy and a superb marketing campaign in-line; the franchise business will have little chance of success if the choice of location is wrong. So often, many franchise establishments that excel in one location fail miserable in another location. Thus, the importance of site selection requires in-depth observation and study on its geographical location and the demographics within cannot be ignored.
5. People
Firstly, the most difficult part of selecting the right people is the ability to find candidates with the right aptitude. Secondly, it is important for franchise owners to realize the importance of providing necessary and proper trainings as their employees’ progress in their career. This is to empower employees in terms of confidence so that they may be able to perform effectively and efficiently within their job scope.
Lastly, franchise owners must possess the ability to share and communicate their vision with their employees, guiding them in their mission to achieve set common goals of the franchise establishment. Employees who are satisfied with their jobs and the opportunities given will be able to outshine in their performance.
Hence, happy employees are more motivated in providing better customer service. There are countless franchise owners out there that only do hiring, placing their people in the outlet without providing opportunities to grow. Franchise owners need to understand that their customers’ positive or negative experiences of the brand are associated with how they are being treated by the frontline people. Customer service becomes a reflection of the franchise establishment’s image. So, please watch out!
6. Process
Process in the context of franchise is very straight-forward and can be summed up as standard operation procedures. It covers the uniformity or the DNA of the whole franchise structure: from the internal culture of the franchise brand to their external customer loyalty programme – all outlined, documented and executed. The system will have a set of standard operation procedures that clearly and precisely instruct the franchise entity on operation know-how with a step-by-step procedure, ensuring that everything operates smoothly and consistently across the whole franchise chain.
Franchise owners need to have this system meticulously constructed before offering their franchise to the potential franchisee. Therefore, those franchise owners who consistently modify to ensure that the systems are functioning and executed properly have a better chance in succeeding in this highly competitive industry.
7. Physical evidence
Physical evidence is undeniably plays a major role in the marketing mix. Many international market leaders spend hundreds of millions in research and development and in conducting market research in order to understand consumer behavior better.
Physical evidence will be the final draw that will break or make the franchise brand because franchise owners have to understand that a bad customer experience will most likely not secure a second visit to the franchise establishment, much less developing customer loyalty. However, if franchise owner understands and is proactive in ensuring that customer service is being well managed, then rest assured that the franchise establishment will be rewarded with unprecedented customer loyalty in the long-run.
In conclusion, franchise owners do not need to look too far for guidance but by applying the Franchise 7P’s, success will be within range and achievable. Rather than focusing solely on the complexity of the business’ internal management, franchise owners must be able to envision beyond that to ensure long-term sustainability and venture out globally.
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