(Well, I just had to make that joke at some point.)
I didn’t finish my college degree until I was a working adult. When I did go back to finish I selected a program in eBusiness, all the rage at the time. None of my prior education was business oriented, so I was happy to go back and learn all the basics of business. However when I saw that every student was required to take a marketing course, I was…. well, concerned. I didn’t care about advertising.
What I didn’t understand is that marketing does not equal advertising. Advertising, or promotion, is only one part of marketing. The definition of marketing that I like is:
The management process through which goods and services move from concept to the customer.
That isn’t part of business, that IS business. It’s what we do even in WoW when we undertake serious gold earning whether or not we realize it.
The Four Ps
Basic marketing courses break the overall marketing process into four parts, called the four Ps:
- Product — defining exactly what you wish to sell and how you will produce it.
- Price — determining the right price, including volume pricing, discounts, terms, etc.
- Promotion — communicating with potential customers to raise awareness and interest in your product.
- Place — how or where you will actually perform sales transactions with customers. (Not the best name, but they needed it to start with P. Think “distribution”.)
Each of the four Ps is interrelated — for example how you produce the product effects the price, and the price might effect who you want to promote the product to, etc. Modern formulations try to be more “customer focused” by changing product to customer or service, promotion becomes communication, place becomes convenience, etc. But for our purposes it’s all the same idea.
When you read about a gold earning idea one way to start to break it down, evaluate and understand it is to identify the four Ps within it. This is a great way to start creating your business process activities and figuring out if there are any gaps in the plan. Let’s see how this applies to you in WoW by evaluating the four Ps of one gold earning market people love to recommend and write about: mysterious fortune cards.
Well the first P is easy, right? The product is mysterious fortune cards: all done. Not so fast speedy — you need to define exactly how you will obtain the product. For cards you would have two choices: make them or buy them. You would then break each of those options down further to evaluate them. What materials are required to make them, and where would you get the materials? Where or from whom would you buy cards to resell? You could even consider if you should sell cards only or make some of them into Fortune Cookies, where buyers would get stat food and a chance to win gold.
Pricing mysterious fortune cards optimally is not as easy as it might seem. Obviously you need to know how much it will cost you to make or buy them. But then you need to test or guess what price people would pay that would maximize your profit, because presumably the higher the price, the lower the volume will be. Also, when you think about price, think about the quantity or quantities you want to sell in. Do you want to sell single cards or stacks of 200? Finally of course, what is the competition pricing at? You’ll probably want to do some test marketing and adjust your prices based on your results.
In some ways there isn’t a lot of promotion in WoW. A lot of the time the only promotion I do is to list an item on the auction house — that’s promotion, it how I communicate to my buyers. Many of the fortune card advocate out there suggest that more promotion than that is required to maximize the potential of card selling. By “barking” in trade channel and either selling directly to players, or just using trade to advertise listings on the auction house, they instill interest in buyers who might not otherwise look for cards.
Finally there is place. Again, in most cases for me I sell things on the auction house. But you might find it more effective to deliver fortune cards to players in person. Or who knows, selling outside the capital cities might be worth doing, especially if you are selling cookies. Perhaps you could start a COD business — card of the day club anyone?
It’s too bad this concept is so wordy, because it is easier to apply it than it is to explain it. I hope the wonky-ness of this doesn’t turn you off from trying it mentally the next time you read about a potential new product to sell. It is a powerful concept that can help you make sure you are getting the most from your gold earning ideas.