The Many P's of Marketing: Pennies

Marketing has gotten more and more nuanced, as new technologies and strategies have opened up many options for marketers.  It is my contention that today, the marketing mix contains much more than the traditional four or five P's that are taught in school.  In this series I am exploring the Many P's of Marketing.

Pennies: When I got an iPad a while back, I spent the first few weeks learning about the whole "iCulture" created by Apple.

I am talking particularly about apps.  To a Windows boy, born and bred, apps seem an awful lot like programs and software that you could purchase and upload to your computer.  Except that apps are REALLY easy to install and many of them are free or cost mere pennies to purchase.

The success of smart phones and tablets has created a whole new app-based economy.  For literally pennies you can have access to a seemingly endless array of tools, games and features, both utilitarian and frivolous, that can fill your devices memory, and the hours of your day, with "things to do."

The thing that I think is so amazing is the ubiquitous nature of it all.  Long before I had an iPad or smartphone, I knew about Angry Birds and CT5K (couch to 5K, for the uninitiated) training app.  I lusted for apps that I couldn't get with my non-smart phone and Apple-less and Android-less existence.  

The brilliant thing about this app-based world is the ease of entry.  Many apps allow you to try a basic form of the app for free.  You get hooked and then forking over the $2.99 for the upgrade is a no-brainer.  And even though they make just pennies per purchase, the sheer volume of these small purchases has helped some small time developers to make a decent income, at least according to this Newsweek article.  The continued success and eager adoption of each new version of the Apple Operating System (iOS) would seem to indicate that this trend is continuing.

There are two thoughts to ponder for those marketers who don't work for Apple.  The first and more generic thought is the age old axiom that you can deal with only making a few pennies profit per item as long as you can make it up in volume.  The Internet provides an effective and efficient way to reach a huge audience, if you can figure out how to capture peoples imagination.  And their pennies.

The second thought is that it seems more and more important to figure out a way to "app-ify" your marketing plan.  Because smart phones and tablets have become more popular, an increasingly large portion of the marketplace are using these devices as their go to venue to interact with the electronic media.  In 2011, it was estimated that 35 percent of all US adults had a smartphone (83% had a cellphone).  That forecast was up to 45% for 2012, which I think shows the incredible growth of this industry/product/media.

The music industry seems to have done just this.  It wasn't that long ago that if you wanted to purchase a particular song, you had to buy the whole album (really a CD but I am glad we still call them albums.)  Maybe, if you were lucky and the song was released as a single, you could get the song a bit cheaper on an EP.  Now, songs are available for purchase individually.  Your cost to get a particular song you are fond of has gone from $17.99 for the CD to $1.29 or less.  This has had some interesting consequences.  According to an article in Digital Trends, music sales overall rose from 2011 to 2012, but album sales are down.

How a company responds to the app-ification of the marketplace will depend on a lot of factors.  How their decision impacts the company, will depend on the marketplace.  Will we all be rejoicing about pennies from heaven or scratching for pennies?  I don't know for sure.  The crystal ball app I downloaded needs an upgrade to get me the answer.