Earlier this evening, Don DiCostanzo ’79, the founder and CEO of Pedego Electric Bikes gave a fantastic talk to our CSUF Entrepreneurship students and community members. Don talked about the importance of branding and how he used the strategies he discussed to grow his businesses from nothing to where it is today.
To start off the talk, Don talked about the Four P’s or marketing (also known as the Marketing Mix): product, price, promotion, and place. For Don, each of these categories is extremely important in its own way and they need to work together. To illustrate the importance of each of the P’s Don used Pedego Electric Bikes as an example (along with some of the other companies that he has founded over the years).
Marketing Mix – Prodcut, Price, Promotion, and Place
For Pedego, the product is pretty obvious: it is the electric bicycles that they produce. Here is a picture of the bikes and a video:
Over the years, Don and his team at Pedego have grown (and trimmed) their product offerings depending on the kind of response they get from their customers. For new products it can be a little more nuanced but Don believes in the importance of listening to customer feedback.
One of the things that I see all too often with new entrepreneurs is that they have a penchant for underpricing whatever it is that they are selling. Basically, they are thinking that if their product and/or service is more expensive than the competition’s then no one will purchase.
That is, obviously, not true. And Don talked about this at some length as well. Pedego’s bikes are electric and, as such, they are going to be more expensive then the average bike that you can get from the bike shop or from the sporting goods store. Don’t be afraid to charge premium prices if you have a premium product (heck, try charging more even if your product is average).
While he did not dwell on this too much, Don made some great points about how technology has revolutionized the way that promotions are done. But all of that has been said before and at much greater length than I’m prepared to go into here.
One great tactic that Don used is something that is certainly worth relating, however. Years back, Don bought a company whose customers were car dealerships. He asked around at the car dealerships in his area to find out what kinds of magazines they subscribed to that were about their industry (i.e. the car dealership industry). Surprisingly, there was none.
So Don and his team decided that they were going to create one obstensibly in order to promote their product but their magazine turned into much more and, he can correct me if I’m wrong here, the magazine and publishing house that they created ended up being profitable on its own.
The moral to this story is that if you can figure out a way to reach your customers that your competition hasn’t figured out yet then you should have a distinct advantage. Figure out where your customers are going for information about your product/service/industry and become a thought leader or figure out a way to control the narrative (or, as was the case with Don, literally create the narrative).
For Pedego, there are multiple places where people can purchase their bikes. Pedego has some brick and mortar stores, they sell online, and, ingeniously, they rent out their bikes in tourist locations.
As I mentioned earlier, Pedego bikes are premium products and, as such, command a premium price. That price can scare off some people but if those same people are able to rent that same bike for a fraction of the purchase price while they are on vacation at the beach then they will certainly do that. And the cool thing here is that after renting the bike, getting comfortable with it while on vacation for a few days at one of sunny Southern California’s many beach locations, those people will go back home and decide to purchase a Pedego for their home.
All of these P’s, a company’s marketing mix in other words, determines how customers interact with companies. Don has used some trial and error but also a lot of entrepreneurial wisdom to figure out what was the best marketing mix for Pedego’s products. And it was a treat to listen to him go through some of the many marketing stories and lessons that he had.