Nearly every company on the planet sets out with the primary objective of making money. This is generally done by producing some form of product, or offering a service, and then charging people money for it. This fundamental principle is fairly straight-forward, although it contains many intricate details.
First of all, it is a very rare case where a company can offer a product or service that is truly unique and cannot be supplied by anyone else. This means that your company will be contesting with other businesses that sell a similar item and you will both be trying to earn money from the same customers, who only want to spend their money once.
Marketing is the main tool used by modern organisations to draw prospective customers to do business with them and not with their rivals. It is a very broad topic that is influenced by a great number of internal and external variables, but when done well it can be the one business practice that can make or break a company. Any time spent on marketing will reap rewards, although spending this time correctly can yield extraordinary outcomes.
So where should you start when constructing a marketing strategy for your own business? Well, every situation is different, and every business will have its own set of advantages and flaws that must be taken into consideration, but there is a marketing principle that can be applied to almost any corporation to be used as a marketing framework. It is known as the “Marketing Mix”.
The Marketing Mix
The marketing mix was a term that was first coined during the 1950’s and is an expression that is used to describe the fundamental building blocks of any marketing system. It demonstrates the fact that marketing is not a straightforward, blunt-edged business tool, but rather a subtle balance of different aspects of business operations.
The term was later built upon to include the idea of “four P’s” that described the critical elements of the marketing mix. The formalisation of these P’s made it very clear for business managers and marketers to swiftly relate the elements of marketing to the strengths of their own companies, and by doing so could very quickly create a personalised and efficient marketing system.
The “product” aspect of the four P’s could refer to any service, just like conference production company, or any kind of intangible service being offered for sale by a company.
Product
Although every element of the marketing mix is a necessity, the “product” element mentioned as one of the four P’s is possibly the most critical of all. It identifies the physical product or intangible service that your company will be selling, and at the end of the day it is the reason that customers are going to spend money with you.
Several people do not think that marketing has any place to play when it comes to the physical product that your business is selling. In fact, the common train of thought very often bears the exact opposite sentiment. Surely it should be the other way around – your manufacturing department creates an item for sale and then it is the job of the marketing department to find ways to sell it, right? This is not always the case.
Consider the computer software market as an example. There are many well-known brands of both operating system and software application products on the marketplace already, and since the market is relatively well saturated it would be incredibly tough (and expensive) to “take on the big boys”. So how can the principles of the marketing mix assist in this circumstance?
Rather than creating an operating system and then attempting to craft a marketing strategy to take on the likes of Microsoft or Apple, it would be far more effective to look at what types of product are desired in the current marketplace, and how feasible it would be to produce and sell them.
Once your goods have been designed and created it is still a critical skill to be able to objectively evaluate your own products to recognise the reasons that a customer should buy your product rather than a competitors’. The technique is called product differentiation and is one of the fundamental skills of the product part of the marketing mix pie.
A different form of this part of the marketing mix is known as product variation and is typically used to either extend the lifecycle of a product currently in the market, or to make your brand new product attractive to as many consumers as possible.
The car industry uses this approach very effectively by offering various engines, trim packages and interior options with the cars that they sell. They use the marketing mix to good effect to sell their own goods in an extremely competitive marketplace. Whilst these companies may have huge marketing budgets, the same concepts can be applied to all businesses.
As part of our individual promotion method, our business very carefully researched exactly what made our products stand out from the crowd.
Marketing plays a key role within a business plan and shouldn’t be treated as an afterthought.
Price
Another key factor in the marketing mix relates to the price of your products or services. This is not a simple case of carrying out market research to figure out the highest price that your customers would pay (although that can be a handy tool to use), but rather making use of the price of your products as a strategic weapon designed to achieve any specific targets your company has.
Although it may seem obvious, it is still worth pointing out that price has always been, and likely always will be, one of the key factors that shoppers take into account when they are making a purchase. It is also worth noting that customers don’t always consider the lowest price to be the best price.
There are many questions that you need to ask yourself when devising a good pricing plan, key amongst which are the price sensitivity of your clients, what your rivals are doing and how can pricing boost your own profits. From a strategy point of view though, pricing can be covered by two primary principals; price skimming and also penetration pricing.
Price skimming
The main idea behind price skimming is to make as much money as possible from the sector of the market which is price-insensitive and are going to be willing to spend a premium amount of money to receive a product or service early on. Not only can this technique yield great financial benefits, but it can also promote an exclusive and high quality image of your item.
This pricing strategy is very often used in the consumer electronics market where customers will often eagerly await the release of a new mobile phone or computer games console. Makers could set almost any price they wanted to and there would still be a loyal base of customers that would pay it. By making use of this method as part of a pre-ordering strategy, a company can help to smooth its own money flow.
Penetration pricing
Penetration pricing is at the other end of the pricing spectrum, and is geared towards gaining a large market share at a short-term cost so that monetary rewards can be made long into the future. It can be a high risk strategy, but when used correctly it can create revenue streams for many years to come. When establishing a price for penetration it is still essential to not give a poor impression of your product by aiming for too low a figure.
Another thing to keep in mind is that “price” is the one part of the marketing mix that will generate income for a business. The other members of the four P’s will all cost money to produce or undertake.
Our organisation has modified its company web site so DVDs for children appears very frequently and more people can find us through search engines.
Place
Place is the part of the marketing mix that’s often disregarded by companies, but it’s still a significant part of selling your product effectively. In short, it describes the way in which you deliver your product to your consumer, and consequently how you receive money from them.
The most typical ramifications of place-based marketing are the physical venues in which your goods are sold. For the majority of consumer products, this includes the distribution network between your production centres and retailers and other outlets around the country. Since distribution of a physical product costs money it is crucial to identify your own priorities and adapt your distribution network accordingly. This is the primary application of this element of the marketing mix.
With the growing use of the Internet by your potential customers, marketing strategies have had to consider how they use the Internet to help distribute their products. By using the Internet as a point of contact (or even as an entire distribution channel in download-based markets such as MP3s) companies are now able to reach out to a huge pool of possible customers.
Promotion
When you say the word “marketing”, most people instantly think of the promotional aspect of the marketing mix, although as we have seen, this is merely one branch of a more complete system. Promotion can be employed on a very individual basis or as a mass communication instrument, and whilst it can be a costly undertaking it is often an essential one.
Advertising is one of the most typical forms of promotion. Classically it would be done by posting on billboards, creating short clips for TV and radio or by physically distributing flyers or leaflets to potential customers. With the arrival of the information age we have seen a great increase in promotion via e-mail and the Internet, or just as targeted advertising materials posted through your front door.
Another significant part of promotion involves branding, which will not necessarily yield more sales directly, but goes back to one of the preliminary functions of marketing; getting customers to choose your product over those of your rivals. When all other pieces of the marketing mix are equal it could be branding that swings a customer’s choice.
Putting it into Practice
As previously mentioned every company is unique and will have different marketing needs. By using a mixture of the four P’s reviewed above you can take a good view of your own marketing strategy.
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