Nearly every company on the planet sets out with the primary objective of making money. This is usually done by producing some form of product, or offering a service, and then charging customers money for it. This fundamental theory 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 enterprise will be contesting with other businesses that sell a similar product and you will both be trying to make money from the same customers, who only want to spend their cash once. So how can you boost the chances of them spending money with you?
Marketing is the primary tool used by modern firms to draw prospective customers to do business with them and not with their competitors. It is a very broad topic that is affected by a great deal of internal and external factors, but when done well it can be the one business practice that could make or break a corporation. Any time spent on marketing will reap rewards, although spending this time correctly can yield extraordinary outcomes.
So where should you begin when constructing a marketing strategy for your own company? Well, each situation is different, and every industry will have its own set of advantages and weak points that must be taken into consideration, but there is a marketing rule that can be applied to almost any company to be used as a marketing framework. It is known as the “Marketing Mix”.
The Marketing Mix
The marketing mix was a phrase that was first coined during the 1950′s and is a phrase that is used to express the fundamental building blocks of any marketing strategy. It reflects the fact that marketing is not a simple, blunt-edged business tool, but rather a delicate balance of different aspects of business functions. It got its name because it is similar to the ingredients checklist for a recipe.
The term was later developed to include the idea of “four P’s” that described the essential elements of the marketing mix. The formalisation of these P’s made it very clear for company managers and marketers to swiftly relate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly create a tailored and effective marketing system. The four P’s are Product, Price, Place and Promotion.
This marketing model is not restricted to physical items, services such as conference production may benefit from fresh marketing ideas or a new point of view.
Product
Whilst every element of the marketing mix is a requirement, the “product” element mentioned as one of the four P’s is perhaps 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 buyers are going to spend money with you. If this element is not correctly managed then your company will find it hard to survive.
Several people do not think that marketing has any role to play when it comes to the actual product that your business is selling. In fact, the typical train of thought very often bears the exact opposite sentiment. Surely it should be the other way around – your manufacturing department creates a product for sale and then it is the task of the marketing department to discover ways to sell it, right?
Take the computer software market as an example. There are many established brands of both operating system as well as software application solutions in the marketplace already, and because the market is fairly well saturated it would be very tough (and expensive) to “take on the big boys”. So how could the principles of the marketing mix help in this situation?
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 more effective to look at what sorts of product are sought after in the current marketplace, and how feasible it would be to manufacture and sell them. By being mindful of the marketing mix early on in your product development cycle you can prevent business dead-ends at a later time.
Once your products have been fashioned and created it is still a vital skill to be able to objectively review your own products to recognise the reasons why a customer would 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 cake.
Another form of this part of the marketing mix is known as product variation and is typically used to either lengthen the lifecycle of a product currently in the market, or to make your brand new product attractive to as many consumers as possible. Once again, this technique can be applied at all stages of product development.
The car industry uses this approach very effectively by offering various engines, trim packages and interior options with the cars that they offer. They use the marketing mix to good effect to sell their own goods in an extremely competitive marketplace. Whilst these companies may have substantial marketing budgets, the same principles can be applied to all companies.
As part of our own promotion method, our business very carefully researched exactly what made our goods stand out from the crowd.
“Product is paramount” is one of the slogans used in our event management business which tries to emphasise to all staff that we expect high quality production.
Price
Another important factor in the marketing mix concerns the price of your products or services. This is not a simple case of carrying out market research to figure out the top 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 business has. The potential advantages of an effective pricing strategy are surprisingly substantial!
Although it may seem obvious, it is still worth pointing out that price has always been, and probably always will be, one of the key factors that customers take into account when they are making a purchase. It is also worth noting that customers don’t always consider the cheapest price to be the best price. In fact a price that is too low can often turn customers away.
There are many questions that you need to ask yourself while devising a good pricing plan, key amongst which are the price sensitivity of your clients, what your rivals are doing and how can pricing maximise your own profits. From a strategy point of view though, pricing can be covered by two main principals; price skimming and penetration pricing. These are outlined below.
Price skimming
The main idea driving price skimming is to make as much money as possible from the sector of the market which is price-insensitive and will be prepared to spend a premium amount of money to receive a product or service early on. Not only can this approach yield excellent economic benefits, but it can also advertise an exclusive and high quality image of your item.
This pricing strategy is frequently used in the consumer electronics market where customers will often eagerly await the launch of a new mobile phone or computer games console. Makers could set nearly any price they wanted to and there would still be a loyal base of customers that would pay it. By using this method as part of a pre-ordering strategy, a firm can help to smooth its own money flow.
Penetration pricing
Penetration pricing is at the other end of the pricing spectrum, and is tailored towards gaining a large market share at a short-term cost so that financial rewards can be made long into the future. It can be a high risk strategy, but when employed correctly it can create revenue streams for many years to come. When setting a price for penetration it is still important to not give a poor impression of your product by aiming for too low a number.
Yet another thing to bear in mind is that “price” is the only part of the marketing mix that will generate earnings for a business. The other members of the four P’s will all cost money to produce or undertake.
To optimize our website for google marketing we selected buying sunny plants as an aimed key phrase since it relates to our business and what we do.
Place
Place is the part of the marketing mix that is often disregarded by companies, but it is still an important part of selling your product successfully. In short, it describes the method in which you deliver your product to your customer, and subsequently how you collect money from them. It can be a great marketing approach when used correctly.
The most common ramifications of place-based marketing are the physical locations in which your goods are sold. For the majority of consumer products, this involves the distribution network between your manufacturing plants and shops 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 appropriately. This is the primary application of this part of the marketing mix.
With the increasing use of the Internet by your potential customers, marketing techniques have had to consider how they use the Internet to help deliver their products. By using the Internet as a place of contact (or even as an entire distribution route in download-based markets such as MP3s) companies are now able to reach out to a large pool of potential customers.
Promotion
When you mention the word “marketing”, many people immediately think of the promotional side of the marketing mix, although as we have seen, this is only one branch of a more comprehensive system. Promotion can be used on a very individual basis or as a mass communication tool, and whilst it might be a costly undertaking it is often an essential one. The key concern of promotion is to deliver a specific message that will increase sales.
Advertising is one of the most typical forms of promotion. Typically it would be done by posting on billboards, producing short clips for TV and radio or by physically distributing flyers or leaflets to potential buyers. With the coming of the information age we have seen a great increase in promotion via e-mail and the Internet, or just as targeted advertising material posted through your door. The potential for individualised advertising has never been so good.
Another important part of promotion involves branding, which will not necessarily yield more product sales directly, but goes back to one of the preliminary functions of marketing; getting customers to choose your product over those of your competitors. When all other pieces of the marketing mix are equal it could be branding that swings a customer’s decision.
Putting it into Practice
As previously mentioned each company is different and will have different marketing requirements. By using a mixture of the four P’s discussed above you can take an effective view of your own marketing strategy.
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