Almost every company on the planet sets out with the primary objective of earning money. This is usually 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, though it contains many intricate details.
Firstly, it is a very rare case that a company can offer a product or service that is genuinely unique and cannot be supplied by anyone else. This means that your company will be competing with other businesses that sell a similar item and you will both be trying to make money from the same shoppers, who only want to spend their money once. So how can you improve the chances of them spending money with you?
Marketing is the primary tool used by modern firms to draw potential 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 variables, but when done right it can be the one business practise that can make or break a company. Any time spent on marketing will reap rewards, although spending this time efficiently can yield incredible outcomes.
So where should you begin when creating a marketing strategy for your own business? Well, each situation is different, and each business 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 corporation to be used as a marketing platform. It is called the “Marketing Mix”.
The Marketing Mix
The marketing mix was a term that was first coined during the 1950′s and is a phrase that is used to describe the fundamental building blocks of any marketing strategy. It demonstrates the fact that marketing is not a simple, blunt-edged business technique, but rather a delicate balance of different elements of business operations. 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 critical elements of the marketing mix. The formalisation of these P’s made it very clear for business managers and marketers to quickly relate the elements of marketing to the strengths of their own companies, and by doing so could very rapidly form a customised and effective marketing plan. The four P’s are Product, Price, Place and Promotion.
The “product” aspect of the four P’s can pertain to a product, just like chiropractors Nottingham, or any kind of intangible asset being offered for sale by a business.
Product
Whilst every element of the marketing mix is a requirement, the “product” element mentioned as one of the four P’s is possibly the most crucial of all. It identifies the physical product or intangible service that your company will be offering, and at the end of the day it is the reason that customers are going to spend money with you.
Many people don’t think that marketing has any place to play when it comes to the physical product that your company is selling. In fact, the common train of thought very often bears the precise 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 necessarily the case.
Take the computer software market as an example. There are many well-known brands of both operating system as well as software application products on the marketplace already, and since 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 developing an operating system and then attempting to craft a marketing strategy to rival the likes of Microsoft and Apple, it would be far more effective to look at what sorts of product are sought after in the current marketplace, and how viable it would be to manufacture and sell them.
Once your goods have been designed and created it is still a vital skill to be able to objectively evaluate your own products to identify the reasons that a customer should buy your product rather than a competitors’. The skill is called product differentiation and forms one of the basic skills of the product part of the marketing mix cake.
A different form of this part of the marketing mix is called product variation and is generally used to either prolong the lifecycle of a product currently in the market, or to make your 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 different engines, trim packages and interior options with the cars that they offer. They use the marketing mix to great effect to sell their own products in an extremely competitive marketplace. Although these companies may have huge marketing budgets, the same principles can be applied to all companies.
With the rise of the Internet and e-commerce organisations find their sitesincluding Maytag bottom freezer refrigerators might be utilised as a direct sales channel and distribution system.
Price
Another key factor in the marketing mix relates to the price of your products or services. This isn’t a simple case of performing market research to figure out the highest price that your customers would spend (although that can be a useful tool to use), but rather making use of the price of your products as a strategic weapon designed to achieve any particular targets your business has. The potential benefits of an effective pricing plan are surprisingly substantial!
Whilst it may seem obvious, it is still worth noting that price has always been, and likely always will be, one of the crucial factors that customers take into account when they are making a purchase. It is also worth noting that customers don’t constantly consider the lowest price to be the best value.
There are many questions that you need to ask yourself when devising a good pricing strategy, key among 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 however, pricing can be covered by two primary principals; price skimming and penetration pricing. These are outlined below.
Price skimming
The principal idea behind price skimming is to make as much money as possible from the segment of the market which is price-insensitive and are going to be prepared to spend a large amount of money to receive a product or service early on.
This pricing technique is very often 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 almost any price they wanted to and there would still be a loyal core of customers that would pay it.
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 financial benefits can be earned long into the future. It can be a risky strategy, but when used correctly it can setup revenue streams for many years to come.
Another thing to keep in mind is that “price” is the one 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. So it is even more vital to get your pricing strategy right.
SEO firms are more common these days and our business employed them to have cooking times a prominent key phrase for our website to attract more customers.
Place
Place is the portion of the marketing mix that’s often disregarded by companies, but it’s still an important part of selling your product successfully. In short, it describes the way in which you provide your product to your consumer, and subsequently how you collect money from them. It can be a fantastic marketing approach when applied correctly.
The most typical implications of place-based marketing are the physical locations in which your products are sold. For the majority of consumer products, this includes the distribution network between your manufacturing centres and shops or other outlets around the world. Since distribution of a physical product costs money it is important to identify your own priorities and alter your distribution network accordingly.
With the increasing use of the Internet by your potential customers, marketing techniques have had to take into account how they use the Internet to help deliver their products. By using the Internet as a point of contact (or even as a complete distribution route in download-based markets such as MP3s) firms are now able to reach out to a huge pool of possible customers. Effective placing of your product or service can therefore yield impressive financial results.
Promotion
When you say the word “marketing”, many people immediately think of the promotional side of the marketing mix, although as we have seen, this is merely 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 can be an expensive undertaking it is often an important one. The primary concern of promotion is to deliver a certain message that will improve sales.
Advertising is one of the most common 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 customers. With the coming of the information age we have seen a great increase in promotion via e-mail and the Internet, or simply as targeted advertising materials posted through your door. The potential for individualised advertising has never been so good.
Another significant part of promotion involves branding, which may not necessarily yield more sales directly, but relates 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 can be branding that swings a customer’s choice.
Putting it into Practise
As previously mentioned each business is different and will have different marketing requirements. By using a mixture of the four P’s reviewed above you can take a good view of your own marketing strategy.