Nearly every business on the planet sets out with the main objective of making money. This is usually done by manufacturing some form of product, or offering a service, and then charging customers money for it.
Firstly, it is a very rare case where a company can offer a product or service that is truly unique and cannot be provided by anyone else. This means that your business will be competing with other businesses that sell a similar item and you will both be trying to earn money from the same shoppers, who only want to spend their cash once.
Marketing is the primary tool used by modern businesses to draw potential customers to do business with them and not with their competitors. It is a very broad topic that is influenced by a great deal of internal and external variables, but when done right it can be the one business practise that could make or break a corporation.
So where should you start when constructing a marketing strategy for your own company? Well, every situation is different, and each 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 platform.
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 express the fundamental building blocks of any marketing system. It reflects the fact that marketing is not a simple, blunt-edged business tool, but rather a subtle balance of different elements of business functions. It got its name because it is similar to the ingredients list 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 easy for company managers and marketers to quickly associate the elements of marketing to the strengths of their own companies, and by doing so could very rapidly form a tailored and effective marketing strategy. The four P’s are Product, Price, Place and Promotion.
This marketing model is not restricted to tangible goods, services like staining concrete floors can gain from new marketing ideas or a new perspective.
Product
Although every aspect 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 describes the physical product or intangible service that your business will be offering, and at the end of the day it is the reason that buyers are going to spend money with you. If this part is not correctly managed then your organisation will find it hard to make it through.
Many people do not think that marketing has any role 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 production department creates a product for sale and then it is the task of the marketing department to discover ways to sell it, right?
Consider the computer software market as an example. There are many established brands of both operating system as well as software application solutions on 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 assist in this circumstance?
Rather than creating an operating system and then trying to craft a marketing strategy to take on 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 feasible it would be to produce and sell them.
Once your products have been designed and created it is still a vital 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’.
A different form of this part of the marketing mix is called 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 customers as possible. Again, this technique can be applied at all stages of product development.
The car industry uses this technique 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.
“Product is paramount” is one of the main mottos applied in our sunny plants organisation that aims to emphasise to all employees that we expect top quality production.
Price
Another key factor in the marketing mix concerns the price of your products or services. This isn’t a simple case of carrying out market research to figure out the top 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 tool designed to achieve any particular goals your company has.
Whilst it may seem obvious, it’s still worth pointing out that price has always been, and likely always will be, one of the crucial factors that shoppers take into account when they are making a purchase. It is also worth noting that customers do not constantly consider the cheapest price to be the best value. Actually a price that is too low can often turn buyers away.
There are many questions that you need to ask yourself while devising a good pricing plan, key among which are the price sensitivity of your clients, what your competitors are doing and how can pricing maximise your own profits. From a strategy point of view though, pricing can be covered by two primary principals; price skimming and also penetration pricing. These are outlined below.
Price skimming
The principal 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 prepared to spend a premium amount of money to get a product or service early on.
This pricing strategy is frequently used in the consumer electronics industry where customers will often eagerly await the release 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 core of customers that would pay it. By using this method as part of a pre-ordering strategy, a company can help to smooth its own cash flow.
Penetration pricing
Penetration pricing is at the opposite end of the pricing spectrum, and is tailored towards gaining a large market share at a short-term cost so that financial benefits can be made long into the future. It can be a risky strategy, but when used correctly it can setup revenue streams for many years to come. When setting a price for penetration it is still essential to not give a poor impression of your product by aiming for too low a number.
Yet 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 essential to get your pricing technique right.
Grabbing some of the on-line search market is very beneficial, so pick any phrase, such as foil helium balloons and evaluate if that phrase has an ample search marketplace for your purposes.
Place
Place is the component of the marketing mix that’s often overlooked by companies, but it’s still a significant part of selling your product effectively. In a nutshell, it describes the way in which you provide your product to your customer, 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 vast majority of consumer products, this involves the distribution network between your manufacturing plants and shops or other outlets around the country. Since distribution of a physical product costs money it is crucial to determine your own priorities and adapt your distribution network appropriately.
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 distribute their products. By using the Internet as a point of contact (or even as a whole distribution channel in download-based markets such as MP3s) firms are now able to reach out to a huge pool of potential customers.
Promotion
When you mention the word “marketing”, many people instantly think of the promotional aspect 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 instrument, and whilst it might be a costly undertaking it is often an important one.
Advertising is one of the most common forms of promotion. Classically it would be done by posting on billboards, creating short clips for TV and radio or by physically handing out flyers or leaflets to potential customers. With the arrival of the information age we have witnessed a great increase in promotion via e-mail and the Internet, or just as targeted advertising materials posted through your front door.
Another important part of promotion involves branding, which will not necessarily yield more sales directly, but relates back to one of the preliminary purposes of marketing; getting customers to pick your product over those of your rivals.
Putting it into Practise
As previously mentioned each company is unique and will have different marketing needs. By using a mixture of the four P’s discussed above you can take a good view of your own marketing strategy.
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