Practically every business 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 customers money for it. This fundamental theory 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 truly unique and cannot be provided by anybody else. This means that your enterprise 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 money once. So how can you increase the chances of them spending money with you?
Marketing is the main tool used by modern organisations 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 number of internal and external variables, but when done well it can be the single business practice that could make or break a corporation.
So where should you start when creating a marketing strategy for your own business? Well, every situation is different, and every business will have its own set of advantages and weaknesses 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.
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 straightforward, blunt-edged business technique, but rather a subtle balance of different elements of business functions. It got its name because it is similar to the ingredients checklist for a recipe.
The term was later built upon to include the concept of “four P’s” that described the essential elements of the marketing mix. The formalisation of these P’s made it very easy for company managers and marketers to swiftly relate the elements of marketing to the strengths of their own companies, and by doing so could very rapidly create a tailored and effective marketing plan.
Our organisation created a promotional strategy for our own event management services by applying this marketing and advertising mix to identify our marketing advantages.
Product
Whilst every aspect 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 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.
Many 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 typical train of thought very often bears the precise opposite sentiment. Surely it should be the opposite way around - your manufacturing department creates a product for sale and then it is the job of the marketing department to find ways to sell it, right?
Consider the computer software market as an example. There are many well-known brands of both operating system and software application solutions in the market already, and because 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 help in this circumstance?
Rather than creating an operating system and then trying to craft a marketing strategy to take on the likes of Microsoft or Apple, it would be more effective to look at what types 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 fashioned 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 known as product variation and is typically used to either prolong the lifecycle of a product already in the market, or to make your brand new product attractive to as many customers 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 incredibly competitive marketplace. Although these companies may have substantial marketing budgets, the same concepts can be applied to all businesses.
As part of our own marketing plan, our business carefully researched what exactly made our products stand out from the masses.
It is incredibly common to find a large amount of conference production companies who plan for manufacturing and product sales but not properly for marketing.
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 determine the top price that your customers would spend (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 particular targets your business has. The potential benefits of an effective pricing plan are surprisingly large!
Although it may seem obvious, it’s still worth noting 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. In fact a price that is too low can sometimes turn buyers away.
There are many questions that you need to ask yourself while devising a good pricing strategy, key amongst which are the price sensitivity of your customers, what your competitors 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. 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 willing to spend a large amount of money to receive a product or service early on. Not only can this approach yield great financial benefits, but it can also advertise an exclusive and high quality image of your product.
This pricing strategy 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 base 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 monetary rewards can be earned 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.
Yet another thing to keep 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 create or carry out.
“Product is paramount” is one of the main slogans used within our mens shooting socks organisation that aims to point out to all employees that we expect top quality production.
Place
Place is the part of the marketing mix that’s often overlooked by companies, but it is still an important part of selling your product successfully. In a nutshell, it describes the method in which you deliver your product to your consumer, and consequently how you collect money from them. It can be a fantastic marketing technique when applied appropriately.
The most typical ramifications of place-based marketing are the physical venues in which your goods are sold. For the vast majority of consumer products, this includes the distribution network between your manufacturing plants and retailers or other outlets around the world. Since distribution of a physical product costs money it is crucial to determine your own priorities and adjust your distribution network accordingly.
With the growing use of the Internet by your potential customers, marketing methods 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 a complete distribution channel in download-based markets such as MP3s) firms are now able to reach out to a huge pool of possible customers. Effective positioning of your product or service can therefore deliver impressive economic results.
Promotion
When you mention the word “marketing”, many people immediately 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 tool, and whilst it might be a costly undertaking it is often an essential 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 coming of the information age we have witnessed a great increase in promotion via e-mail and the Internet, or simply as targeted advertising materials posted through your front door. The potential for individualised advertising has never been so great.
Another important part of promotion involves branding, which will not necessarily yield more product sales directly, but relates back to one of the preliminary functions of marketing; getting customers to choose your product over those of your rivals. When all other parts of the marketing mix are equal it could be branding that swings a customer’s decision.
Putting it into Practice
As previously mentioned every company is unique and will have different marketing needs. By using a balance of the four P’s discussed above you can take an effective view of your own marketing strategy.
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