Almost every business on the planet sets out with the main objective of making money. This is generally done by manufacturing some form of product, or offering a service, and then charging people money for it.
Firstly, it is a very rare case that a business can offer a product or service that is truly unique and cannot be provided by anybody else. This means that your enterprise will be contesting 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.
Marketing is the main tool used by modern organisations to draw potential 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 single business practise that could make or break a corporation. Any time spent on marketing will reap benefits, although spending this time correctly can yield extraordinary results.
So where should you begin when constructing a marketing strategy for your own company? Well, each situation is different, and each industry will have its own set of strengths and flaws 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 an expression that is used to express the fundamental building blocks of any marketing system. It demonstrates the fact that marketing is not a straightforward, blunt-edged business technique, but rather a subtle balance of different aspects of business functions. It got its name since it is similar to the ingredients list for a recipe.
The term was later built upon to include the concept 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 associate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly create a personalised and effective marketing system. The four P’s are Product, Price, Place and Promotion.
The “product” element of the four P’s can refer to a product, like painting concrete floors, or any kind of intangible asset being provided for sale by a business.
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 crucial of all. It identifies the physical product or intangible service that your business will be selling, and at the end of the day it is the reason that customers are going to spend money with you. If this element is not adequately managed then your organisation will find it hard to make it through.
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 other way around – your manufacturing department creates an item 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 well-known brands of both operating system as well as software application products 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”.
Rather than creating an operating system and then attempting to craft a marketing strategy to rival the likes of Microsoft and Apple, it would be more effective to look at what sorts of product are desired in the current marketplace, and how feasible it would be to produce and sell them. By being aware of the marketing mix early on in your product development cycle you can prevent business dead-ends at a later stage.
Once your goods have been fashioned and created it is still a vital skill to be able to objectively evaluate your own products to identify the reasons why a customer would buy your product rather than a competitors’.
Another form of this part of the marketing mix is called product variation and is typically used to either lengthen 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 motor industry uses this technique 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 products 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 individual marketing method, our shooting socks company carefully researched exactly what made our products stand out from the masses.
Price
Another important 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 highest price that your customers would pay (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 specific targets your company has. The potential advantages of an effective pricing strategy are surprisingly substantial!
Whilst it may seem obvious, it’s still worth pointing out that price has always been, and probably 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 don’t always consider the lowest price to be the best price.
There are many questions that you need to ask yourself while devising a good pricing strategy, key among 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 however, pricing can be covered by two main principals; price skimming and also penetration pricing.
Price skimming
The main idea driving price skimming is to make as much cash as possible from the sector 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.
This pricing technique is frequently used in the consumer electronics market where customers will often eagerly await the release of a new mobile phone or computer games console. Manufacturers could set nearly 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 tailored towards gaining a large market share at a short-term cost so that monetary benefits can be earned long into the future. It can be a high risk strategy, but when used correctly it can setup revenue streams for many years to come.
Another thing to bear in mind is that “price” is the only 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 create or carry out.
Our company has modified its business website so pork cooking shows up more regularly and more people can find us through search engines.
Place
Place is the part of the marketing mix that is often not addressed by companies, but it’s still a significant part of selling your product successfully. In short, it describes the way in which you provide your product to your customer, and consequently how you collect money from them. It can be a great marketing approach when applied correctly.
The most typical implications of place-based marketing are the physical venues in which your products are sold. For the majority of consumer products, this involves the distribution infrastructure between your manufacturing plants and retailers or other outlets around the world. Since distribution of a physical product costs money it is crucial to identify your own priorities and modify your distribution network appropriately. This is the main use of this element of the marketing mix.
With the growing 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 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.
Promotion
When you mention the word “marketing”, most people instantly think of the promotional aspect of the marketing mix, although as we have seen, this is only one branch of a more comprehensive system. Promotion can be employed 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. 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 customers. With the arrival of the information age we have seen a great increase in promotion via e-mail and the Internet, or simply as targeted advertising material posted through your front door.
Another significant part of promotion involves branding, which will not necessarily yield more product sales directly, but goes back to one of the preliminary purposes of marketing; getting customers to pick your product over those of your rivals. When all other parts of the marketing mix are equal it can be branding that swings a customer’s decision.
Putting it into Practise
As previously mentioned each business is different and will have different marketing needs. By using a mixture of the four P’s discussed above you can take an effective view of your own marketing plan.
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