Almost every business on the planet sets out with the primary objective of making money. This is generally done by producing some form of product, or offering a service, and then charging people money for it. This fundamental theory is fairly straight-forward, although it contains many specific details.
First of all, it is a very rare case that a business can offer a product or service that is truly unique and cannot be supplied by anyone else. This means that your company will be contesting with other businesses that sell a similar product and you will both be trying to earn money from the same shoppers, who only want to spend their cash once. So how can you increase the chances of them spending money with you?
Marketing is the primary tool used by modern businesses to draw prospective customers to do business with them and not with their rivals. It is a very extensive topic that is influenced by a great deal of internal and external variables, but when done well it can be the single business practice that can make or break a company. Any time spent on marketing will reap rewards, although spending this time efficiently can yield extraordinary outcomes.
So where should you begin when constructing a marketing strategy for your own business? Well, every situation is different, and every company 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 framework. It is called the “Marketing Mix”.
The Marketing Mix
The marketing mix was a term that was first coined in the 1950′s and is a phrase that is used to describe the fundamental building blocks of any marketing system. It demonstrates the fact that marketing is not a simple, blunt-edged business technique, but rather a delicate 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 developed 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 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 quickly create a customised and effective marketing system.
Marketing is a global business idea and could be applied to cotton bedding products as well as almost any amount of other products and services.
Product
Although 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 business 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 part is not correctly managed then your organisation will find it hard to survive.
Many people don’t think that marketing has any role to play when it comes to the actual 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 opposite way around – your production department creates an item 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 established brands of both operating system and software application products in the marketplace already, and since 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 or Apple, it would be more effective to look at what types of product are desired in the current marketplace, and how viable it would be to produce 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 stage.
Once your goods have been designed and created it is still a vital skill to be able to objectively review your own products to identify the reasons that a customer would buy your product rather than a competitors’.
A different form of this part of the marketing mix is known as product variation and is generally 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.
The car industry uses this approach very effectively by offering different engines, trim packages and interior options with the cars that they sell. They use the marketing mix to good effect to sell their own goods in an incredibly competitive marketplace. Although these companies may have substantial marketing budgets, the same principles can be applied to all companies.
We do not have a distinct marketing division within our own xbox hard drive price operation though several of our own managers have been able to adopt marketing as part of their job function.
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 determine the top price that your customers would spend (although that can be a useful tool to use), but rather using the price of your products as a strategic weapon designed to achieve any particular targets your company has. The potential advantages of an effective pricing strategy 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 key factors that shoppers 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 competitors 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 also penetration pricing.
Price skimming
The principal idea driving 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 receive a product or service early on. Not only can this approach deliver great economic advantages, but it can also promote an exclusive and high quality image of your item.
This pricing technique 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. Manufacturers 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 company can help to smooth its own cash 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 monetary benefits can be earned long into the future. It can be a risky strategy, but when employed correctly it can create revenue streams for many years to come.
Yet another thing to bear in mind is that “price” is the one 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.
Before our corporation started studying online promoting relating to plumbing apprenticeships there did not appear the obvious choice of key phrase to use as our primary target.
Place
Place is the component of the marketing mix that’s often not addressed by companies, but it’s still an important part of selling your product effectively. In short, it describes the way in which you provide your product to your consumer, and subsequently how you receive money from them. It can be a fantastic marketing approach when used correctly.
The most common ramifications of place-based marketing are the physical locations in which your products are sold. For the vast majority of consumer products, this includes the distribution network between your production plants and retailers or other outlets around the world. Since distribution of a physical product costs money it is important to identify your own priorities and adjust your distribution network appropriately.
With the increasing use of the Internet by your prospective customers, marketing strategies 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 whole 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 deliver impressive financial results.
Promotion
When you say the word “marketing”, many people immediately think of the promotional aspect of the marketing mix, although as we have seen, this is only one branch of a more complete system. Promotion can be used on a very individual basis or as a mass communication tool, and whilst it can be a costly undertaking it is often an important one. The key concern of promotion is to deliver a particular message that will increase sales.
Advertising is one of the most typical forms of promotion. Typically 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 simply as targeted advertising materials posted through your door.
Another important part of promotion involves branding, which may not necessarily yield more sales directly, but goes back to one of the initial purposes of marketing; getting customers to pick your product over those of your competitors. When all other parts of the marketing mix are equal it could be branding that swings a customer’s choice.
Putting it into Practice
As previously mentioned each company is different and will have different marketing requirements. By using a balance of the four P’s reviewed above you can take an effective view of your own marketing strategy.