Almost every company on the planet sets out with the primary 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 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 customers, who only want to spend their cash once. So how can you improve the chances of them spending money with you?
Marketing is the main tool used by modern businesses to draw prospective customers to do business with them and not with their competitors. It is a very extensive topic that is influenced 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. Any time spent on marketing will reap rewards, although spending this time efficiently can yield incredible outcomes.
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 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 known as 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 strategy. It demonstrates 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 since 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 essential elements of the marketing mix. The formalisation of these P’s made it very clear for company managers and marketers to swiftly associate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly form a personalised and efficient marketing plan. The four P’s are Product, Price, Place and Promotion.
Almost every segment in the modern marketplace is competitive, particularly conference production, in which good promotional decisions can mean the success or failure of the 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 critical of all. It identifies 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 element is not correctly managed then your company will find it hard to make it through.
Several people don’t think that marketing has any role to play when it comes to the physical product that your company is selling. In fact, the typical train of thought very often bears the exact opposite sentiment. Surely it should be the other way around – your production department creates an item for sale and then it is the task 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 as well as software application products in the marketplace already, and since the market is fairly 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 take on the likes of Microsoft or Apple, it would be far more effective to look at what types of product are sought after in the current marketplace, and how feasible it would be to manufacture and sell them. By being aware of the marketing mix early on in your product development period you can avoid business dead-ends at a later stage.
Once your products have been fashioned and created it is still a critical skill to be able to objectively review your own products to recognise the reasons that a customer would buy your product rather than a competitors’.
A different form of this part of the marketing mix is called product variation and is generally used to either lengthen the lifecycle of a product already in the market, or to make your brand new product attractive to as many customers as possible.
The motor 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 huge marketing budgets, the same principles can be applied to all businesses.
As part of our individual promotion strategy, our business thoroughly researched exactly what made our goods stand out from the crowd.
It might seem obvious that marketing is incredibly significant for a company similar to ours, but the suggestions still need to be put into practice, which isn’t always simple.
Price
Another key factor in the marketing mix relates to the price of your products or services. This is not a simple case of performing market research to figure out the highest price that your customers would pay (although that can be a handy tool to use), but rather using the price of your products as a strategic weapon designed to achieve any specific objectives your company has.
Whilst it may seem obvious, it is still worth pointing out that price has always been, and probably 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 price.
There are many questions that you need to ask yourself when devising a good pricing strategy, key amongst 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 though, pricing can be covered by two primary principals; price skimming and penetration pricing. These are outlined below.
Price skimming
The main idea driving price skimming is to make as much cash as possible from the segment 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 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 geared 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 used correctly it can create revenue streams for many years to come.
Yet another thing to keep 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 produce or carry out. So it is even more essential to get your pricing technique right.
We were able to make use of our previous market analysis regarding integrated washing machines to start the on-line key phrase optimisation we were doing.
Place
Place is the part of the marketing mix that’s often not addressed by companies, but it’s still an important part of selling your product successfully. In a nutshell, it describes the method in which you deliver your product to your customer, and consequently how you collect money from them.
The most common ramifications of place-based marketing are the physical venues in which your goods are sold. For the majority of consumer products, this includes the distribution infrastructure between your production centres 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 modify your distribution network appropriately. This is the primary application of this element of the marketing mix.
With the increasing use of the Internet by your prospective 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 place of contact (or even as a complete distribution channel in download-based markets such as MP3s) companies are now able to reach out to a large pool of possible customers. Effective placing of your product or service can therefore deliver impressive economic results.
Promotion
When you say the word “marketing”, most people immediately 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 used on a very individual basis or as a mass communication tool, and whilst it might be an expensive undertaking it is often an important one. The key concern of promotion is to deliver a specific message that will boost sales.
Advertising is one of the most typical 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 buyers. With the coming of the information age we have witnessed a great increase in promotion via e-mail and the Internet, or just as targeted advertising material posted through your front door. The potential for individualised advertising has never been so good.
Another important part of promotion involves branding, which may not necessarily yield more product sales directly, but relates back to one of the preliminary purposes of marketing; getting customers to choose your product over those of your competitors. When all other pieces of the marketing mix are equal it could be branding that swings a customer’s choice.
Putting it into Practice
As previously mentioned each business is unique and will have different marketing requirements. By using a mixture of the four P’s reviewed above you can take an effective view of your own marketing strategy.
Authors bio is coming up shortly.
