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, though it contains many intricate details.
Firstly, it is a very rare case that a business can offer a product or service that is genuinely 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 make money from the same shoppers, who only want to spend their money once.
Marketing is the primary 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 one business practice that can make or break a corporation. Any time spent on marketing will reap benefits, although spending this time correctly can yield extraordinary outcomes.
So where should you start when constructing a marketing strategy for your own business? Well, each situation is different, and each company will have its own set of advantages and weaknesses that must be taken into consideration, but there is a marketing principle that can be applied to almost any company to be used as a marketing framework. It is called the “Marketing Mix”.
The Marketing Mix
The marketing mix was a phrase 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 reflects the fact that marketing is not a straightforward, blunt-edged business technique, but rather a subtle balance of different elements of business functions.
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 relate the elements of marketing to the strengths of their own companies, and by doing so could very rapidly create a personalised and effective marketing strategy. The four P’s are; Product, Price, Place and Promotion.
While we were planning the unveiling of our custom printed balloons we employed ideas from the marketing mix to devise a plan.
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 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.
Many people don’t think that marketing has any place 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 manufacturing department creates a product for sale and then it is the task of the marketing department to discover ways to sell it, right?
Take the computer software market as an example. There are many well-known brands of both operating system as well as software application solutions on the marketplace already, and since 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 help in this situation?
Rather than creating an operating system and then attempting to craft a marketing strategy to take on the likes of Microsoft and Apple, it would be more effective to look at what types of product are desired in the current marketplace, and how feasible it would be to manufacture and sell them. By being mindful 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 evaluate your own products to recognise the reasons why a customer would buy your product rather than a competitors’. The technique is called product differentiation and forms one of the basic skills of the product part of the marketing mix pie.
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 new product attractive to as many customers 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 great effect to sell their own goods in an extremely competitive marketplace. Whilst these companies may have substantial marketing budgets, the same concepts can be applied to all businesses.
Marketing plays a key function within any advertising flags strategy and shouldn’t be treated as an afterthought.
Price
Another key factor in the marketing mix relates to the price of your products or services. This isn’t a simple case of carrying out market research to determine the highest price that your customers would pay (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 goals your business has. The potential advantages of an effective pricing plan are surprisingly substantial!
Although it may seem obvious, it is still worth pointing out that price has always been, and likely always will be, one of the key factors that customers take into account when they are making a purchase. It is also worth noting that customers don’t constantly consider the cheapest price to be the best price.
There are many questions that you need to ask yourself when devising a good pricing plan, key amongst which are the price sensitivity of your customers, what your rivals are doing and how can pricing maximise your own profits. From a strategy point of view however, pricing can be covered by two main principals; price skimming and also penetration pricing. These are outlined below.
Price skimming
The main idea driving 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 premium amount of money to receive a product or service early on. Not only can this approach yield excellent financial advantages, but it can also advertise an exclusive and high quality image of your item.
This pricing strategy is frequently used in the consumer electronics industry where customers will often eagerly await the launch 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.
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 monetary benefits can be made long into the future. It can be a high risk strategy, but when used correctly it can create revenue streams for many years to come. When setting a price for penetration it is still important to not give a bad impression of your product by aiming for too low a figure.
Yet another thing to keep in mind is that “price” is the only part of the marketing mix that will generate revenue for a business. The other members of the four P’s will all cost money to create or carry out. So it is even more vital to get your pricing strategy right.
When promoting your corporate website it’s important to select the right keyphrase. Marketing sashes suited our organisation best and we have made the suitable marketing modifications.
Place
Place is the portion of the marketing mix that’s often not addressed by companies, but it’s still a significant 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 receive money from them. It can be a great marketing technique when applied correctly.
The most typical 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 manufacturing centres and shops or other outlets around the country. Since distribution of a physical product costs money it is important to identify your own priorities and alter your distribution network appropriately.
With the growing 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 possible customers. Effective placing of your product or service can therefore deliver impressive financial results.
Promotion
When you say the word “marketing”, many 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 used on a very individual basis or as a mass communication tool, and whilst it may be an expensive undertaking it is often an essential one. The key concern of promotion is to deliver a certain message that will increase sales.
Advertising is one of the most typical forms of promotion. Classically it would be done by posting on billboards, producing 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 seen a great increase in promotion via e-mail and the Internet, or just as targeted advertising material posted through your door.
Another important part of promotion involves branding, which may not necessarily yield more product sales directly, but goes back to one of the initial 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 requirements. By using a balance of the four P’s reviewed above you can take a good view of your own marketing strategy.