Nearly 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 principle is fairly straight-forward, though it contains many specific details.
First of all, 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 company will be competing with other businesses that sell a similar product and you will both be trying to earn money from the same customers, 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 competitors. It is a very broad topic that is affected by a great deal of internal and external variables, but when done well it can be the one business practise that can make or break a corporation. Any time spent on marketing will reap rewards, although spending this time efficiently can yield incredible results.
So where should you start when constructing a marketing strategy for your own business? Well, every situation is different, and each 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 framework. It is known as 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 describe the fundamental building blocks of any marketing system. It demonstrates the fact that marketing is not a straightforward, blunt-edged business tool, but rather a subtle balance of different aspects of business operations. It got its name because 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 critical elements of the marketing mix. The formalisation of these P’s made it very easy for business managers and marketers to quickly relate the elements of marketing to the strengths of their own organisations, and by doing so could very quickly create a personalised and efficient marketing plan.
This marketing model is not limited to physical goods, services such as staining concrete floors may benefit via new marketing ideas or a new point of view.
Product
Whilst every aspect of the marketing mix is a necessity, 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 company will be offering, and at the end of the day it is the reason that customers are going to spend money with you.
Several people don’t think that marketing has any role to play when it comes to the physical product that your business is selling. In fact, the common train of thought very often bears the exact opposite sentiment. Surely it should be the other 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? This is not necessarily the case.
Consider the computer software market as an example. There are many well-known brands of both operating system as well as software application products on the market already, and since the market is relatively well saturated it would be very tough (and expensive) to “take on the big boys”.
Rather than developing an operating system and then trying to craft a marketing strategy to rival the likes of Microsoft and 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 produce and sell them.
Once your products have been designed and created it is still a vital skill to be able to objectively evaluate your own products to identify the reasons why a customer should buy your product rather than a competitors’. The skill is called product differentiation and forms one of the fundamental skills of the product part of the marketing mix pie.
A different form of this part of the marketing mix is known as product variation and is typically used to either lengthen the lifecycle of a product already in the market, or to make your new product attractive to as many consumers as possible. Once again, this method can be applied at all stages of product development.
The car industry uses this approach 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.
“Product is paramount” is one of the slogans used within our sunny plants company which aims to remind all employees that we expect top quality production.
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 figure out the top 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 tool designed to achieve any particular goals your company has. The potential benefits of an effective pricing plan are surprisingly substantial!
Whilst it may seem obvious, it is still worth noting that price has always been, and probably always will be, one of the crucial factors that customers 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 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 rivals 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 penetration pricing.
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 will be willing to spend a large amount of money to get a product or service early on.
This pricing technique is very often used in the consumer electronics market where customers will often eagerly await the release 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 earned long into the future. It can be a risky strategy, but when employed correctly it can setup revenue streams for many years to come.
Another thing to bear in mind is that “price” is the one 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 produce or undertake.
To optimise our web site for Google visibility we selected buy childrens bean bags as an aimed phrase since it relates to our business and what we do.
Place
Place is the part of the marketing mix that is often disregarded by companies, but it is still a significant part of selling your product successfully. In short, it describes the method in which you provide your product to your customer, and subsequently how you receive money from them. It can be a great marketing approach when used correctly.
The most typical implications of place-based marketing are the physical locations in which your products are sold. For the majority of consumer products, this involves the distribution infrastructure between your manufacturing centres and retailers or other outlets around the country. Since distribution of a physical product costs money it is crucial to determine your own priorities and alter your distribution network accordingly. This is the primary use of this element of the marketing mix.
With the growing use of the Internet by your prospective customers, marketing strategies 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 route in download-based markets such as MP3s) companies are now able to reach out to a huge pool of possible customers.
Promotion
When you say the word “marketing”, most people immediately think of the promotional side of the marketing mix, although as we have seen, this is merely one branch of a more complete system. Promotion can be used on a very individual basis or as a mass communication instrument, and whilst it can be a costly undertaking it is often an important one. The primary concern of promotion is to deliver a particular 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 distributing 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 simply as targeted advertising material posted through your front door.
Another important part of promotion involves branding, which may not necessarily yield more sales directly, but relates back to one of the initial functions of marketing; getting customers to pick your product over those of your competitors.
Putting it into Practise
As previously mentioned each company is different and will have different marketing needs. By using a mixture of the four P’s reviewed above you can take a good view of your own marketing plan.
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