Almost every company on the planet sets out with the main 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 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 contesting with other businesses that sell a similar item and you will both be trying to earn money from the same shoppers, who only want to spend their money once. So how can you boost the chances of them spending money with you?
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 factors, but when done right it can be the one business practice that could make or break a corporation.
So where should you begin when constructing a marketing strategy for your own company? Well, each situation is different, and every business 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 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 express the fundamental building blocks of any marketing system. It reflects the fact that marketing is not a straightforward, blunt-edged business tool, but rather a delicate balance of different aspects of business functions.
The term was later developed 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 company managers and marketers to quickly associate the elements of marketing to the strengths of their own companies, and by doing so could very quickly form a customised and efficient marketing plan. The four P’s are Product, Price, Place and Promotion.
Our company created a promotional strategy for our event management services by making use of this marketing and advertising mix to determine our marketing strengths.
Product
Although 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 business 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 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 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 job of the marketing department to discover ways to sell it, right? This is not always 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 in the marketplace 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 attempting to craft a marketing strategy to rival the likes of Microsoft or Apple, it would be more effective to look at what sorts of product are sought after in the current marketplace, and how feasible it would be to manufacture and sell them.
Once your goods have been fashioned and created it is still a vital skill to be able to objectively review 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 is one of the fundamental skills of the product part of the marketing mix pie.
Another form of this part of the marketing mix is known as product variation and is typically used to either prolong the lifecycle of a product currently in the market, or to make your brand new product attractive to as many customers as possible. Once again, this technique can be applied at all stages of product development.
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 products in an extremely competitive marketplace.
As part of our individual marketing method, our business very carefully studied what exactly made our goods stand out from the crowd.
To maintain a standard corporate image a business ought to redesign their own website to reflect colourings, text and also graphics associated with their branding.Our conference production company website is being redesigned at the moment.
Price
Another important factor in the marketing mix concerns the price of your products or services. This is not a simple case of carrying out market research to figure out the top 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 objectives your company has. The potential benefits of an effective pricing plan are surprisingly large!
Whilst it may seem obvious, it’s still worth noting that price has always been, and probably 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 always consider the cheapest price to be the best value. In fact a price that is too low can often turn buyers away.
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 boost your own profits. From a strategy point of view however, pricing can be covered by two primary principals; price skimming and also penetration pricing. These are outlined below.
Price skimming
The principal idea driving price skimming is to make as much cash as possible from the sector 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 frequently used in the consumer electronics market 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 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 employed correctly it can setup revenue streams for many years to come.
Another thing to keep in mind is that “price” is the only 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 create or carry out.
We were able to make use of our previous market research regarding whale season hermanus to launch the online key phrase optimisation we were undertaking.
Place
Place is the portion 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 applied appropriately.
The most common implications of place-based marketing are the physical venues in which your goods are sold. For the vast majority of consumer products, this includes the distribution infrastructure between your manufacturing centres and shops and other outlets around the country. Since distribution of a physical product costs money it is crucial to determine your own priorities and adjust your distribution network appropriately. This is the primary application of this part of the marketing mix.
With the growing use of the Internet by your prospective customers, marketing methods 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 route in download-based markets such as MP3s) firms are now able to reach out to a huge pool of possible customers. Effective positioning of your product or service can therefore deliver impressive financial results.
Promotion
When you mention the word “marketing”, most people immediately think of the promotional side 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 can be an expensive undertaking it is often an essential one. The key concern of promotion is to deliver a specific message that will improve sales.
Advertising is one of the most common 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 simply as targeted advertising materials posted through your door. The potential for individualised advertising has never been so good.
Another significant 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 pick your product over those of your rivals.
Putting it into Practice
As previously mentioned every business is different and will have different marketing needs. By using a balance of the four P’s reviewed above you can take a good view of your own marketing strategy.