Almost every company 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 customers money for it.
First of all, it is a very rare case where a business can offer a product or service that is truly unique and cannot be provided 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.
Marketing is the main tool used by modern firms to draw potential customers to do business with them and not with their rivals. It is a very broad topic that is influenced 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 company. Any time spent on marketing will reap rewards, although spending this time correctly can yield incredible results.
So where should you start when constructing a marketing strategy for your own business? Well, every situation is different, and every industry 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 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 simple, blunt-edged business tool, but rather a delicate balance of different aspects of business operations.
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 easy 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 form a customised and efficient marketing system. The four P’s are Product, Price, Place and Promotion.
The “product” aspect of the four P’s can refer to any service, like tax investigation insurance services, or any kind of non-physical asset being offered for sale by a company
Product
Whilst every aspect of the marketing mix is a requirement, the “product” element mentioned as one of the four P’s is possibly the most crucial of all. It identifies the physical product or intangible service that your company will be selling, and at the end of the day it is the reason that buyers are going to spend money with you.
Several people do not think that marketing has any place to play when it comes to the actual 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 opposite way around – your production department creates an item for sale and then it is the job of the marketing department to discover 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 on the market already, and because 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 trying 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 desired in the current marketplace, and how viable it would be to manufacture and sell them. By being mindful of the marketing mix early on in your product development period you can prevent 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 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 generally used to either prolong the lifecycle of a product already in the market, or to make your new product attractive to as many customers as possible. Again, this technique can be applied at all stages of product development.
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 goods in an extremely competitive marketplace. Although these companies may have huge marketing budgets, the same concepts can be applied to all businesses.
“Product is paramount” is one of the main mottos applied within our xbox 360 steering wheel organisation that aims to point out to all employees that we expect high quality manufacturing.
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 highest price that your customers would spend (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 targets your company has. The potential benefits of an effective pricing strategy are surprisingly large!
Although it may seem obvious, it’s still worth pointing out 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. In fact a price that is too low can sometimes turn buyers away.
There are many questions that you need to ask yourself when devising a good pricing plan, 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 however, pricing can be covered by two primary principals; price skimming and penetration pricing. These are outlined below.
Price skimming
The main idea behind price skimming is to make as much money as possible from the segment of the market which is price-insensitive and will be prepared to spend a premium amount of money to get a product or service early on. Not only can this technique yield great financial benefits, but it can also promote an exclusive and high quality image of your item.
This pricing strategy is very often used in the consumer electronics industry 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 base of customers that would pay it.
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 financial rewards can be earned long into the future. It can be a risky strategy, but when used correctly it can setup revenue streams for many years to come. When establishing a price for penetration it is still important to not give a poor impression of your product by aiming for too low a number.
Another thing to keep 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 create or carry out.
To optimise our web site for google search marketing we selected buy childrens bean bags for an aimed phrase because it relates to our business and what we do.
Place
Place is the component of the marketing mix that is 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 consumer, and consequently how you receive money from them. It can be a fantastic marketing approach when applied correctly.
The most typical ramifications of place-based marketing are the physical locations in which your goods are sold. For the majority of consumer products, this includes the distribution infrastructure between your manufacturing plants and shops or other outlets around the country. Since distribution of a physical product costs money it is crucial to identify your own priorities and modify your distribution network accordingly. This is the principal use of this part of the marketing mix.
With the increasing use of the Internet by your prospective customers, marketing techniques have had to consider how they use the Internet to help distribute their products. By using the Internet as a point 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 huge pool of possible customers.
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 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.
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 seen a great increase in promotion via e-mail and the Internet, or simply as targeted advertising material posted through your front door.
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 competitors. When all other parts of the marketing mix are equal it can be branding that sways a customer’s decision.
Putting it into Practice
As previously mentioned every business is different and will have different marketing needs. By using a mixture of the four P’s reviewed above you can take an effective view of your own marketing strategy.
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