Practically 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.
Firstly, it is a very rare case where a business can offer a product or service that is truly unique and cannot be supplied by anybody else. This means that your company will be contesting with other businesses that sell a similar item and you will both be trying to earn money from the same customers, who only want to spend their cash once. So how can you boost 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 rivals. It is a very broad topic that is influenced by a great deal of internal and external factors, but when done well it can be the one business practice that can make or break a company. Any time spent on marketing will reap rewards, although spending this time correctly can yield incredible outcomes.
So where should you begin when constructing a marketing strategy for your own company? Well, every situation is different, and every company 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 term that was first coined in the 1950’s and is an expression that is used to describe the fundamental building blocks of any marketing strategy. It reflects the fact that marketing is not a simple, blunt-edged business technique, but rather a delicate balance of different elements of business functions. It got its name because it is similar to the ingredients checklist for a recipe.
The term was later developed to include the concept 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 quickly relate the elements of marketing to the strengths of their own companies, and by doing so could very quickly create a personalised and effective marketing system.
Our company specialises in offering white orchids and although we thought our marketing plan was adequate we have seen improvements since using marketing mix principles.
Product
Whilst every element 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 describes 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. If this element is not correctly managed then your organisation will find it hard to make it through.
Many people don’t think that marketing has any place 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 precise opposite sentiment. Surely it should be the opposite way around – your production department creates a product for sale and then it is the task of the marketing department to discover 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 solutions on 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 trying to craft a marketing strategy to rival the likes of Microsoft and Apple, it would be more effective to look at what sorts of product are desired 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 critical skill to be able to objectively evaluate your own products to identify the reasons that a customer would buy your product rather than a competitors’. The skill is called product differentiation and forms one of the basic skills of the product part of the marketing mix cake.
Another form of this part of the marketing mix is called product variation and is typically used to either extend the lifecycle of a product already in the market, or to make your brand new product attractive to as many consumers as possible.
The car 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 good effect to sell their own products in an extremely competitive marketplace. Whilst these companies may have substantial marketing budgets, the same concepts can be applied to all companies.
We do not have a specific promotion department in our new how to make bread enterprise although several of our own managers have been able to take up marketing as part of their job function.
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 tool designed to achieve any particular objectives your company has. The potential advantages of an effective pricing plan are surprisingly large!
Whilst it may seem obvious, it is still worth pointing out that price has always been, and likely 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 cheapest price to be the best price. Actually a price that is too low can sometimes turn buyers away.
There are many questions that you need to ask yourself while devising a good pricing strategy, key among which are the price sensitivity of your customers, what your competitors are doing and how can pricing boost your own profits. From a strategy point of view though, pricing can be covered by two main principals; price skimming and 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 prepared to spend a premium amount of money to receive a product or service early on. Not only can this approach yield excellent economic benefits, but it can also advertise an exclusive and high quality image of your item.
This pricing technique is frequently 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 almost 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 financial rewards can be made long into the future. It can be a high risk strategy, but when employed correctly it can create revenue streams for many years to come.
Yet another thing to bear in mind is that “price” is the only 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 create or carry out.
Following using on-line tools to compare key word search popularity we identified presents men to guide the strategy for online promotion as well as off-line advertising materials.
Place
Place is the part of the marketing mix that is often disregarded 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 collect money from them. It can be a great marketing approach when applied appropriately.
The most common ramifications of place-based marketing are the physical locations in which your products are sold. For the vast majority of consumer products, this involves the distribution network between your manufacturing plants and shops or other outlets around the world. Since distribution of a physical product costs money it is important to identify your own priorities and adapt your distribution network accordingly.
With the growing use of the Internet by your prospective customers, marketing strategies 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 whole distribution channel in download-based markets such as MP3s) firms are now able to reach out to a huge pool of potential customers.
Promotion
When you mention the word “marketing”, most people instantly think of the promotional aspect of the marketing mix, although as we have seen, this is merely one branch of a more comprehensive system. Promotion can be employed on a very individual basis or as a mass communication tool, and whilst it can be a costly undertaking it is often an essential one. The primary concern of promotion is to deliver a certain message that will improve sales.
Advertising is one of the most common forms of promotion. Typically 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 seen a great increase in promotion via e-mail and the Internet, or simply as targeted advertising materials 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 purposes of marketing; getting customers to choose your product over those of your rivals.
Putting it into Practice
As previously mentioned each business is unique and will have different marketing requirements. By using a balance of the four P’s reviewed above you can take an effective view of your own marketing strategy.
