Nearly every company on the planet sets out with the main objective of making money. This is usually done by producing some form of product, or offering a service, and then charging customers money for it. This fundamental theory is fairly straight-forward, although it contains many specific details.
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 anybody else. This means that your company will be competing 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 cash once.
Marketing is the main tool used by modern businesses 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 number of internal and external factors, but when done right it can be the single business practice that could make or break a company.
So where should you start when creating a marketing strategy for your own company? Well, every situation is different, and each business will have its own set of strengths 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 during the 1950’s and is a phrase that is used to describe the fundamental building blocks of any marketing strategy. It demonstrates the fact that marketing is not a straightforward, blunt-edged business tool, but rather a delicate balance of different elements of business functions. It got its name since 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 business managers and marketers to swiftly associate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly form a tailored and effective marketing system. The four P’s are Product, Price, Place and Promotion.
Our organisation has grown to be a forerunner for conference production services after employing customised marketing ideas across our complete range of offerings. To see our website click here.
Product
Whilst every element of the marketing mix is a requirement, the “product” element mentioned as one of the four P’s is possibly the most critical 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 do not think that marketing has any place to play when it comes to the actual 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 other way around - your production department creates a product for sale and then it is the job of the marketing department to find ways to sell it, right?
Take the computer software market as an example. There are many established brands of both operating system and software application solutions in the market already, and since the market is fairly 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 take on the likes of Microsoft and 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 products have been designed 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 technique 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 extend the lifecycle of a product currently 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 sell. They use the marketing mix to great effect to sell their own products in an extremely competitive marketplace. Although these companies may have substantial marketing budgets, the same concepts can be applied to all businesses.
As part of our individual promotion plan, our business carefully researched what made our goods stand out from the masses.
We do not have a distinct marketing division within our conference production business though many of our own managers have been able to adopt marketing as part of their job function.
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 weapon designed to achieve any specific objectives your business has.
Whilst it may seem obvious, it’s still worth noting that price has always been, and probably always will be, one of the crucial factors that shoppers 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 value. Actually a price that is too low can often turn customers away.
There are many questions that you need to ask yourself while devising a good pricing plan, key among 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 penetration pricing. These are outlined below.
Price skimming
The principal idea behind 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 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. By making use of this method as part of a pre-ordering strategy, a firm can help to smooth its own cash flow.
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 rewards can be made long into the future. It can be a high risk strategy, but when used correctly it can setup revenue streams for many years to come.
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. So it is even more essential to get your pricing strategy right.
Marketing plays a key role in our own XBox hard drive price reseller plan and should not get treated like an afterthought.
Place
Place is the component of the marketing mix that’s often disregarded by companies, but it’s still a significant part of selling your product effectively. In a nutshell, it describes the method in which you deliver your product to your consumer, and subsequently how you receive money from them. It can be a fantastic marketing technique when used correctly.
The most common implications of place-based marketing are the physical locations in which your products are sold. For the majority of consumer products, this includes the distribution network between your production 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 adapt your distribution network appropriately.
With the increasing use of the Internet by your potential customers, marketing methods have had to consider how they use the Internet to help distribute their products. By using the Internet as a place of contact (or even as a whole distribution route in download-based markets such as MP3s) firms are now able to reach out to a huge pool of possible customers.
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 complete system. Promotion can be used on a very individual basis or as a mass communication instrument, and whilst it can be an expensive undertaking it is often an important one. The primary concern of promotion is to deliver a certain message that will increase sales.
Advertising is one of the most typical 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 arrival 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. 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 relates back to one of the preliminary purposes of marketing; getting customers to choose your product over those of your competitors. When all other pieces of the marketing mix are equal it could be branding that swings a customer’s choice.
Putting it into Practice
As previously mentioned every company is unique 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 strategy.
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