Almost every company on the planet sets out with the primary objective of making money. This is generally done by manufacturing some form of product, or offering a service, and then charging customers money for it. This fundamental principle is fairly straight-forward, although it contains many intricate details.
First of all, it is a very rare case that a business can offer a product or service that is truly unique and cannot be supplied 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 earn money from the same shoppers, who only want to spend their money once. So how can you improve the chances of them spending money with you?
Marketing is the primary tool used by modern organisations to draw prospective customers to do business with them and not with their rivals. It is a very extensive 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 can make or break a company. Any time spent on marketing will reap rewards, although spending this time efficiently can yield extraordinary results.
So where should you begin when constructing a marketing strategy for your own company? Well, every situation is different, and each industry 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 company to be used as a marketing platform. 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 a phrase that is used to express the fundamental building blocks of any marketing system. It demonstrates the fact that marketing is not a simple, blunt-edged business tool, but rather a delicate balance of different elements of business operations.
The term was later built upon 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 tailored and efficient marketing plan. The four P’s are Product, Price, Place and Promotion.
Our company already sells a successful range of handmade wooden jewellery box products yet we still use fresh promotional suggestions to improve our sales numbers.
Product
Although every aspect of the marketing mix is a necessity, 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 business will be offering, and at the end of the day it is the reason that buyers are going to spend money with you. If this part is not adequately managed then your company will find it hard to survive.
Many 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 other way around – your manufacturing department creates a product for sale and then it is the task of the marketing department to discover ways to sell it, right?
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 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 attempting 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. 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 goods have been designed and created it is still a vital skill to be able to objectively evaluate your own products to identify the reasons that a customer should buy your product rather than a competitors’.
A different form of this part of the marketing mix is called 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 customers as possible.
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 great effect to sell their own products in an incredibly competitive marketplace. Whilst these companies may have substantial marketing budgets, the same concepts can be applied to all businesses.
“Product is paramount” is one of the main slogans applied in xbox hard drive 360 firm that tries to emphasise to all staff that we expect high quality production.
Price
Another key factor in the marketing mix concerns the price of your products or services. This isn’t a simple case of performing market research to determine the top price that your customers would pay (although that can be a handy tool to use), but rather making use of the price of your products as a strategic tool designed to achieve any particular targets your business 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 likely 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 do not constantly consider the lowest price to be the best price.
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 competitors are doing and how can pricing maximise your own profits. From a strategy point of view though, pricing can be covered by two primary principals; price skimming and also 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 are going to be prepared to spend a large amount of money to receive a product or service early on. Not only can this approach yield excellent economic benefits, but it can also promote an exclusive and high quality image of your product.
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. Manufacturers 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 opposite end of the pricing spectrum, and is tailored towards gaining a large market share at a short-term cost so that monetary rewards can be earned long into the future. It can be a high risk strategy, but when employed 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 figure.
Yet another thing to keep in mind is that “price” is the one part of the marketing mix that will generate revenue 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 vital to get your pricing strategy right.
To optimize our website for google marketing we chose large childrens bean bags as an aimed key phrase since it relates to our company and what we do.
Place
Place is the part of the marketing mix that’s 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 provide your product to your customer, and subsequently how you collect money from them. It can be a great marketing approach when applied appropriately.
The most typical implications of place-based marketing are the physical venues in which your goods are sold. For the majority of consumer products, this involves the distribution network between your manufacturing centres and shops and other outlets around the world. 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 take into account how they use the Internet to help deliver their products. By using the Internet as a point 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 possible 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 complete system. Promotion can be employed on a very individual basis or as a mass communication tool, and whilst it might be a costly undertaking it is often an important one.
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 material posted through your front door.
Another significant part of promotion involves branding, which will 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 can 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 balance of the four P’s discussed above you can take a good view of your own marketing strategy.