Nearly every business on the planet sets out with the primary objective of making money. This is usually done by manufacturing 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.
First of all, it is a very rare case where a company can offer a product or service that is genuinely unique and cannot be supplied by anyone else. This means that your enterprise will be competing with other businesses that sell a similar product and you will both be trying to make money from the same customers, who only want to spend their money once.
Marketing is the primary tool used by modern firms to draw prospective customers to do business with them and not with their competitors. 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 corporation.
So where should you begin when constructing a marketing strategy for your own business? Well, each situation is different, and each 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 platform. 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 express the fundamental building blocks of any marketing strategy. 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 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 quickly form a tailored and efficient marketing plan.
When we were planning the release of our own printed sashes we used ideas in the marketing mix to devise a plan.
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 business will be offering, and at the end of the day it is the reason that buyers are going to spend money with you.
Many people do not think that marketing has any role 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 job of the marketing department to discover ways to sell it, right?
Take the computer software market as an example. There are many established brands of both operating system as well as software application solutions in the marketplace already, and because the market is relatively well saturated it would be very tough (and expensive) to “take on the big boys”. So how can the principles of the marketing mix assist in this situation?
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 feasible it would be to produce and sell them.
Once your goods have been designed and created it is still a vital skill to be able to objectively review your own products to recognise the reasons why a customer would buy your product rather than a competitors’.
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 currently in the market, or to make your new product attractive to as many customers as possible. Again, this method can be applied at all stages of product development.
The car industry uses this approach very effectively by offering various engines, trim packages and interior options with the cars that they offer. They use the marketing mix to great effect to sell their own products in an incredibly competitive marketplace.
It is very common to come across a large amount of companies who budget for manufacturing and product sales but not properly for marketing.
Price
Another key factor in the marketing mix concerns the price of your products or services. This isn’t a simple case of carrying out market research to figure out the highest 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 weapon designed to achieve any specific goals your company has. The potential benefits of an effective pricing strategy are surprisingly large!
Whilst it may seem obvious, it’s 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 do not always consider the lowest price to be the best price. Actually a price that is too low can sometimes turn customers away.
There are many questions that you need to ask yourself while devising a good pricing strategy, key amongst 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 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 money as possible from the segment of the market which is price-insensitive and are going to be willing to spend a large amount of money to receive a product or service early on. Not only can this approach deliver excellent financial benefits, but it can also promote an exclusive and high quality image of your item.
This pricing technique is very often 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 almost 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 geared towards gaining a large market share at a short-term cost so that monetary benefits can be made 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 bear in mind is that “price” is the only 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 produce or carry out.
When promoting your corporate web site it’s important to select the right key phrase. Imprinted balloons fitted our business the best and we have made the appropriate marketing modifications.
Place
Place is the component of the marketing mix that’s often overlooked by companies, but it is still an important part of selling your product effectively. In a nutshell, it describes the way in which you provide your product to your customer, and consequently how you receive money from them. It can be a fantastic marketing technique when used appropriately.
The most common ramifications of place-based marketing are the physical venues in which your products are sold. For the majority of consumer products, this involves 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 important to identify your own priorities and alter your distribution network appropriately.
With the increasing use of the Internet by your potential customers, marketing strategies have had to take into account how they use the Internet to help distribute 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 potential customers. Effective placing of your product or service can therefore yield impressive financial results.
Promotion
When you say the word “marketing”, many people immediately think of the promotional aspect 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 tool, and whilst it may be an expensive undertaking it is often an essential one.
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 distributing 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 just as targeted advertising materials posted through your door. The potential for individualised advertising has never been so good.
Another important part of promotion involves branding, which will not necessarily yield more 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 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 plan.
