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 people money for it.
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 anybody else. This means that your company will be contesting with other businesses that sell a similar product and you will both be trying to earn money from the same shoppers, who only want to spend their money once.
Marketing is the main 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 variables, but when done right it can be the one business practice that could make or break a corporation.
So where should you begin when constructing a marketing strategy for your own business? Well, every situation is different, and each industry will have its own set of advantages and weaknesses that must be taken into consideration, but there is a marketing principle 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 system. It demonstrates 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 built upon 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 clear 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 strategy.
Our company specialises at supplying decorative concrete floors and while we all thought our marketing plan was adequate we have seen improvements since using marketing mix ideas.
Product
Whilst every aspect of the marketing mix is a necessity, the “product” element mentioned as one of the four P’s is perhaps 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 physical product that your business is selling. In fact, the common train of thought very often bears the exact opposite sentiment. Surely it should be the other way around – your manufacturing department creates an item 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 well-known brands of both operating system and software application products on the market already, and since the market is relatively well saturated it would be very tough (and expensive) to “take on the big boys”. So how could the principles of the marketing mix assist in this circumstance?
Rather than developing an operating system and then attempting to craft a marketing strategy to take on the likes of Microsoft or Apple, it would be far more effective to look at what sorts of product are sought after in the current marketplace, and how viable it would be to manufacture and sell them. By being aware of the marketing mix early on in your product development cycle you can avoid 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 why a customer would buy your product rather than a competitors’. The technique 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 known as product variation and is typically used to either prolong the lifecycle of a product currently in the market, or to make your brand new product attractive to as many consumers as possible. Once again, this technique can be applied at all stages of product development.
The car industry uses this technique very effectively by offering different engines, trim packages and interior options with the cars that they sell. They use the marketing mix to good effect to sell their own products in an extremely competitive marketplace.
“Product is paramount” is one of the slogans applied within our chees graters organisation that tries to point out to all employees that we expect top quality production.
Price
Another important factor in the marketing mix concerns the price of your products or services. This isn’t a simple case of performing market research to figure out the highest price that your customers would spend (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 specific targets your company has. The potential advantages of an effective pricing strategy are surprisingly large!
Although it may seem obvious, it is still worth noting that price has always been, and likely always will be, one of the key factors that customers take into account when they are making a purchase. It is also worth noting that customers don’t constantly consider the lowest price to be the best value.
There are many questions that you need to ask yourself while devising a good pricing plan, key amongst which are the price sensitivity of your clients, 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 primary principals; price skimming and penetration pricing.
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 are going to be prepared to spend a large amount of money to get a product or service early on. Not only can this technique yield great financial advantages, 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 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 monetary benefits can be made long into the future. It can be a risky strategy, but when employed correctly it can create revenue streams for many years to come. When establishing a price for penetration it is still critical to not give a poor impression of your product by aiming for too low a figure.
Another thing to keep 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 vital to get your pricing strategy right.
To optimize our website for search engine marketing we chose rice and peas as an aimed key phrase since it relates to our company and what we do.
Place
Place is the portion of the marketing mix that’s often disregarded by companies, but it’s still an important part of selling your product effectively. In short, 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 technique when applied appropriately.
The most typical ramifications of place-based marketing are the physical venues in which your goods are sold. For the majority of consumer products, this includes 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 crucial to determine your own priorities and adjust your distribution network appropriately. This is the primary use of this element of the marketing mix.
With the increasing use of the Internet by your prospective customers, marketing methods have had to consider 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. Effective positioning of your product or service can therefore deliver impressive economic results.
Promotion
When you mention the word “marketing”, many people instantly 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 instrument, and whilst it can be a costly undertaking it is often an essential one.
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 distributing 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 just as targeted advertising materials posted through your front door. The potential for individualised advertising has never been so great.
Another significant part of promotion involves branding, which will not necessarily yield more sales directly, but relates back to one of the initial purposes of marketing; getting customers to choose your product over those of your competitors.
Putting it into Practice
As previously mentioned each company is different and will have different marketing requirements. By using a balance of the four P’s discussed above you can take a good view of your own marketing plan.