Almost every company on the planet sets out with the primary 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. This fundamental principle is fairly straight-forward, though it contains many intricate details.
Firstly, it is a very rare case that a business can offer a product or service that is genuinely unique and cannot be provided by anyone else. This means that your business will be contesting 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. So how can you improve the chances of them spending money with you?
Marketing is the primary 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 number of internal and external factors, but when done right it can be the one business practice that could make or break a company. Any time spent on marketing will reap benefits, 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 each company will have its own set of strengths and flaws 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 called 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 express the fundamental building blocks of any marketing strategy. It demonstrates the fact that marketing is not a simple, blunt-edged business technique, but rather a delicate balance of different aspects of business operations. It got its name because it is similar to the ingredients list 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 swiftly 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 plan. The four P’s are Product, Price, Place and Promotion.
Our company excels at providing drama lesson plans and although we all 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 possibly the most critical of all. It describes the physical product or intangible service that your business will be offering, 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 survive.
Many people don’t think that marketing has any role to play when it comes to the physical product that your business 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 manufacturing department creates an item for sale and then it is the job of the marketing department to discover ways to sell it, right? This is not always 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 products on the marketplace already, and because the market is fairly well saturated it would be very tough (and expensive) to “take on the big boys”. So how can the principles of the marketing mix help in this situation?
Rather than developing 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 types of product are desired in the current marketplace, and how feasible it would be to produce and sell them. By being mindful of the marketing mix early on in your product development cycle you can avoid business dead-ends at a later time.
Once your products have been fashioned and created it is still a vital skill to be able to objectively review your own products to recognise the reasons that a customer should buy your product rather than a competitors’.
Another form of this part of the marketing mix is known as product variation and is generally used to either lengthen the lifecycle of a product currently in the market, or to make your brand new product attractive to as many customers 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 offer. They use the marketing mix to good effect to sell their own products in an incredibly competitive marketplace. Whilst these companies may have huge marketing budgets, the same concepts can be applied to all businesses.
As part of our individual marketing method, our shooting socks business very carefully studied what exactly made our products stand out from the crowd.
Price
Another important factor in the marketing mix relates to 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 using the price of your products as a strategic weapon designed to achieve any specific goals your company has.
Whilst it may seem obvious, it is still worth pointing out that price has always been, and probably 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 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 plan, 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 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 get a product or service early on.
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 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 other 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 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 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 essential to get your pricing technique right.
Our company has tweaked its business website so DVDs for children occurs very regularly so more people can find us via search engines.
Place
Place is the part of the marketing mix that’s often disregarded by companies, but it is 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 subsequently how you receive money from them.
The most common implications of place-based marketing are the physical venues in which your products are sold. For the majority of consumer products, this involves the distribution infrastructure between your production centres and shops or other outlets around the country. Since distribution of a physical product costs money it is important to determine your own priorities and alter your distribution network appropriately.
With the growing use of the Internet by your prospective customers, marketing techniques 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 an entire distribution route in download-based markets such as MP3s) companies are now able to reach out to a large pool of possible customers. Effective positioning of your product or service can therefore yield impressive economic results.
Promotion
When you say the word “marketing”, most people immediately 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 used on a very individual basis or as a mass communication tool, and whilst it can be an expensive 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, producing 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 material posted through your front door. The potential for individualised advertising has never been so great.
Another significant part of promotion involves branding, which may not necessarily yield more sales directly, but goes back to one of the initial purposes of marketing; getting customers to pick your product over those of your competitors. When all other parts of the marketing mix are equal it could be branding that swings a customer’s decision.
Putting it into Practice
As previously mentioned every company is different 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.
