Almost every business on the planet sets out with the primary objective of making money. This is usually done by producing some form of product, or offering a service, and then charging people money for it.
Firstly, it is a very rare case that a business can offer a product or service that is truly unique and cannot be provided by anyone else. This means that your enterprise 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 increase the chances of them spending money with you?
Marketing is the main tool used by modern businesses to draw potential customers to do business with them and not with their competitors. It is a very broad topic that is affected by a great deal of internal and external variables, but when done right it can be the single business practice that could make or break a company.
So where should you begin when constructing a marketing strategy for your own business? Well, every situation is different, and every industry will have its own set of strengths and weak points 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 framework.
The Marketing Mix
The marketing mix was a term that was first coined in 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 straightforward, blunt-edged business technique, but rather a subtle balance of different aspects of business operations.
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 easy for company managers and marketers to swiftly relate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly form a tailored and efficient marketing strategy. The four P’s are Product, Price, Place and Promotion.
Almost every segment in the modern marketplace is competitive, especially white orchids, in which proper promotional decisions could mean the success or failure of the business.
Product
Although every element of the marketing mix is a requirement, the “product” element mentioned as one of the four P’s is perhaps the most crucial 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 buyers are going to spend money with you.
Many people don’t 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 opposite way around – your production department creates an item for sale and then it is the task 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 and software application products in the marketplace already, and because the market is relatively well saturated it would be incredibly 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 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 mindful of the marketing mix early on in your product development period you can prevent business dead-ends at a later time.
Once your products have been fashioned and created it is still a critical 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’. The technique is called product differentiation and is one of the fundamental skills of the product part of the marketing mix pie.
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 customers as possible. Again, this method can be applied at all stages of product development.
The motor industry uses this approach 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 goods in an incredibly competitive marketplace. Although these companies may have huge marketing budgets, the same concepts can be applied to all businesses.
An example of one of the most recent forms of promotional advertising is the new permanent marker pen website which offers versatile and accessible means to target potential customers.
Price
Another important factor in the marketing mix relates to the price of your products or services. This is not 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 tool designed to achieve any specific objectives your company has. The potential benefits of an effective pricing plan are surprisingly substantial!
Although it may seem obvious, it’s still worth pointing out that price has always been, and likely always will be, one of the key 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 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 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 though, pricing can be covered by two main principals; price skimming and also penetration pricing.
Price skimming
The principal idea driving 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.
This pricing technique is frequently used in the consumer electronics market where customers will often eagerly await the launch of a new mobile phone or computer games console. Manufacturers 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 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 risky strategy, but when used correctly it can setup revenue streams for many years to come. When setting a price for penetration it is still essential to not give a poor impression of your product by aiming for too low a number.
Another thing to keep in mind is that “price” is the one part of the marketing mix that will generate earnings 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 technique right.
Our business wanted to appeal to a broader market and concentrating on christmas presents men helped increase our precense in the international business community.
Place
Place is the portion of the marketing mix that’s often not addressed by companies, but it’s still a significant part of selling your product successfully. In a nutshell, it describes the method in which you provide your product to your consumer, and subsequently how you receive money from them.
The most typical implications of place-based marketing are the physical locations in which your goods are sold. For the majority of consumer products, this includes the distribution network between your manufacturing plants and retailers or other outlets around the world. Since distribution of a physical product costs money it is crucial to determine your own priorities and alter your distribution network appropriately. This is the primary use of this part of the marketing mix.
With the growing 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 place of contact (or even as a complete distribution route in download-based markets such as MP3s) companies are now able to reach out to a huge pool of potential customers. Effective placing of your product or service can therefore deliver impressive economic results.
Promotion
When you say the word “marketing”, most people instantly think of the promotional side of the marketing mix, although as we have seen, this is merely one branch of a more comprehensive system. Promotion can be employed on a very individual basis or as a mass communication instrument, and whilst it might be an expensive undertaking it is often an essential one. The primary concern of promotion is to deliver a certain message that will improve sales.
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 customers. 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 materials posted through your door. The potential for individualised advertising has never been so great.
Another important 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 pick your product over those of your competitors.
Putting it into Practice
As previously mentioned each company is unique and will have different marketing requirements. By using a mixture of the four P’s reviewed above you can take an effective view of your own marketing strategy.