Almost every business on the planet sets out with the main objective of making money. This is generally done by producing some form of product, or offering a service, and then charging customers money for it. This fundamental principle is fairly straight-forward, though it contains many specific 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 anybody else. This means that your company will be competing with other businesses that sell a similar product and you will both be trying to make money from the same shoppers, who only want to spend their money once.
Marketing is the primary tool used by modern firms to draw potential customers to do business with them and not with their competitors. It is a very extensive topic that is influenced by a great number of internal and external factors, but when done well it can be the one business practice that can make or break a company.
So where should you begin when constructing a marketing strategy for your own business? Well, each situation is different, and every company will have its own set of strengths and weaknesses 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.
The Marketing Mix
The marketing mix was a phrase that was first coined in the 1950’s and is an expression that is used to describe the fundamental building blocks of any marketing strategy. It reflects the fact that marketing is not a simple, blunt-edged business technique, but rather a subtle balance of different elements of business functions.
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 business 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 tailored and efficient marketing plan.
Our company has grown to be a leader for conference production services since employing tailored marketing ideas across our complete range of offerings. To see our website click here.
Product
Although 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 company will be selling, and at the end of the day it is the reason that customers are going to spend money with you.
Several people do not think that marketing has any role to play when it comes to the actual product that your business is selling. In fact, the common train of thought very often bears the precise opposite sentiment. Surely it should be the other way around - your production department creates an item for sale and then it is the task of the marketing department to find ways to sell it, right? This is not necessarily the case.
Consider the computer software market as an example. There are many well-known brands of both operating system and 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”. So how can the principles of the marketing mix assist 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 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 avoid business dead-ends at a later stage.
Once your products have been designed and created it is still a critical skill to be able to objectively review your own products to recognise the reasons that 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.
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 currently 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 various 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 extremely competitive marketplace.
As part of our own promotion plan, our business very carefully studied what exactly made our goods stand out from the crowd.
We do not have a defined promotion division in our conference production company although many of our own managers have been able to adopt marketing as part of their job role.
Price
Another important factor in the marketing mix relates to the price of your products or services. This is not a simple case of carrying out market research to determine the top price that your customers would spend (although that can be a useful 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.
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 do not always 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 customers, 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 main 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 sector 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 deliver great economic benefits, but it can also advertise 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 nearly any price they wanted to and there would still be a loyal core of customers that would pay it. By making use of this method as part of a pre-ordering strategy, a company can help to smooth its own money flow.
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 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.
Yet another thing to bear 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.
Marketing plays a crucial function in our electric cheese graters business strategy and it should not get treated like an afterthought.
Place
Place is the part of the marketing mix that is often overlooked by companies, but it is still a significant part of selling your product effectively. In short, it describes the method in which you provide your product to your consumer, and consequently how you collect money from them.
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 includes the distribution infrastructure between your production plants and retailers and other outlets around the country. Since distribution of a physical product costs money it is important to identify your own priorities and adapt your distribution network accordingly.
With the growing use of the Internet by your potential customers, marketing methods have had to consider 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 possible customers. Effective positioning of your product or service can therefore yield impressive economic results.
Promotion
When you say 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 tool, and whilst it can 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, producing 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 seen a great increase in promotion via e-mail and the Internet, or just as targeted advertising material posted through your door.
Another important part of promotion involves branding, which may not necessarily yield more product sales directly, but goes back to one of the initial functions of marketing; getting customers to choose your product over those of your rivals.
Putting it into Practice
As previously mentioned every company is different and will have different marketing requirements. By using a mixture of the four P’s discussed above you can take an effective view of your own marketing strategy.
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