Nearly every company 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 customers money for it. This fundamental principle is fairly straight-forward, although it contains many specific details.
Firstly, it is a very rare case that a company can offer a product or service that is genuinely unique and cannot be supplied by anyone else. This means that your business 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 cash once. So how can you improve the chances of them spending money with you?
Marketing is the main tool used by modern organisations to draw potential customers to do business with them and not with their rivals. It is a very broad topic that is influenced by a great deal of internal and external variables, but when done well it can be the single business practice that could make or break a company.
So where should you begin when creating a marketing strategy for your own business? Well, every situation is different, and each company will have its own set of strengths 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.
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 describe the fundamental building blocks of any marketing system. It demonstrates the fact that marketing is not a straightforward, blunt-edged business technique, but rather a subtle balance of different elements of business functions.
The term was later built upon to include the idea 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 companies, and by doing so could very rapidly create a customised and efficient marketing strategy.
Our company has grown to be a forerunner in Nottingham planning consultant services after using tailored marketing and advertising ideas across our entire range of products.
Product
Although every aspect of the marketing mix is a necessity, 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. If this part is not correctly managed then your organisation will find it hard to make it through.
Several people don’t think that marketing has any place to play when it comes to the actual 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 production department creates a product for sale and then it is the job of the marketing department to find ways to sell it, right? This is not necessarily the case.
Take the computer software market as an example. There are many established brands of both operating system as well as software application solutions on 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 creating an operating system and then trying to craft a marketing strategy to rival the likes of Microsoft and Apple, it would be far more effective to look at what types of product are sought after in the current marketplace, and how feasible it would be to manufacture and sell them.
Once your products have been designed and created it is still a critical skill to be able to objectively review your own products to identify the reasons that a customer would buy your product rather than a competitors’.
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. Once again, this method can be applied at all stages of product development.
The car industry uses this approach 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 goods in an extremely competitive marketplace. Although these companies may have substantial marketing budgets, the same principles can be applied to all companies.
“Product is paramount” is one of the main slogans applied within our business which 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 is not a simple case of performing market research to determine the highest price that your customers would spend (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 business has. The potential benefits of an effective pricing plan are surprisingly substantial!
Although it may seem obvious, it’s 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 always consider the cheapest price to be the best value.
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 rivals 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 also penetration pricing. These are outlined below.
Price skimming
The main idea driving price skimming is to make as much money as possible from the sector of the market which is price-insensitive and will be prepared to spend a large amount of money to get a product or service early on. Not only can this approach deliver excellent financial advantages, but it can also advertise an exclusive and high quality image of your item.
This pricing strategy 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 base 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 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 number.
Yet another thing to bear in mind is that “price” is the only 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.
Grabbing some of the on-line search market is extremely beneficial, so choose a key phrase, like electrical apprenticeships courses, and consider if the phrase has an adequate search market for your needs.
Place
Place is the component of the marketing mix that is often disregarded by companies, but it is 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 consequently how you receive money from them. It can be a great marketing approach when used correctly.
The most common implications of place-based marketing are the physical locations in which your products are sold. For the majority of consumer products, this includes the distribution infrastructure between your production centres and shops and other outlets around the country. Since distribution of a physical product costs money it is crucial to determine your own priorities and adapt your distribution network accordingly. This is the primary application of this part of the marketing mix.
With the increasing use of the Internet by your potential customers, marketing methods 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) firms are now able to reach out to a large pool of potential customers. Effective placing of your product or service can therefore yield impressive economic results.
Promotion
When you mention the word “marketing”, many people immediately think of the promotional aspect of the marketing mix, although as we have seen, this is merely one branch of a more comprehensive system. Promotion can be used on a very individual basis or as a mass communication tool, and whilst it may be a costly undertaking it is often an essential one.
Advertising is one of the most typical forms of promotion. Classically it would be done by posting on billboards, producing short clips for TV and radio or by physically handing out flyers or leaflets to potential buyers. With the arrival 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.
Another important part of promotion involves branding, which will not necessarily yield more sales directly, but goes back to one of the initial functions of marketing; getting customers to choose your product over those of your competitors. When all other pieces of the marketing mix are equal it could be branding that sways a customer’s decision.
Putting it into Practice
As previously mentioned every company is unique and will have different marketing requirements. By using a mixture of the four P’s reviewed above you can take a good view of your own marketing strategy.