Nearly 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 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 business can offer a product or service that is truly unique and cannot be provided by anybody else. This means that your company will be contesting with other businesses that sell a similar item and you will both be trying to earn money from the same customers, who only want to spend their cash 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 number of internal and external variables, but when done right it can be the single business practise that could make or break a corporation.
So where should you start when creating 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 rule that can be applied to almost any company 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 system. It reflects the fact that marketing is not a straightforward, blunt-edged business tool, but rather a subtle balance of different aspects of business functions. It got its name because it is similar to the ingredients list for a recipe.
The term was later developed to include the idea of “four P’s” that described the critical elements of the marketing mix. The formalisation of these P’s made it very clear 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 personalised and effective marketing strategy.
This marketing model is not limited to physical items, services such as chiropractors Nottingham may benefit from new marketing ideas or a new perspective.
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 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.
Several people do not think that marketing has any role 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 other way around – your manufacturing department creates a product 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 established brands of both operating system and software application solutions on the market already, and since the market is relatively well saturated it would be incredibly 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 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 goods have been designed and created it is still a critical skill to be able to objectively review 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 is one of the basic skills of the product part of the marketing mix pie.
A different form of this part of the marketing mix is called product variation and is typically used to either prolong the lifecycle of a product already in the market, or to make your brand new product attractive to as many consumers as possible. Once again, this method can be applied at all stages of product development.
The motor 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 great effect to sell their own products in an extremely competitive marketplace.
It might seem evident that marketing is incredibly important for any physics text books reseller like ours, but the suggestions still must be put into practise, which isn’t always easy.
Price
Another key factor in the marketing mix concerns the price of your products or services. This isn’t a simple case of carrying out market research to figure out the highest price that your customers would pay (although that can be a useful tool to use), but rather making use of the price of your products as a strategic weapon designed to achieve any particular objectives your company has.
Whilst 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 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. In fact a price that is too low can often turn customers away.
There are many questions that you need to ask yourself while devising a good pricing plan, key among 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 main principals; price skimming and 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 will be willing to spend a large amount of money to get a product or service early on.
This pricing strategy 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. Manufacturers 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 other end of the pricing spectrum, and is geared towards gaining a large market share at a short-term cost so that financial rewards can be made 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 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 revenue for a business. The other members of the four P’s will all cost money to produce or carry out. So it is even more vital to get your pricing strategy right.
Our business wanted to appeal to a broader marketplace and concentrating on mens pink clothing helped boost our profile in the international business network.
Place
Place is the portion of the marketing mix that is often overlooked by companies, but it is still an important part of selling your product effectively. In a nutshell, it describes the way in which you provide your product to your customer, and consequently how you collect money from them.
The most common ramifications of place-based marketing are the physical venues in which your goods are sold. For the majority of consumer products, this involves the distribution network between your manufacturing centres and shops and other outlets around the world. Since distribution of a physical product costs money it is important to identify your own priorities and modify your distribution network accordingly.
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 deliver their products. By using the Internet as a point of contact (or even as a whole distribution route in download-based markets such as MP3s) companies are now able to reach out to a large pool of possible customers. Effective placing of your product or service can therefore yield impressive financial 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 complete system. Promotion can be employed 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. 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 customers. With the coming 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 good.
Another important part of promotion involves branding, which may 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. When all other pieces of the marketing mix are equal it could be branding that sways a customer’s decision.
Putting it into Practise
As previously mentioned each business is unique and will have different marketing needs. By using a balance of the four P’s reviewed above you can take an effective view of your own marketing strategy.