Month: March 2021
Almost every company on the planet sets out with the primary objective of making money.
This is generally 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.
First of all, it is a very rare case where a business can offer a product or service that is genuinely unique and cannot be supplied by anybody else.
This means that your company will be contesting with other businesses that sell a similar product and you will both be trying to earn money from the same customers, who only want to spend their money once.
So how can you boost the chances of them spending money with you?
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 deal of internal and external variables, but when done well it can be the single business practice that can 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 business 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 a phrase that is used to describe the fundamental building blocks of any marketing system.
It reflects the fact that marketing is not a simple, blunt-edged business technique, 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 essential elements of the marketing mix.
The formalization of these P’s made it very clear for company managers and marketers to swiftly relate the elements of marketing to the strengths of their own organizations, and by doing so could very rapidly form a personalized and effective marketing system.
The four P’s are Product, Price, Place and Promotion.
The “product” element of the four P’s could pertain to any service, just like drama lesson plans, or any kind of intangible asset being provided for sale by a company.
Whilst every aspect of the marketing mix is a necessity, the “product” element mentioned as one of the four P’s is possibly the most crucial of all.
It describes 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.
If this part is not adequately managed then your company will find it hard to make it through.
Several people don’t think that marketing has any role to play when it comes to the physical product that your company is selling.
In fact, the common train of thought very often bears the exact opposite sentiment.
Surely it should be the opposite 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?
Take the computer software market as an example.
There are many well-known brands of both operating system and software application solutions in 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 assist in this situation?
Rather than creating an operating system and then trying 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 desired in the current marketplace, and how viable it would be to produce and sell them.
Once your products have been fashioned 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’.
Another form of this part of the marketing mix is called product variation and is generally used to either prolong the lifecycle of a product currently in the market, or to make your brand new product attractive to as many consumers as possible.
The motor 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 great effect to sell their own goods in an incredibly competitive marketplace.
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Another important factor in the marketing mix relates to 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 using the price of your products as a strategic tool designed to achieve any particular targets your business has.
Whilst it may seem obvious, it is still worth noting that price has always been, and likely always will be, one of the crucial factors that shoppers take into account when they are making a purchase.
It is also worth noting that customers do not constantly 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 when devising a good pricing plan, key among 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.
The principal idea behind price skimming is to make as much money as possible from the sector of the market which is price-insensitive and will be willing to spend a large amount of money to receive a product or service early on.
This pricing technique is very often used in the consumer electronics market where customers will often eagerly await the launch 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 core of customers that would pay it.
Penetration pricing is at the opposite 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 earned long into the future.
It can be a high risk strategy, but when used correctly it can create revenue streams for many years to come.
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 undertake.
So it is even more vital to get your pricing strategy right.
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Place is the component of the marketing mix that is often disregarded by companies, but it’s still an important part of selling your product successfully.
In short, it describes the way in which you provide your product to your customer, and consequently how you collect 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 involves the distribution infrastructure between your manufacturing plants and shops or other outlets around the world.
Since distribution of a physical product costs money it is important to determine your own priorities and adapt your distribution network appropriately.
This is the principal application of this element of the marketing mix.
With the increasing use of the Internet by your prospective customers, marketing techniques have had to take into account how they use the Internet to help distribute their products.
By using the Internet as a point of contact (or even as a whole distribution channel in download-based markets such as MP3s) firms are now able to reach out to a large pool of possible customers.
Effective positioning of your product or service can therefore deliver impressive financial results.
When you say the word “marketing”, most people instantly think of the promotional aspect of the marketing mix, although as we have seen, this is only 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 can be a costly undertaking it is often an essential one.
The key concern of promotion is to deliver a certain message that will boost sales.
Advertising is one of the most typical forms of promotion.
Typically 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 front door.
Another important part of promotion involves branding, which may not necessarily yield more product sales directly, but goes back to one of the preliminary functions of marketing; getting customers to choose your product over those of your competitors.
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