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 people money for it.
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 anybody 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 customers, who only want to spend their cash once. So how can you boost the chances of them spending money with you?
Marketing is the primary tool used by modern organisations to draw prospective customers to do business with them and not with their competitors. It is a very extensive topic that is affected by a great number of internal and external factors, but when done well it can be the one business practice that could make or break a corporation. Any time spent on marketing will reap benefits, although spending this time correctly can yield extraordinary outcomes.
So where should you begin when creating a marketing strategy for your own company? Well, each situation is different, and each business will have its own set of advantages and flaws 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 during the 1950′s and is a phrase that is used to express the fundamental building blocks of any marketing strategy. It reflects the fact that marketing is not a straightforward, blunt-edged business technique, but rather a subtle balance of different aspects of business operations. It got its name since it is similar to the ingredients list for a recipe.
The term was later built upon to include the concept of “four P’s” that described the critical elements of the marketing mix. The formalisation of these P’s made it very easy for company managers and marketers to swiftly associate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly create a customised and efficient marketing plan. The four P’s are Product, Price, Place and Promotion.
Our organisation created a marketing plan for our event management services by using this marketing and advertising mix to identify our marketing strengths.
Product
Whilst every aspect of the marketing mix is a necessity, the “product” element mentioned as one of the four P’s is perhaps the most critical of all. It identifies the physical product or intangible service that your company will be offering, and at the end of the day it is the reason that buyers 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 manufacturing department creates an item for sale and then it is the task of the marketing department to discover ways to sell it, right?
Consider the computer software market as an example. There are many established brands of both operating system as well as software application products in the marketplace already, and since 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 help in this circumstance?
Rather than developing an operating system and then attempting to craft a marketing strategy to rival the likes of Microsoft and Apple, it would be more effective to look at what types of product are desired in the current marketplace, and how viable it would be to manufacture and sell them. By being aware of the marketing mix early on in your product development period you can prevent business dead-ends at a later stage.
Once your goods have been fashioned and created it is still a critical skill to be able to objectively evaluate your own products to recognise the reasons why 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.
Another form of this part of the marketing mix is called product variation and is typically used to either extend 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 car industry uses this technique 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 goods in an extremely competitive marketplace.
As part of our individual promotion system, our business thoroughly researched what made our goods stand out from the crowd.
One of the newest forms of promotional marketing is through websites that provide versatile and accessible means to target potential customersOur website is at www.rostrum.eu .
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 figure out the top price that your customers would pay (although that can be a handy tool to use), but rather making use of 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 large!
Whilst it may seem obvious, it’s still worth pointing out that price has always been, and probably 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 cheapest price to be the best value. Actually a price that is too low can often turn buyers away.
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 clients, what your competitors 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.
Price skimming
The principal idea driving price skimming is to make as much cash as possible from the segment of the market which is price-insensitive and are going to be prepared to spend a premium 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 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 other end of the pricing spectrum, and is tailored 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 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 essential to not give a poor impression of your product by aiming for too low a figure.
Yet another thing to bear in mind is that “price” is the one 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 produce or carry out.
We were able to make use of our past market analysis about mens croc sandals to start the online key word optimisation we were doing.
Place
Place is the component 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 consumer, and subsequently how you collect money from them.
The most common ramifications of place-based marketing are the physical locations in which your products are sold. For the majority of consumer products, this includes the distribution network between your manufacturing plants and shops and other outlets around the world. Since distribution of a physical product costs money it is crucial to identify your own priorities and adapt your distribution network appropriately. This is the primary application of this element of the marketing mix.
With the increasing use of the Internet by your prospective 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 point of contact (or even as a whole distribution channel in download-based markets such as MP3s) companies are now able to reach out to a large pool of possible customers.
Promotion
When you mention the word “marketing”, many 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 used on a very individual basis or as a mass communication tool, and whilst it can be a costly 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 witnessed a great increase in promotion via e-mail and the Internet, or just 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 will not necessarily yield more sales directly, but relates back to one of the preliminary purposes of marketing; getting customers to choose your product over those of your rivals.
Putting it into Practice
As previously mentioned each business 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 plan.