Almost every business on the planet sets out with the main objective of making money. This is usually done by manufacturing some form of product, or offering a service, and then charging people money for it. This fundamental theory is fairly straight-forward, though it contains many specific details.
Firstly, it is a very rare case where a business can offer a product or service that is truly unique and cannot be supplied by anyone else. This means that your enterprise 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. So how can you increase the chances of them spending money with you?
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 affected by a great deal of internal and external variables, but when done well it can be the one business practice that could 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 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 framework. It is called the “Marketing Mix”.
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 express 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 aspects of business operations.
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 quickly relate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly create a tailored and efficient marketing strategy.
While we were preparing the unveiling of our tax investigation insurance packages we employed concepts in the marketing mix to create a plan.
Product
Whilst every element 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 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 customers are going to spend money with you.
Many people do not think that marketing has any role to play when it comes to the physical 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 job of the marketing department to find ways to sell it, right? This is not always 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 in the marketplace 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 help 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. By being aware of the marketing mix early on in your product development period you can avoid business dead-ends at a later time.
Once your products have been fashioned 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 skill is called product differentiation and is one of the basic skills of the product part of the marketing mix pie.
Another form of this part of the marketing mix is known as 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 approach very effectively by offering various 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.
“Product is paramount” is one of the slogans applied within xbox hard drive 360 company that tries to point out to all staff that we expect top quality production.
Price
Another important factor in the marketing mix concerns the price of your products or services. This isn’t a simple case of performing 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 weapon designed to achieve any specific targets your company has.
Although it may seem obvious, it is 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 don’t constantly consider the lowest price to be the best value.
There are many questions that you need to ask yourself when devising a good pricing plan, 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 though, 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 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 promote an exclusive and high quality image of your product.
This pricing technique is frequently 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. By making use of this method as part of a pre-ordering strategy, a firm can help to smooth its own cash flow.
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 monetary rewards 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 revenue for a business. The other members of the four P’s will all cost money to produce or carry out.
To optimize our web site for google search visibility we selected buy childrens bean bags as an aimed phrase because it relates to our business and what we offer.
Place
Place is the portion of the marketing mix that’s often not addressed by companies, but it is still a significant part of selling your product successfully. In a nutshell, it describes the way in which you provide your product to your consumer, and subsequently how you receive money from them.
The most typical ramifications of place-based marketing are the physical venues in which your products are sold. For the majority of consumer products, this involves the distribution network between your manufacturing centres and retailers or other outlets around the country. Since distribution of a physical product costs money it is important to identify your own priorities and modify your distribution network appropriately.
With the growing use of the Internet by your potential 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 complete distribution channel in download-based markets such as MP3s) companies are now able to reach out to a huge pool of potential customers.
Promotion
When you say 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 might be a costly undertaking it is often an important one.
Advertising is one of the most typical forms of promotion. Classically it would be done by posting on billboards, creating short clips for TV and radio or by physically handing out flyers or leaflets to potential customers. With the arrival of the information age we have seen a great increase in promotion via e-mail and the Internet, or simply as targeted advertising material posted through your front door. The potential for individualised advertising has never been so good.
Another significant part of promotion involves branding, which will not necessarily yield more sales directly, but goes back to one of the initial purposes of marketing; getting customers to choose your product over those of your competitors. When all other parts of the marketing mix are equal it could be branding that swings a customer’s choice.
Putting it into Practice
As previously mentioned every business is different and will have different marketing requirements. By using a mixture of the four P’s reviewed above you can take an effective view of your own marketing strategy.