Almost every business 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 theory is fairly straight-forward, though it contains many specific details.
Firstly, it is a very rare case that a company can offer a product or service that is truly unique and cannot be provided by anybody else. This means that your business will be competing with other businesses that sell a similar item and you will both be trying to earn money from the same shoppers, who only want to spend their money once.
Marketing is the primary tool used by modern businesses to draw prospective customers to do business with them and not with their rivals. 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 practise that can make or break a company.
So where should you begin when constructing a marketing strategy for your own company? Well, every situation is different, and every company will have its own set of advantages 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 term that was first coined during the 1950’s and is a phrase that is used to describe the fundamental building blocks of any marketing strategy. It demonstrates the fact that marketing is not a straightforward, 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 checklist for a recipe.
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 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 quickly create a personalised and effective marketing system. The four P’s are Product, Price, Place and Promotion.
The “product” aspect of the four P’s can pertain to a product, like chiropractor Ruddington, or even any non-physical asset being offered for sale by a company.
Product
Although every aspect of the marketing mix is a requirement, 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 offering, and at the end of the day it is the reason that buyers are going to spend money with you. If this element is not correctly managed then your company will find it hard to survive.
Several people don’t 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 opposite way around - your production department creates a product 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 well-known brands of both operating system as well as software application products in the market already, and because the market is relatively well saturated it would be very tough (and expensive) to “take on the big boys”.
Rather than developing an operating system and then trying to craft a marketing strategy to rival the likes of Microsoft or Apple, it would be more effective to look at what sorts of product are sought after in the current marketplace, and how feasible it would be to produce and sell them. By being mindful of the marketing mix early on in your product development period you can avoid business dead-ends at a later stage.
Once your goods have been designed and created it is still a vital skill to be able to objectively evaluate your own products to recognise the reasons why a customer should 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 cake.
Another form of this part of the marketing mix is known as product variation and is generally used to either extend the lifecycle of a product currently in the market, or to make your new product attractive to as many customers 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. Although these companies may have substantial marketing budgets, the same concepts can be applied to all businesses.
“Product is paramount” is one of the main slogans used in our xbox 360 steering wheel company that aims to point out to all staff that we expect high quality production.
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 using the price of your products as a strategic weapon designed to achieve any particular targets your business has. The potential benefits of an effective pricing plan are surprisingly large!
Whilst it may seem obvious, it’s still worth noting that price has always been, and probably 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 always consider the lowest price to be the best price. Actually a price that is too low can sometimes turn customers away.
There are many questions that you need to ask yourself while devising a good pricing strategy, key among which are the price sensitivity of your customers, 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. These are outlined below.
Price skimming
The main idea behind 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 technique 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. 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
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 benefits 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.
Another thing to keep in mind is that “price” is the one 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 undertake.
Grabbing some of the on-line search market is very beneficial, so pick a phrase, just like become a doctor and consider if that phrase has an adequate search marketplace for your needs.
Place
Place is the portion of the marketing mix that’s often not addressed by companies, but it’s still a significant part of selling your product successfully. In a nutshell, it describes the way in which you provide your product to your customer, and subsequently how you receive money from them.
The most typical implications of place-based marketing are the physical locations in which your goods are sold. For the vast majority of consumer products, this involves the distribution infrastructure between your manufacturing centres and shops and other outlets around the world. Since distribution of a physical product costs money it is important to determine your own priorities and alter your distribution network accordingly.
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 deliver their products. By using the Internet as a place 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 potential customers.
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 comprehensive system. Promotion can be used on a very individual basis or as a mass communication tool, and whilst it may be an expensive 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, creating short clips for TV and radio or by physically distributing flyers or leaflets to potential buyers. 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 materials posted through your front door. The potential for individualised advertising has never been so great.
Another significant part of promotion involves branding, which will not necessarily yield more sales directly, but relates back to one of the initial purposes of marketing; getting customers to pick your product over those of your rivals. When all other parts of the marketing mix are equal it can be branding that sways a customer’s choice.
Putting it into Practise
As previously mentioned each business is unique and will have different marketing needs. By using a mixture of the four P’s reviewed above you can take a good view of your own marketing strategy.
