Nearly every company 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 customers money for it.
Firstly, it is a very rare case that 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 product 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 firms to draw prospective customers to do business with them and not with their rivals. It is a very extensive topic that is affected by a great number of internal and external variables, but when done right it can be the single business practice that could make or break a company.
So where should you start when creating a marketing strategy for your own company? Well, every situation is different, and each company will have its own set of advantages and flaws that must be taken into consideration, but there is a marketing principle that can be applied to almost any company to be used as a marketing framework.
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 demonstrates the fact that marketing is not a straightforward, blunt-edged business technique, but rather a delicate 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 built upon to include the concept of “four P’s” that described the essential elements of the marketing mix. The formalisation of these P’s made it very easy for business managers and marketers to quickly relate 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.
While we were planning the release for some of our tax investigation insurance offers we employed ideas in the marketing mix to devise a strategy.
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 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.
Many people do not think that marketing has any place 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 precise 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?
Take the computer software market as an example. There are many established brands of both operating system and software application solutions on 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 circumstance?
Rather than creating an operating system and then trying to craft a marketing strategy to take on the likes of Microsoft or Apple, it would be 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 mindful of the marketing mix early on in your product development cycle you can avoid business dead-ends at a later stage.
Once your goods have been designed and created it is still a critical skill to be able to objectively evaluate your own products to recognise the reasons that a customer should buy your product rather than a competitors’.
Another 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 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 good effect to sell their own goods in an incredibly competitive marketplace.
To maintain a standard corporate image a company ought to redesign their portal an example is maytag refrigerators who echo colors, fonts and also graphics associated with their branding.
Price
Another important factor in the marketing mix relates to the price of your products or services. This isn’t a simple case of performing 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 weapon designed to achieve any particular targets your company has.
Whilst it may seem obvious, it’s still worth noting 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 always consider the cheapest price to be the best price.
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. These are outlined below.
Price skimming
The main idea behind price skimming is to make as much cash as possible from the segment of the market which is price-insensitive and will be prepared to spend a premium amount of money to get a product or service early on. Not only can this approach yield great financial benefits, but it can also advertise an exclusive and high quality image of your item.
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. Makers could set nearly 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 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.
Yet 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.
Our business wanted to appeal to a larger market and focusing on become a singer helped boost our precense in the international business network.
Place
Place is the part of the marketing mix that’s often disregarded by companies, but it is still an important part of selling your product successfully. In short, it describes the way in which you deliver your product to your customer, and subsequently how you collect money from them. It can be a fantastic marketing approach when used appropriately.
The most typical implications of place-based marketing are the physical venues in which your goods are sold. For the vast majority of consumer products, this includes the distribution infrastructure between your production centres and shops or other outlets around the country. Since distribution of a physical product costs money it is crucial to determine your own priorities and adjust your distribution network appropriately.
With the growing use of the Internet by your potential customers, marketing strategies have had to consider how they use the Internet to help distribute their products. By using the Internet as a point of contact (or even as an entire distribution route in download-based markets such as MP3s) companies are now able to reach out to a huge pool of possible customers.
Promotion
When you say the word “marketing”, many people immediately 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 instrument, and whilst it may be an expensive undertaking it is often an essential one. The key concern of promotion is to deliver a specific message that will improve sales.
Advertising is one of the most typical forms of promotion. Typically it would be done by posting on billboards, creating short clips for TV and radio or by physically distributing flyers or leaflets to potential customers. 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 material posted through your front door. The potential for individualised advertising has never been so good.
Another significant part of promotion involves branding, which may not necessarily yield more sales directly, but goes back to one of the preliminary functions 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 Practice
As previously mentioned every company is unique 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.
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