Nearly every company on the planet sets out with the primary objective of earning 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 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 competing with other businesses that sell a similar item and you will both be trying to make money from the same shoppers, who only want to spend their money once.
Marketing is the primary tool used by modern firms to draw potential 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 well it can be the one business practice that can make or break a company.
So where should you begin when creating a marketing strategy for your own business? Well, each situation is different, and each business will have its own set of strengths and weaknesses that must be taken into consideration, but there is a marketing principle that can be applied to almost any corporation to be used as a marketing platform. It is called the “Marketing Mix”.
The Marketing Mix
The marketing mix was a phrase that was first coined in the 1950’s and is an expression that is used to describe 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 delicate balance of different aspects of business functions.
The term was later built upon 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 company managers and marketers to quickly relate the elements of marketing to the strengths of their own companies, and by doing so could very quickly form a tailored and effective marketing plan.
Our company has risen to become a forerunner for commercial floor cleaning since using tailored marketing and advertising concepts across our entire range of products.
Product
Although every element 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 describes the physical product or intangible service that your company will be offering, 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 organisation will find it hard to survive.
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 typical train of thought very often bears the precise 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 discover 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 on 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 situation?
Rather than developing an operating system and then attempting to craft a marketing strategy to rival the likes of Microsoft or Apple, it would be far more effective to look at what types of product are desired in the current marketplace, and how feasible it would be to produce and sell them.
Once your products have been designed and created it is still a critical skill to be able to objectively evaluate 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 known as product variation and is generally used to either lengthen the lifecycle of a product currently in the market, or to make your new product attractive to as many customers as possible.
The car industry uses this approach 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.
To preserve a standard corporate image a company ought to redesign their own portal an example we found was bank sort codes who reflect colors, fonts and graphics associated with their branding.
Price
Another key 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 determine the top price that your customers would spend (although that can be a useful tool to use), but rather using the price of your products as a strategic weapon designed to achieve any specific targets your business has.
Although it may seem obvious, it’s still worth pointing out that price has always been, and likely always will be, one of the key 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 price. In fact 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 plan, key amongst 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.
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 are going to be willing to spend a premium amount of money to receive a product or service early on. Not only can this technique yield excellent financial advantages, but it can also promote an exclusive and high quality image of your product.
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. Manufacturers could set nearly any price they wanted to and there would still be a loyal core 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 money flow.
Penetration pricing
Penetration pricing is at the opposite 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 made long into the future. It can be a risky 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 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 carry out. So it is even more vital to get your pricing technique right.
Place
Place is the component of the marketing mix that’s often not addressed by companies, but it is still an important part of selling your product successfully. In short, it describes the method in which you provide your product to your customer, and subsequently how you collect money from them.
The most common ramifications of place-based marketing are the physical venues in which your products are sold. For the vast majority of consumer products, this includes 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 crucial to identify your own priorities and alter your distribution network accordingly. This is the primary use of this part of the marketing mix.
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 place 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 large pool of possible customers.
Promotion
When you mention 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 employed on a very individual basis or as a mass communication tool, and whilst it may be an expensive undertaking it is often an important one. The primary concern of promotion is to deliver a particular message that will increase sales.
Advertising is one of the most typical forms of promotion. Classically 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 simply as targeted advertising materials posted through your door.
Another important 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 rivals. When all other pieces of the marketing mix are equal it could be branding that swings a customer’s choice.
Putting it into Practice
As previously mentioned every company is unique and will have different marketing requirements. By using a balance of the four P’s reviewed above you can take an effective view of your own marketing plan.
