Almost every business on the planet sets out with the main objective of earning money. This is usually done by manufacturing some form of product, or offering a service, and then charging customers money for it. This fundamental principle is fairly straight-forward, although it contains many intricate details.
Firstly, it is a very rare case that a company can offer a product or service that is genuinely unique and cannot be provided 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 earn 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 main tool used by modern organisations to draw potential customers to do business with them and not with their competitors. It is a very extensive topic that is affected by a great deal of internal and external variables, but when done well it can be the single business practice that can make or break a company. Any time spent on marketing will reap rewards, although spending this time efficiently can yield extraordinary results.
So where should you start when constructing a marketing strategy for your own company? Well, each situation is different, and every industry will have its own set of strengths and weak points 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.
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 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 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 rapidly form a customised and effective marketing strategy. The four P’s are Product, Price, Place and Promotion.
While we were preparing the release of some of our wooden jewellery box products we employed ideas from the marketing mix to create a strategy.
Product
Although every element of the marketing mix is a requirement, 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 buyers are going to spend money with you.
Several people do not think that marketing has any place to play when it comes to the actual 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 opposite way around – your manufacturing department creates an item for sale and then it is the job of the marketing department to find ways to sell it, right? This is not necessarily the case.
Take the computer software market as an example. There are many well-known brands of both operating system and software application products on the market already, and because the market is fairly well saturated it would be very tough (and expensive) to “take on the big boys”.
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 more effective to look at what types of product are sought after in the current marketplace, and how feasible it would be to produce 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 designed 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 is one of the fundamental skills of the product part of the marketing mix cake.
A different form of this part of the marketing mix is called product variation and is generally 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 approach very effectively by offering different 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 incredibly competitive marketplace.
To preserve a standard corporate image a business ought to redesign their own web presence an example is childrens bean bags which reflect colors, text and also images associated with their own 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 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 using the price of your products as a strategic weapon designed to achieve any specific targets your company has.
Although it may seem obvious, it’s still worth noting 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 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 plan, key amongst which are the price sensitivity of your customers, what your rivals are doing and how can pricing boost 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 principal 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 receive a product or service early on.
This pricing strategy is frequently used in the consumer electronics market where customers will often eagerly await the release 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 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 setup revenue streams for many years to come.
Yet another thing to bear in mind is that “price” is the one 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.
To optimise our web site for google search marketing we chose large childrens bean bags as a targeted phrase because it relates to our company and what we do.
Place
Place is the portion of the marketing mix that is often overlooked by companies, but it’s still a significant part of selling your product successfully. In short, it describes the way in which you deliver your product to your consumer, and subsequently how you collect money from them.
The most typical ramifications of place-based marketing are the physical locations 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 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 techniques 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 an entire distribution route in download-based markets such as MP3s) firms are now able to reach out to a large pool of possible 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 employed on a very individual basis or as a mass communication instrument, and whilst it can be a costly undertaking it is often an important one. The primary concern of promotion is to deliver a particular message that will improve sales.
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 handing out 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 just as targeted advertising material posted through your front door.
Another important part of promotion involves branding, which may not necessarily yield more product sales directly, but relates back to one of the initial functions of marketing; getting customers to choose your product over those of your rivals.
Putting it into Practice
As previously mentioned every company is unique and will have different marketing needs. By using a mixture of the four P’s discussed above you can take a good view of your own marketing plan.