Practically every business on the planet sets out with the main objective of earning money. This is usually done by producing some form of product, or offering a service, and then charging people money for it. This fundamental principle is fairly straight-forward, although it contains many intricate details.
First of all, it is a very rare case that a company can offer a product or service that is truly unique and cannot be supplied by anybody else. This means that your enterprise will be competing 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 cash once. So how can you boost the chances of them spending money with you?
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 affected by a great number of internal and external factors, but when done well it can be the single business practise that could make or break a company. Any time spent on marketing will reap rewards, although spending this time efficiently can yield incredible results.
So where should you start when constructing a marketing strategy for your own company? Well, every situation is different, and each business will have its own set of advantages 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 framework. 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 a phrase 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 tool, but rather a subtle balance of different elements of business functions. It got its name since it is similar to the ingredients checklist 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 clear for business managers and marketers to swiftly associate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly form a personalised and efficient marketing plan.
This marketing style is not restricted to physical goods, other services like floor painting can gain via new marketing ideas or a new perspective.
Product
Whilst every aspect of the marketing mix is a necessity, 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 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 element is not correctly managed then your company will find it hard to make it through.
Many people don’t think that marketing has any place to play when it comes to the physical 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 other way around - your production 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 necessarily the case.
Consider 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 relatively well saturated it would be incredibly 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 attempting to craft a marketing strategy to take on 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 viable it would be to manufacture 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 recognise the reasons that 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 typically used to either lengthen the lifecycle of a product already in the market, or to make your brand new product attractive to as many consumers as possible.
The car 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 great effect to sell their own products in an incredibly competitive marketplace.
An example of one of the most recent forms of promotional advertising is the new Maytag side by side refrigerators site which provides flexible and accessible means to target potential consumers.
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 highest price that your customers would spend (although that can be a handy tool to use), but rather using the price of your products as a strategic tool designed to achieve any particular goals your company has. The potential benefits of an effective pricing strategy are surprisingly substantial!
Although it may seem obvious, it is still worth noting that price has always been, and likely 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 don’t constantly consider the cheapest price to be the best price.
There are many questions that you need to ask yourself while devising a good pricing plan, key among 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 sector of the market which is price-insensitive and are going to be prepared to spend a premium amount of money to receive 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 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 opposite 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 high risk strategy, but when used correctly it can create revenue streams for many years to come.
Yet another thing to keep in mind is that “price” is the only part of the marketing mix that will generate income for a business. The other members of the four P’s will all cost money to produce or carry out.
To optimise our web site for Google visibility we selected buy childrens bean bags as a targeted phrase since it relates to our business and what we do.
Place
Place is the component 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 method in which you provide your product to your consumer, and consequently 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 includes the distribution network between your production plants 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 adapt your distribution network appropriately. This is the principal use of this part of the marketing mix.
With the growing use of the Internet by your potential customers, marketing methods have had to consider 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 route in download-based markets such as MP3s) companies are now able to reach out to a huge pool of possible customers. Effective positioning of your product or service can therefore deliver impressive financial results.
Promotion
When you mention the word “marketing”, most people immediately think of the promotional side of the marketing mix, although as we have seen, this is only one branch of a more complete system. Promotion can be used on a very individual basis or as a mass communication tool, and whilst it can be a costly undertaking it is often an important one.
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 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 door. The potential for individualised advertising has never been so great.
Another important part of promotion involves branding, which will not necessarily yield more product sales directly, but goes back to one of the preliminary purposes of marketing; getting customers to choose your product over those of your competitors.
Putting it into Practise
As previously mentioned every company 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.
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