Nearly every company on the planet sets out with the main objective of earning money. This is generally done by producing 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 intricate details.
First of all, it is a very rare case where a company 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 customers, 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 competitors. It is a very extensive topic that is influenced by a great number of internal and external factors, but when done right it can be the one business practice that can make or break a company. Any time spent on marketing will reap rewards, although spending this time correctly can yield extraordinary outcomes.
So where should you start when creating a marketing strategy for your own business? Well, every situation is different, and each business will have its own set of strengths and flaws that must be taken into consideration, but there is a marketing rule that can be applied to almost any company to be used as a marketing framework. It is called the “Marketing Mix”.
The Marketing Mix
The marketing mix was a term 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 reflects the fact that marketing is not a simple, blunt-edged business technique, but rather a subtle balance of different aspects of business functions.
The term was later developed to include the concept of “four P’s” that described the critical 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 organisations, and by doing so could very quickly create a personalised and efficient marketing system.
When we were planning the unveiling for some of our event management services we employed ideas in the marketing mix to devise a strategy.
Product
Whilst every element of the marketing mix is a requirement, the “product” element mentioned as one of the four P’s is possibly the most critical of all. It identifies 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 part is not correctly managed then your organisation will find it hard to survive.
Several people do not think that marketing has any place 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 exact opposite sentiment. Surely it should be the other way around – your manufacturing department creates an item for sale and then it is the job of the marketing department to discover ways to sell it, right?
Take the computer software market as an example. There are many established brands of both operating system as well as software application solutions on the marketplace already, and because the market is fairly 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 situation?
Rather than creating 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 viable it would be to produce and sell them. By being mindful of the marketing mix early on in your product development cycle you can prevent business dead-ends at a later time.
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 that a customer would buy your product rather than a competitors’. The skill is called product differentiation and is one of the fundamental skills of the product part of the marketing mix pie.
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 currently in the market, or to make your new product attractive to as many consumers as possible.
The car 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 extremely competitive marketplace. Whilst these companies may have huge marketing budgets, the same concepts can be applied to all businesses.
As part of our own promotion system, our business carefully studied exactly what made our products stand out from the masses.
It is very common to discover a significant amount of conference production companies that plan for production and product sales but not properly for marketing.
Price
Another important factor in the marketing mix concerns 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 useful tool to use), but rather making use of the price of your products as a strategic tool designed to achieve any specific targets your company has.
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 lowest price to be the best price. Actually a price that is too low can often turn customers away.
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 customers, what your rivals 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 money as possible from the sector 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 deliver great economic advantages, but it can also advertise an exclusive and high quality image of your item.
This pricing strategy is frequently used in the consumer electronics market 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 core of customers that would pay it. By making use of this method as part of a pre-ordering strategy, a company can help to smooth its own money flow.
Penetration pricing
Penetration pricing is at the opposite end of the pricing spectrum, and is geared 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 used correctly it can create 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 earnings for a business. The other members of the four P’s will all cost money to create or carry out.
To optimize our website for google visibility we selected home shredder as a targeted key phrase since it relates to our business and what we offer.
Place
Place is the part of the marketing mix that is often overlooked by companies, but it’s still an important 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 common ramifications of place-based marketing are the physical locations in which your products are sold. For the vast majority of consumer products, this involves the distribution infrastructure between your production plants and shops or other outlets around the world. Since distribution of a physical product costs money it is important to identify your own priorities and alter your distribution network appropriately.
With the increasing use of the Internet by your potential customers, marketing methods 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 complete distribution channel in download-based markets such as MP3s) companies are now able to reach out to a huge pool of potential customers.
Promotion
When you mention the word “marketing”, many people instantly think of the promotional side of the marketing mix, although as we have seen, this is only 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 can be an expensive undertaking it is often an essential one.
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 distributing flyers or leaflets to potential customers. With the coming of the information age we have seen a great increase in promotion via e-mail and the Internet, or simply as targeted advertising material posted through your front door.
Another important part of promotion involves branding, which will not necessarily yield more sales directly, but goes back to one of the initial purposes of marketing; getting customers to pick your product over those of your competitors. When all other parts of the marketing mix are equal it can be branding that sways a customer’s decision.
Putting it into Practice
As previously mentioned each business is different 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.
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