Practically every company 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 people money for it.
Firstly, it is a very rare case where a business can offer a product or service that is truly unique and cannot be supplied by anyone else. This means that your company 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 money once.
Marketing is the main tool used by modern organisations 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 well it can be the single business practice that could make or break a corporation.
So where should you start when constructing a marketing strategy for your own business? Well, each situation is different, and each business 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 term that was first coined during the 1950′s and is an expression 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 elements of business functions.
The term was later built upon 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 clear for company 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 customised and effective marketing strategy.
Our organisation created a promotional plan for our development and planning conultants products by using this marketing mix to identify our marketing strengths.
Product
Whilst every element of the marketing mix is a necessity, the “product” element mentioned as one of the four P’s is perhaps the most critical of all. It describes 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. If this element is not adequately managed then your company will find it hard to survive.
Many people don’t think that marketing has any role 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 a product for sale and then it is the task of the marketing department to find ways to sell it, right?
Take the computer software market as an example. There are many well-known brands of both operating system as well as software application solutions in 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 situation?
Rather than developing 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 desired 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 prevent business dead-ends at a later time.
Once your goods have been fashioned and created it is still a critical skill to be able to objectively review your own products to recognise the reasons that a customer would buy your product rather than a competitors’. The skill is called product differentiation and forms one of the fundamental skills of the product part of the marketing mix cake.
Another form of this part of the marketing mix is known as product variation and is generally used to either extend the lifecycle of a product already in the market, or to make your brand new product attractive to as many customers as possible. Once again, this method can be applied at all stages of product development.
The motor industry uses this approach very effectively by offering various 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 extremely competitive marketplace. Although these companies may have substantial marketing budgets, the same principles can be applied to all businesses.
As part of our own business promotion system, our business very carefully researched what made our goods stand out from the masses.
Price
Another important factor in the marketing mix concerns 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 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 pointing out that price has always been, and likely 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. 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 primary principals; price skimming and penetration pricing.
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 technique 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. Makers could set almost any price they wanted to and there would still be a loyal base 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 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 create revenue streams for many years to come. When establishing a price for penetration it is still important to not give a bad impression of your product by aiming for too low a number.
Another thing to bear in mind is that “price” is the one part of the marketing mix that will generate revenue for a business. The other members of the four P’s will all cost money to produce or carry out. So it is even more vital to get your pricing strategy right.
To optimize our website for search engine visibility we chose electrical apprenticeships for an aimed key phrase because 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 a significant part of selling your product successfully. In short, it describes the way in which you deliver your product to your consumer, and consequently how you receive money from them. It can be a great marketing approach when applied appropriately.
The most typical ramifications 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 network between your production centres and retailers and other outlets around the world. Since distribution of a physical product costs money it is crucial to determine your own priorities and adjust 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 prospective customers, marketing methods 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 an entire distribution route in download-based markets such as MP3s) companies are now able to reach out to a huge pool of potential customers.
Promotion
When you say the word “marketing”, many people instantly think of the promotional side of the marketing mix, although as we have seen, this is merely 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 might be an expensive undertaking it is often an important one. The key concern of promotion is to deliver a specific message that will increase sales.
Advertising is one of the most common forms of promotion. Classically it would be done by posting on billboards, creating short clips for TV and radio or by physically distributing 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 material posted through your door. The potential for individualised advertising has never been so great.
Another important part of promotion involves branding, which may not necessarily yield more sales directly, but goes back to one of the initial purposes of marketing; getting customers to choose your product over those of your competitors.
Putting it into Practice
As previously mentioned every business is unique and will have different marketing requirements. By using a balance of the four P’s reviewed above you can take a good view of your own marketing strategy.