Step 48

Nearly every business on the planet sets out with the main objective of making money. This is generally 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, though it contains many specific 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 anyone else. This means that your business will be competing with other businesses that sell a similar item and you will both be trying to earn money from the same customers, who only want to spend their money once.

Marketing is the primary tool used by modern organisations 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 factors, but when done well it can be the single business practise that can make or break a company. Any time spent on marketing will reap rewards, although spending this time correctly can yield extraordinary results.

So where should you begin 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 weak points 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 known as the “Marketing Mix”.

The Marketing Mix

The marketing mix was a term 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 demonstrates the fact that marketing is not a simple, blunt-edged business tool, but rather a subtle balance of different elements 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 company managers and marketers to quickly relate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly form a customised and effective marketing system.

The “product” aspect of the four P’s could refer to a product, such as chiropractors Nottingham, or any intangible service being offered for sale by a business.

Product

Although every aspect 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 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 do not think that marketing has any role to play when it comes to the physical product that your company 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 production 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 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”.

Rather than developing 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 desired in the current marketplace, and how viable it would be to manufacture and sell them.

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 that a customer should buy your product rather than a competitors’.

Another form of this part of the marketing mix is called product variation and is typically used to either extend the lifecycle of a product currently in the market, or to make your brand new product attractive to as many consumers as possible. Again, this technique can be applied at all stages of product development.

The motor industry uses this technique very effectively by offering various engines, trim packages and interior options with the cars that they offer. They use the marketing mix to great effect to sell their own products in an extremely competitive marketplace.

As part of our individual marketing plan, our how to make cake enterprise very carefully researched what exactly made our products stand out from the crowd.

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 highest price that your customers would pay (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 objectives your business has. The potential benefits of an effective pricing strategy are surprisingly large!

Although it may seem obvious, it is still worth noting 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 lowest price to be the best value. In fact a price that is too low can sometimes 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 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. These are outlined below.

Price skimming

The principal idea driving price skimming is to make as much money 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.

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. 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 opposite end of the pricing spectrum, and is geared towards gaining a large market share at a short-term cost so that monetary benefits can be made long into the future. It can be a high risk strategy, but when employed correctly it can setup revenue streams for many years to come. When setting a price for penetration it is still critical to not give a poor impression of your product by aiming for too low a number.

Yet another thing to keep in mind is that “price” is the only 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 create or carry out. So it is even more vital to get your pricing technique right.

We were able to make use of our previous marketplace analysis about the best songs to kick off all online keyword optimisation we were undertaking.

Place

Place is the part of the marketing mix that’s 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 consequently how you receive money from them.

The most common ramifications of place-based marketing are the physical venues in which your goods are sold. For the majority of consumer products, this involves 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 important to identify your own priorities and adjust your distribution network appropriately.

With the increasing use of the Internet by your potential customers, marketing methods have had to consider 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) companies are now able to reach out to a large pool of potential customers. Effective placing of your product or service can therefore yield impressive financial results.

Promotion

When you mention the word “marketing”, most people immediately think of the promotional aspect of the marketing mix, although as we have seen, this is only 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 essential one. The primary concern of promotion is to deliver a specific message that will improve sales.

Advertising is one of the most common 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 customers. With the coming of the information age we have seen a great increase in promotion via e-mail and the Internet, or just as targeted advertising materials posted through your door.

Another significant part of promotion involves branding, which may not necessarily yield more product sales directly, but relates back to one of the initial purposes of marketing; getting customers to choose your product over those of your rivals.

Putting it into Practise

As previously mentioned each business 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.

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