Practically every company on the planet sets out with the primary 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 principle is fairly straight-forward, although it contains many specific 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 provided by anybody else. This means that your business will be contesting 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 money once.
Marketing is the main tool used by modern firms to draw prospective customers to do business with them and not with their competitors. It is a very broad topic that is influenced by a great number of internal and external variables, but when done well it can be the single business practice that could make or break a corporation. Any time spent on marketing will reap rewards, although spending this time efficiently can yield incredible results.
So where should you begin when creating a marketing strategy for your own company? Well, every situation is different, and every company 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 framework.
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 describe 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 delicate balance of different elements of business functions. It got its name because it is similar to the ingredients checklist for a recipe.
The term was later developed to include the idea of “four P’s” that described the essential 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 create a customised and efficient marketing plan.
Our company created a marketing approach for our event management services by applying the advertising and marketing mix to identify our marketing advantages.
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 element is not correctly managed then your organisation will find it hard to survive.
Several 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 an item 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 established brands of both operating system as well as software application products on the market already, and since the market is relatively well saturated it would be very tough (and expensive) to “take on the big boys”. So how can the principles of the marketing mix help 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 sought after in the current marketplace, and how viable it would be to produce 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’. The technique is called product differentiation and forms one of the basic skills of the product part of the marketing mix pie.
A different 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 currently in the market, or to make your new product attractive to as many consumers as possible.
The motor industry uses this technique very effectively by offering various engines, trim packages and interior options with the cars that they sell. They use the marketing mix to good effect to sell their own products in an incredibly competitive marketplace. Although these companies may have substantial marketing budgets, the same principles can be applied to all companies.
As part of our individual promotion plan, our business very carefully studied exactly what made our products stand out from the crowd.
To preserve a standard corporate image a company should update their own website to echo colors, text and also images associated with their branding.Our conference production company website is being redesigned at the moment.
Price
Another key 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 pay (although that can be a useful tool to use), but rather using the price of your products as a strategic weapon designed to achieve any specific objectives your business has. The potential advantages of an effective pricing strategy are surprisingly substantial!
Whilst 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 do not always consider the cheapest price to be the best price.
There are many questions that you need to ask yourself while devising a good pricing strategy, 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 primary principals; price skimming and penetration pricing.
Price skimming
The main 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 get 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 release 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.
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 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.
Another thing to bear 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.
SEO firms are more common these days and our organisation used one in order to make whale festival hermanus a prominent phrase for our website so we can attract more shoppers.
Place
Place is the component of the marketing mix that’s often disregarded by companies, but it’s still a significant part of selling your product successfully. In a nutshell, it describes the way in which you provide your product to your customer, and consequently how you receive money from them.
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 plants and retailers and 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. This is the main use of this element 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 whole distribution route in download-based markets such as MP3s) companies are now able to reach out to a huge pool of possible customers.
Promotion
When you say 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 instrument, and whilst it might be a costly undertaking it is often an important one.
Advertising is one of the most common forms of promotion. Typically 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 customers. 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 front door. The potential for individualised advertising has never been so good.
Another significant part of promotion involves branding, which will not necessarily yield more sales directly, but relates 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 mixture of the four P’s reviewed above you can take an effective view of your own marketing strategy.
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