Practically every business on the planet sets out with the primary objective of making 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 that a company can offer a product or service that is truly unique and cannot be supplied by anyone else. This means that your business will be contesting with other businesses that sell a similar product 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 affected by a great number of internal and external variables, but when done well it can be the one business practice that could make or break a company. Any time spent on marketing will reap benefits, although spending this time efficiently can yield incredible outcomes.
So where should you start when constructing a marketing strategy for your own business? Well, every situation is different, and each business will have its own set of strengths and weaknesses 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 in the 1950′s and is an expression that is used to express the fundamental building blocks of any marketing system. It demonstrates the fact that marketing is not a simple, blunt-edged business tool, but rather a delicate balance of different aspects of business functions.
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 clear 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 system.
There are several sales avenues available to event planning so our company applied marketing ideas to open new paths to our customers.
Product
Although every element of the marketing mix is a necessity, 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 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 make it through.
Many people don’t 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 precise opposite sentiment. Surely it should be the opposite way around – your production 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 well-known brands of both operating system as well as software application products 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”. 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 rival 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 manufacture and sell them.
Once your products have been fashioned and created it is still a critical skill to be able to objectively review your own products to identify the reasons that a customer should buy your product rather than a competitors’.
A different form of this part of the marketing mix is called product variation and is generally used to either extend the lifecycle of a product currently in the market, or to make your brand new product attractive to as many customers as possible.
The motor industry uses this approach 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 incredibly competitive marketplace. Although these companies may have huge marketing budgets, the same concepts can be applied to all companies.
As part of our own promotion strategy, our business very carefully studied what exactly made our goods stand out from the masses.
“Product is paramount” is one of the mottos applied within our event management business and tries to remind all employees that we expect high quality manufacturing.
Price
Another key factor in the marketing mix relates to the price of your products or services. This is not a simple case of performing market research to determine the highest 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 weapon designed to achieve any specific goals 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 probably 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 do not always consider the cheapest price to be the best value. Actually a price that is too low can sometimes turn customers away.
There are many questions that you need to ask yourself while devising a good pricing strategy, key among which are the price sensitivity of your customers, what your competitors are doing and how can pricing maximise your own profits. From a strategy point of view however, pricing can be covered by two primary principals; price skimming and also penetration pricing.
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 will be willing to spend a premium amount of money to receive a product or service early on.
This pricing strategy is very often 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 nearly 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 cash flow.
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 benefits can be made 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.
Another thing to keep in mind is that “price” is the one 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 create or carry out. So it is even more vital to get your pricing strategy right.
“Product is paramount” is one of the slogans used within our mens shooting socks firm which aims to emphasise to all staff that we expect top quality manufacturing.
Place
Place is the portion of the marketing mix that’s often not addressed by companies, but it is still a significant part of selling your product successfully. In a nutshell, it describes the way in which you deliver your product to your consumer, and subsequently how you collect money from them.
The most typical implications 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 infrastructure between your manufacturing centres and shops or other outlets around the country. Since distribution of a physical product costs money it is crucial to identify your own priorities and adjust your distribution network appropriately.
With the growing use of the Internet by your potential customers, marketing techniques 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 a complete distribution route in download-based markets such as MP3s) companies are now able to reach out to a large pool of potential customers. Effective positioning of your product or service can therefore yield impressive economic results.
Promotion
When you mention the word “marketing”, most people instantly think of the promotional aspect of the marketing mix, although as we have seen, this is merely 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 may be a costly undertaking it is often an essential one. The key concern of promotion is to deliver a specific message that will improve sales.
Advertising is one of the most typical 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 coming of the information age we have witnessed a great increase in promotion via e-mail and the Internet, or simply as targeted advertising materials posted through your front door. The potential for individualised advertising has never been so good.
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 could be branding that swings a customer’s choice.
Putting it into Practice
As previously mentioned every company is different and will have different marketing requirements. By using a mixture of the four P’s discussed above you can take a good view of your own marketing plan.