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.
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 anyone 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 shoppers, who only want to spend their cash 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 extensive topic that is affected by a great deal of internal and external factors, but when done well it can be the single business practice that could make or break a company. Any time spent on marketing will reap rewards, although spending this time efficiently can yield incredible results.
So where should you start when constructing a marketing strategy for your own company? Well, each situation is different, and every industry will have its own set of advantages and weaknesses 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 phrase 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 demonstrates the fact that marketing is not a straightforward, blunt-edged business technique, but rather a delicate balance of different aspects 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 concept 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 associate the elements of marketing to the strengths of their own companies, and by doing so could very quickly form a personalised and effective marketing plan.
Our organisation created a marketing plan for our own industrial floor maintenance services by making use of this marketing mix to identify our marketing strengths.
Product
Although every aspect 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 company will be offering, and at the end of the day it is the reason that buyers are going to spend money with you.
Several people do not think that marketing has any place to play when it comes to the physical product that your business is selling. In fact, the typical 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? This is not always the case.
Consider 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 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 types of product are desired in the current marketplace, and how viable it would be to produce and sell them.
Once your goods have been fashioned and created it is still a vital skill to be able to objectively evaluate your own products to identify the reasons why a customer would buy your product rather than a competitors’.
A different form of this part of the marketing mix is called product variation and is typically used to either extend the lifecycle of a product already in the market, or to make your new product attractive to as many customers as possible.
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 good effect to sell their own goods in an extremely competitive marketplace.
We do not have a specific marketing department within our own spiked running shoes operation though many of our own administrators have been able to adopt marketing as part of their work function.
Price
Another important factor in the marketing mix relates to the price of your products or services. This isn’t a simple case of performing market research to figure out the top price that your customers would pay (although that can be a handy tool to use), but rather using the price of your products as a strategic tool designed to achieve any specific targets your company has. The potential benefits of an effective pricing strategy are surprisingly large!
Although it may seem obvious, it’s 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 constantly consider the cheapest price to be the best value.
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 competitors are doing and how can pricing maximise your own profits. From a strategy point of view though, pricing can be covered by two main principals; price skimming and also penetration pricing.
Price skimming
The main 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 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 launch 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 core of customers that would pay it. By using 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 other end of the pricing spectrum, and is tailored 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 used correctly it can create revenue streams for many years to come. When setting a price for penetration it is still important to not give a poor impression of your product by aiming for too low a number.
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 produce or carry out. So it is even more vital to get your pricing technique right.
SEO companies are more common these days and our business employed them to have cooking times a dominant phrase for our website to attract more shoppers.
Place
Place is the portion of the marketing mix that’s often overlooked by companies, but it is still an important part of selling your product effectively. In a nutshell, it describes the method in which you provide your product to your customer, and consequently how you collect money from them.
The most common ramifications of place-based marketing are the physical venues in which your products are sold. For the majority of consumer products, this involves the distribution infrastructure between your manufacturing plants and retailers and other outlets around the country. Since distribution of a physical product costs money it is crucial to identify your own priorities and adapt your distribution network accordingly. This is the principal application of this element of the marketing mix.
With the increasing 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 point 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 possible customers. Effective placing of your product or service can therefore deliver impressive financial results.
Promotion
When you mention 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 employed on a very individual basis or as a mass communication tool, and whilst it can 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. Typically 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 just as targeted advertising materials posted through your front door. The potential for individualised advertising has never been so good.
Another significant part of promotion involves branding, which may not necessarily yield more product sales directly, but relates back to one of the initial functions of marketing; getting customers to choose your product over those of your competitors.
Putting it into Practice
As previously mentioned each company is unique and will have different marketing requirements. By using a mixture of the four P’s reviewed above you can take a good view of your own marketing plan.