A Guide To Marketing
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. This fundamental principle is fairly straight-forward, though it contains many intricate details.
First of all, it is a very rare case that 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 make money from the same shoppers, who only want to spend their money once.
Marketing is the main tool used by modern firms to draw potential 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 factors, but when done well it can be the single business practice that could make or break a company.
So where should you begin when constructing a marketing strategy for your own company? Well, every 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 principle 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 a phrase 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 subtle balance of different elements of business functions. It got its name since 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 business managers and marketers to swiftly relate the elements of marketing to the strengths of their own companies, and by doing so could very quickly form a tailored and efficient marketing plan.
Our business already sells a profitable range of sound equipment but we still use fresh promotional ideas to improve our revenue numbers.
Product
Whilst every element of the marketing mix is a necessity, the “product” element mentioned as one of the four P’s is possibly the most crucial of all. It describes the physical product or intangible service that your business will be offering, and at the end of the day it is the reason that customers are going to spend money with you.
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 typical train of thought very often bears the precise opposite sentiment. Surely it should be the other 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? This is not always the case.
Consider the computer software market as an example. There are many established brands of both operating system and software application solutions on the market already, and because the market is relatively well saturated it would be incredibly tough (and expensive) to “take on the big boys”.
Rather than creating an operating system and then attempting to craft a marketing strategy to rival the likes of Microsoft and Apple, it would be far 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. By being aware of the marketing mix early on in your product development period you can prevent business dead-ends at a later stage.
Once your goods have been fashioned and created it is still a vital skill to be able to objectively evaluate your own products to recognise the reasons why a customer would buy your product rather than a competitors’. The technique is called product differentiation and forms one of the fundamental skills of the product part of the marketing mix pie.
Another form of this part of the marketing mix is called product variation and is typically used to either lengthen the lifecycle of a product already in the market, or to make your new product attractive to as many customers as possible. Once again, this method can be applied at all stages of product development.
The car industry uses this approach very effectively by offering different 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 incredibly competitive marketplace.
As part of our individual marketing method, our business very carefully studied exactly what made our products stand out from the crowd.
“Product is paramount” is one of the slogans applied within our event management business which aims to emphasise to all employees that we expect top quality production.
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 determine the top price that your customers would spend (although that can be a useful tool to use), but rather making use of the price of your products as a strategic tool designed to achieve any particular targets your company has.
Although it may seem obvious, it’s still worth pointing out that price has always been, and probably 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 lowest price to be the best value. Actually a price that is too low can sometimes turn buyers away.
There are many questions that you need to ask yourself when devising a good pricing strategy, key among which are the price sensitivity of your clients, what your rivals are doing and how can pricing maximise your own profits. From a strategy point of view though, pricing can be covered by two primary principals; price skimming and also penetration pricing. These are outlined below.
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 are going to be prepared to spend a premium amount of money to get a product or service early on. Not only can this technique deliver excellent financial benefits, but it can also promote an exclusive and high quality image of your item.
This pricing technique is very often 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 almost 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 other end of the pricing spectrum, and is geared towards gaining a large market share at a short-term cost so that financial rewards 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 bear in mind is that “price” is the only 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 undertake.
We were able to use our past marketplace analysis regarding mens croc sandals to start all on-line key word optimisation we were undertaking.
Place
Place is the part of the marketing mix that’s 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 customer, and consequently how you receive money from them. It can be a great marketing technique when applied correctly.
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 production plants and retailers or other outlets around the world. Since distribution of a physical product costs money it is important to determine your own priorities and adjust your distribution network accordingly. This is the main application of this element of the marketing mix.
With the increasing 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 whole distribution channel in download-based markets such as MP3s) companies are now able to reach out to a large pool of possible customers. Effective positioning of your product or service can therefore deliver impressive economic results.
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 comprehensive system. Promotion can be used on a very individual basis or as a mass communication tool, and whilst it might be a costly undertaking it is often an essential one.
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 handing out flyers or leaflets to potential buyers. With the arrival 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 important part of promotion involves branding, which may not necessarily yield more product sales directly, but goes back to one of the preliminary purposes of marketing; getting customers to pick your product over those of your rivals.
Putting it into Practice
As previously mentioned each company is different and will have different marketing requirements. By using a mixture of the four P’s discussed above you can take an effective view of your own marketing strategy.
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