Practically every business on the planet sets out with the main objective of earning money. This is usually done by manufacturing some form of product, or offering a service, and then charging customers 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 anybody else. This means that your company will be competing with other businesses that sell a similar product and you will both be trying to earn money from the same customers, who only want to spend their cash once.
Marketing is the main tool used by modern businesses to draw potential customers to do business with them and not with their rivals. It is a very broad topic that is influenced by a great deal of internal and external variables, but when done well it can be the one business practise that can make or break a company.
So where should you begin 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 corporation to be used as a marketing platform.
The Marketing Mix
The marketing mix was a phrase 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 reflects the fact that marketing is not a straightforward, blunt-edged business tool, but rather a delicate balance of different elements of business functions.
The term was later built upon 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 business managers and marketers to quickly associate the elements of marketing to the strengths of their own companies, and by doing so could very rapidly form a customised and efficient marketing strategy. The four P’s are Product, Price, Place and Promotion.
Our organisation has grown to be a forerunner for Nottingham commercial floor cleaning since employing tailored marketing ideas across our entire range of products.
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 crucial of all. It identifies the physical product or intangible service that your company 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 correctly managed then your company will find it hard to make it through.
Several people do not think that marketing has any role to play when it comes to the actual 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 manufacturing department creates a product 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 and software application products on the marketplace already, and because the market is fairly well saturated it would be very tough (and expensive) to “take on the big boys”. So how could 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 rival the likes of Microsoft or Apple, it would be far more effective to look at what sorts of product are desired in the current marketplace, and how viable it would be to produce and sell them.
Once your products have been designed and created it is still a critical skill to be able to objectively evaluate your own products to identify the reasons why 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 typically used to either prolong the lifecycle of a product currently in the market, or to make your new product attractive to as many consumers as possible.
The car industry uses this approach very effectively by offering various engines, trim packages and interior options with the cars that they sell. They use the marketing mix to great effect to sell their own goods in an incredibly competitive marketplace. Whilst these companies may have huge marketing budgets, the same concepts can be applied to all companies.
“Product is paramount” is one of the mottos applied in our sunny plants organisation which tries to emphasise to all employees that we expect high quality manufacturing.
Price
Another important 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 spend (although that can be a handy tool to use), but rather using the price of your products as a strategic weapon designed to achieve any particular goals your business has.
Whilst 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 shoppers 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 buyers away.
There are many questions that you need to ask yourself when devising a good pricing strategy, 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 though, pricing can be covered by two main principals; price skimming and penetration pricing. These are outlined below.
Price skimming
The main idea driving price skimming is to make as much money as possible from the sector of the market which is price-insensitive and are going to be willing to spend a premium amount of money to get 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. Manufacturers could set almost any price they wanted to and there would still be a loyal core 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 money 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 earned long into the future. It can be a risky strategy, but when employed correctly it can create revenue streams for many years to come. When establishing a price for penetration it is still important to not give a bad 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 income for a business. The other members of the four P’s will all cost money to produce or carry out.
When marketing your corporate website it’s important to select the right key phrase. Beef cooking suited our company the best and we have made the appropriate marketing modifications.
Place
Place is the portion of the marketing mix that is often overlooked 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 consumer, and subsequently how you receive money from them.
The most common implications of place-based marketing are the physical locations in which your products are sold. For the majority of consumer products, this includes the distribution network between your manufacturing plants and shops and other outlets around the country. Since distribution of a physical product costs money it is important to determine your own priorities and alter your distribution network appropriately.
With the growing use of the Internet by your prospective customers, marketing strategies have had to take into account 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 large pool of potential customers.
Promotion
When you say the word “marketing”, many 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 used on a very individual basis or as a mass communication instrument, and whilst it might be an expensive 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, creating 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 seen a great increase in promotion via e-mail and the Internet, or just as targeted advertising material posted through your front door. The potential for individualised advertising has never been so great.
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 pick your product over those of your rivals. When all other pieces of the marketing mix are equal it can be branding that sways a customer’s choice.
Putting it into Practise
As previously mentioned every business is different and will have different marketing needs. By using a balance of the four P’s discussed above you can take a good view of your own marketing strategy.