The Marketing Mix
Nearly every company on the planet sets out with the main objective of making money. This is usually done by producing some form of product, or offering a service, and then charging customers money for it. This fundamental theory is fairly straight-forward, although it contains many intricate details.
Firstly, it is a very rare case where a business can offer a product or service that is genuinely unique and cannot be supplied by anybody else. This means that your business will be competing 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 organisations 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 deal of internal and external factors, but when done well it can be the single business practise that could make or break a corporation.
So where should you start when constructing a marketing strategy for your own business? Well, each situation is different, and each industry will have its own set of strengths and flaws that must be taken into consideration, but there is a marketing rule 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 an expression that is used to express the fundamental building blocks of any marketing system. It demonstrates the fact that marketing is not a straightforward, blunt-edged business technique, but rather a delicate balance of different elements of business operations.
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 clear for company managers and marketers to swiftly relate the elements of marketing to the strengths of their own companies, and by doing so could very quickly create a customised and effective marketing plan. The four P’s are Product, Price, Place and Promotion.
There are multiple sales channels for Nottingham floor painters so our own business used marketing ideas to open new routes to our buyers.
Product
Although every element of the marketing mix is a requirement, 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 buyers are going to spend money with you. If this part is not correctly managed then your company will find it hard to survive.
Many people don’t think that marketing has any place to play when it comes to the actual product that your company is selling. In fact, the typical train of thought very often bears the exact opposite sentiment. Surely it should be the opposite way around – your manufacturing department creates an item for sale and then it is the task of the marketing department to find ways to sell it, right?
Consider the computer software market as an example. There are many established brands of both operating system and software application products on the market already, and since the market is fairly well saturated it would be very tough (and expensive) to “take on the big boys”.
Rather than developing an operating system and then attempting to craft a marketing strategy to take on the likes of Microsoft and Apple, it would be far more effective to look at what types of product are desired in the current marketplace, and how feasible it would be to produce and sell them. By being mindful of the marketing mix early on in your product development period you can avoid business dead-ends at a later time.
Once your products have been designed and created it is still a critical skill to be able to objectively review your own products to recognise the reasons that a customer should buy your product rather than a competitors’. The skill is called product differentiation and is one of the basic skills of the product part of the marketing mix cake.
Another form of this part of the marketing mix is called product variation and is generally used to either prolong the lifecycle of a product already 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 offer. They use the marketing mix to great effect to sell their own goods in an extremely competitive marketplace. Although these companies may have huge marketing budgets, the same principles can be applied to all companies.
We do not have a distinct promotion team in our new xbox hard drive price operation though many of our managers have been able to take up marketing as part of their job function.
Price
Another key 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 pay (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 objectives your company has. The potential advantages of an effective pricing strategy are surprisingly substantial!
Although it may seem obvious, it’s still worth pointing out that price has always been, and probably always will be, one of the crucial 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 when devising a good pricing strategy, key amongst which are the price sensitivity of your customers, what your rivals 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 penetration pricing. These are outlined below.
Price skimming
The principal idea behind price skimming is to make as much cash as possible from the segment of the market which is price-insensitive and will be prepared to spend a premium amount of money to get a product or service early on. Not only can this approach deliver great financial advantages, but it can also advertise an exclusive and high quality image of your item.
This pricing strategy is very often used in the consumer electronics industry where customers will often eagerly await the launch 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 other end of the pricing spectrum, and is geared towards gaining a large market share at a short-term cost so that monetary benefits can be earned long into the future. It can be a high risk strategy, but when employed correctly it can setup revenue streams for many years to come.
Yet 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 undertake. So it is even more vital to get your pricing strategy right.
Grabbing any of the on-line search market is extremely beneficial, so pick any phrase, just like become a doctor and evaluate if the phrase has an adequate search marketplace for your needs.
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 a nutshell, it describes the method in which you provide your product to your consumer, and subsequently how you receive money from them. It can be a fantastic marketing technique when used 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 network between your production centres and retailers and other outlets around the country. Since distribution of a physical product costs money it is crucial to determine your own priorities and modify your distribution network appropriately. This is the principal use of this part of the marketing mix.
With the increasing 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 place of contact (or even as an entire distribution channel in download-based markets such as MP3s) companies are now able to reach out to a large pool of potential customers. Effective placing of your product or service can therefore yield impressive economic results.
Promotion
When you say 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 complete system. Promotion can be employed on a very individual basis or as a mass communication tool, and whilst it might be a costly undertaking it is often an important one.
Advertising is one of the most typical 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 buyers. With the arrival of the information age we have witnessed 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 may not necessarily yield more sales directly, but relates back to one of the initial functions of marketing; getting customers to pick your product over those of your competitors.
Putting it into Practise
As previously mentioned every business is unique 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.
This entry was posted on Sunday, February 27th, 2011 at 5:10 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.