Almost every company on the planet sets out with the primary objective of earning money. This is usually 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 that a company can offer a product or service that is truly unique and cannot be supplied by anyone else. This means that your company will be contesting 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 businesses to draw prospective customers to do business with them and not with their competitors. It is a very extensive topic that is influenced by a great deal of internal and external factors, but when done well it can be the one business practice that can make or break a corporation. Any time spent on marketing will reap benefits, although spending this time efficiently can yield incredible results.
So where should you begin when creating a marketing strategy for your own company? Well, every situation is different, and each company will have its own set of strengths and weaknesses 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. It is known as the “Marketing Mix”.
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 reflects the fact that marketing is not a straightforward, blunt-edged business tool, but rather a subtle balance of different aspects of business operations.
The term was later built upon 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 business managers and marketers to swiftly relate the elements of marketing to the strengths of their own companies, and by doing so could very rapidly create a customised and effective marketing plan. The four P’s are; Product, Price, Place and Promotion.
There are several sales channels for environmental flag products and our business used marketing ideas to open new routes to our buyers.
Product
Although every aspect of the marketing mix is a requirement, the “product” element mentioned as one of the four P’s is possibly the most critical 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 buyers are going to spend money with you. If this element is not adequately managed then your organisation 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 actual 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 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 established brands of both operating system and software application solutions in the market already, and since the market is relatively well saturated it would be incredibly 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 more effective to look at what types of product are sought after in the current marketplace, and how viable it would be to produce and sell them.
Once your products have been fashioned and created it is still a vital skill to be able to objectively evaluate your own products to identify the reasons that 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 generally used to either extend the lifecycle of a product currently 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 technique very effectively by offering various engines, trim packages and interior options with the cars that they sell. They use the marketing mix to good effect to sell their own goods in an extremely competitive marketplace.
To preserve a standard corporate image a company should update their website to reflect colourings, text and also graphics associated with their branding.
Price
Another important factor in the marketing mix relates to the price of your products or services. This is not a simple case of carrying out market research to figure out 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 targets your company has.
Whilst 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 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 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 rivals are doing and how can pricing boost 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 behind 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 prepared to spend a large amount of money to receive a product or service early on. Not only can this technique yield excellent economic 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. 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 monetary benefits can be made long into the future. It can be a risky strategy, but when employed 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 earnings for a business. The other members of the four P’s will all cost money to produce or carry out.
When our company was doing market research before a brand new product launch I discovered paper flags was the key word that promoted the most “value for money” impression.
Place
Place is the portion of the marketing mix that is often overlooked by companies, but it is still a significant part of selling your product effectively. In short, it describes the way in which you provide your product to your consumer, and consequently how you receive money from them. It can be a fantastic marketing technique when used correctly.
The most typical implications of place-based marketing are the physical venues in which your products are sold. For the vast majority of consumer products, this involves the distribution network between your production centres and shops or other outlets around the country. Since distribution of a physical product costs money it is crucial to determine your own priorities and adapt your distribution network appropriately. This is the primary application of this part of the marketing mix.
With the growing use of the Internet by your prospective customers, marketing methods 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 potential customers.
Promotion
When you mention the word “marketing”, most people instantly 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 employed on a very individual basis or as a mass communication tool, and whilst it can 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 distributing flyers or leaflets to potential customers. 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 door. The potential for individualised advertising has never been so good.
Another important part of promotion involves branding, which may not necessarily yield more product sales directly, but relates back to one of the initial purposes of marketing; getting customers to pick your product over those of your competitors.
Putting it into Practice
As previously mentioned every business is different and will have different marketing needs. By using a mixture of the four P’s reviewed above you can take a good view of your own marketing strategy.
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