Modern Marketing
Almost every business on the planet sets out with the main objective of making money. This is generally done by manufacturing some form of product, or offering a service, and then charging people money for it.
First of all, it is a very rare case where a business can offer a product or service that is truly unique and cannot be supplied by anyone 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. So how can you boost the chances of them spending money with you?
Marketing is the primary tool used by modern organisations to draw prospective customers to do business with them and not with their rivals. It is a very extensive topic that is influenced by a great deal of internal and external variables, but when done well it can be the single business practise that can make or break a company. Any time spent on marketing will reap rewards, although spending this time efficiently can yield extraordinary results.
So where should you begin when creating a marketing strategy for your own business? Well, every situation is different, and every company will have its own set of advantages 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 platform.
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 subtle balance of different aspects of business functions.
The term was later developed to include the idea of “four P’s” that described the critical elements of the marketing mix. The formalisation of these P’s made it very clear for business managers and marketers to swiftly relate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly create a tailored and effective marketing plan. The four P’s are Product, Price, Place and Promotion.
The “product” aspect of the four P’s could refer to a service, just like chiropractor Nottingham, or any kind of intangible service being provided for sale by a company.
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 critical of all. It identifies 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.
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 exact opposite sentiment. Surely it should be the opposite way around – your production 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 necessarily the case.
Consider the computer software market as an example. There are many well-known 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 creating an operating system and then attempting to craft a marketing strategy to rival the likes of Microsoft and Apple, it would be more effective to look at what sorts 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 avoid business dead-ends at a later stage.
Once your products have been fashioned and created it is still a critical skill to be able to objectively evaluate 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 forms one of the fundamental 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 typically used to either extend the lifecycle of a product currently in the market, or to make your brand new product attractive to as many consumers as possible. Once again, this technique can be applied at all stages of product development.
The motor 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 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.
As part of our own marketing strategy, our AA battery enterprise carefully researched exactly what made our goods stand out from the crowd.
Price
Another key 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 spend (although that can be a useful tool to use), but rather using the price of your products as a strategic tool designed to achieve any specific 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 don’t always consider the lowest price to be the best price.
There are many questions that you need to ask yourself while devising a good pricing strategy, key among 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 main principals; price skimming and also penetration pricing. These are outlined below.
Price skimming
The principal idea behind price skimming is to make as much money as possible from the segment of the market which is price-insensitive and will be prepared to spend a large amount of money to receive a product or service early on.
This pricing strategy is frequently used in the consumer electronics market where customers will often eagerly await the release 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 base of customers that would pay it.
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 rewards can be earned long into the future. It can be a risky strategy, but when employed correctly it can setup 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 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.
Before our company started researching online marketing relating to heated body warmers there didn’t appear an clear choice of key phrase to use as our primary target.
Place
Place is the component of the marketing mix that is often disregarded by companies, but it’s still an important part of selling your product successfully. In short, it describes the way in which you provide your product to your customer, and consequently how you collect money from them. It can be a great marketing approach when used correctly.
The most common ramifications 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 plants and shops or other outlets around the country. Since distribution of a physical product costs money it is important to determine your own priorities and modify your distribution network appropriately. This is the main application of this element of the marketing mix.
With the increasing use of the Internet by your prospective customers, marketing methods have had to take into account how they use the Internet to help deliver 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 possible customers.
Promotion
When you say the word “marketing”, many people instantly 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 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. The key concern of promotion is to deliver a particular message that will improve sales.
Advertising is one of the most common forms of promotion. Classically it would be done by posting on billboards, producing short clips for TV and radio or by physically handing out 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 simply as targeted advertising material posted through your door.
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 rivals.
Putting it into Practise
As previously mentioned every company is unique 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 plan.