Business Marketing
Almost every company on the planet sets out with the main 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. This fundamental principle is fairly straight-forward, though it contains many specific details.
Firstly, it is a very rare case where 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 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 money once. So how can you improve the chances of them spending money with you?
Marketing is the main tool used by modern organisations 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 number of internal and external variables, but when done right it can be the one business practise that could make or break a company.
So where should you start when constructing a marketing strategy for your own company? Well, every situation is different, and each industry 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 corporation to be used as a marketing platform. 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 describe the fundamental building blocks of any marketing system. It reflects the fact that marketing is not a simple, blunt-edged business technique, but rather a delicate balance of different elements of business operations.
The term was later built upon to include the concept 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 companies, and by doing so could very quickly form a tailored and effective marketing system.
The “product” element of the four P’s could pertain to a service, such as bad back treatment Ruddington, or any non-physical asset being offered for sale by a business.
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 critical 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 customers are going to spend money with you. If this element is not correctly managed then your organisation will find it hard to survive.
Several 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 common train of thought very often bears the exact 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 discover ways to sell it, right? This is not always the case.
Consider the computer software market as an example. There are many well-known brands of both operating system and software application products in the marketplace already, and because the market is fairly well saturated it would be very tough (and expensive) to “take on the big boys”.
Rather than creating 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 viable it would be to produce and sell them.
Once your goods have been designed and created it is still a vital skill to be able to objectively evaluate your own products to recognise the reasons that a customer would buy your product rather than a competitors’. The technique is called product differentiation and forms one of the basic skills of the product part of the marketing mix pie.
Another form of this part of the marketing mix is known as product variation and is typically used to either lengthen the lifecycle of a product currently in the market, or to make your brand new product attractive to as many consumers as possible.
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 incredibly competitive marketplace.
With the rise of the Internet and ecommerce companies find their sites such as lace tablecloths could be used for a direct sales channel and distribution system.
Price
Another key factor in the marketing mix concerns the price of your products or services. This is not a simple case of performing market research to figure out the highest price that your customers would pay (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 targets your company has.
Although it may seem obvious, it is still worth pointing out that price has always been, and probably always will be, one of the crucial factors that shoppers take into account when they are making a purchase. It is also worth noting that customers do not constantly consider the cheapest price to be the best value. In fact a price that is too low can often turn customers away.
There are many questions that you need to ask yourself while devising a good pricing plan, key amongst 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 penetration pricing.
Price skimming
The principal idea driving price skimming is to make as much money as possible from the sector 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 economic benefits, but it can also promote an exclusive and high quality image of your product.
This pricing technique is very often used in the consumer electronics market where customers will often eagerly await the release of a new mobile phone or computer games console. Manufacturers could set nearly any price they wanted to and there would still be a loyal core of customers that would pay it. By using 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 other 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 earned 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 income for a business. The other members of the four P’s will all cost money to create or undertake.
Our business wanted to appeal to a larger marketplace and concentrating on mens pink clothing helped boost our visibility in the international business network.
Place
Place is the component of the marketing mix that’s often disregarded by companies, but it is still a significant part of selling your product successfully. In short, it describes the way in which you provide your product to your customer, and subsequently how you receive money from them.
The most typical ramifications of place-based marketing are the physical venues in which your goods are sold. For the majority of consumer products, this involves the distribution infrastructure between your manufacturing centres and shops and other outlets around the world. Since distribution of a physical product costs money it is crucial to identify 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 consider 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 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 mention 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 can be a costly undertaking it is often an important one. The primary concern of promotion is to deliver a particular message that will boost sales.
Advertising is one of the most typical 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 coming of the information age we have witnessed a great increase in promotion via e-mail and the Internet, or just as targeted advertising materials posted through your front door. The potential for individualised advertising has never been so good.
Another important part of promotion involves branding, which may not necessarily yield more sales directly, but relates back to one of the preliminary functions of marketing; getting customers to choose your product over those of your competitors. When all other parts of the marketing mix are equal it can be branding that swings a customer’s choice.
Putting it into Practise
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 plan.