The Fundamentals Of 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 customers money for it.
Firstly, it is a very rare case where a company can offer a product or service that is truly unique and cannot be provided by anybody else. This means that your business will be contesting with other businesses that sell a similar product and you will both be trying to earn money from the same shoppers, who only want to spend their cash once. So how can you improve the chances of them spending money with you?
Marketing is the main tool used by modern firms to draw prospective customers to do business with them and not with their competitors. It is a very broad topic that is influenced by a great number of internal and external variables, but when done right it can be the single business practise that could make or break a company. Any time spent on marketing will reap benefits, although spending this time correctly can yield extraordinary outcomes.
So where should you begin when constructing a marketing strategy for your own business? Well, each situation is different, and every business 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 company 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 strategy. It reflects the fact that marketing is not a straightforward, blunt-edged business tool, but rather a subtle balance of different elements of business functions. It got its name since it is similar to the ingredients list for a recipe.
The term was later developed 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 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 tailored and efficient marketing system. The four P’s are Product, Price, Place and Promotion.
While we were preparing the launch of some of our floor scarifiers we used ideas in the marketing mix to devise a plan.
Product
Whilst 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 offering, and at the end of the day it is the reason that buyers are going to spend money with you.
Several people do not think that marketing has any place to play when it comes to the physical product that your company 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 production department creates an item for sale and then it is the job of the marketing department to discover 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 on the market 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 creating an operating system and then attempting to craft a marketing strategy to rival the likes of Microsoft or 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 manufacture and sell them.
Once your goods have been fashioned and created it is still a vital skill to be able to objectively review 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 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 approach 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 products in an incredibly competitive marketplace.
To maintain a standard corporate image a company should redesign their portal an example we found was Maytag refrigerators who echo colourings, fonts 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 performing market research to determine 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 particular goals your company has. The potential advantages of an effective pricing plan are surprisingly substantial!
Although it may seem obvious, it is still worth noting 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 do not constantly consider the lowest 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 while devising a good pricing plan, key amongst which are the price sensitivity of your clients, what your competitors 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 driving 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 premium amount of money to get a product or service early on. Not only can this technique deliver great economic advantages, but it can also advertise an exclusive and high quality image of your product.
This pricing strategy 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 almost 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 geared 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 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 revenue for a business. The other members of the four P’s will all cost money to produce or undertake. So it is even more vital to get your pricing strategy right.
SEO companies are more common these days and our company employed them to have Spanish DVD for children a prominent phrase on our website so we can attract more customers.
Place
Place is the component of the marketing mix that is often not addressed by companies, but it’s still an important part of selling your product successfully. In short, it describes the method in which you deliver your product to your customer, and consequently how you collect money from them. It can be a fantastic marketing technique when used correctly.
The most common implications of place-based marketing are the physical venues in which your goods are sold. For the vast majority of consumer products, this involves the distribution infrastructure between your production centres 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 part of the marketing mix.
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 a whole distribution route in download-based markets such as MP3s) firms are now able to reach out to a huge 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 merely 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 a costly undertaking it is often an essential one. The key concern of promotion is to deliver a specific message that will increase sales.
Advertising is one of the most common forms of promotion. Typically 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 just as targeted advertising material 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 initial purposes of marketing; getting customers to pick your product over those of your rivals. When all other parts of the marketing mix are equal it could be branding that sways a customer’s choice.
Putting it into Practise
As previously mentioned each company is unique and will have different marketing requirements. By using a mixture of the four P’s discussed above you can take an effective view of your own marketing strategy.
This entry was posted on Tuesday, April 27th, 2010 at 3:57 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.