Practically every business on the planet sets out with the primary 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.
First of all, 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 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 money once.
Marketing is the main tool used by modern organisations to draw prospective customers to do business with them and not with their rivals. 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 practice that could make or break a company. Any time spent on marketing will reap rewards, although spending this time efficiently can yield incredible outcomes.
So where should you start when creating a marketing strategy for your own company? Well, every situation is different, and each industry 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 company to be used as a marketing framework.
The Marketing Mix
The marketing mix was a phrase that was first coined in 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 elements of business operations. It got its name since it is similar to the ingredients checklist 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 clear for company managers and marketers to quickly associate the elements of marketing to the strengths of their own companies, and by doing so could very quickly create a customised and effective marketing system. The four P?s are; Product, Price, Place and Promotion.
When we were preparing the unveiling for our demolition contractor we employed ideas from the marketing mix to devise a strategy.
Product
Whilst every element of the marketing mix is a necessity, the ?product? element mentioned as one of the four P?s is perhaps the most crucial 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 customers are going to spend money with you.
Several people don?t think that marketing has any role to play when it comes to the actual product that your business is selling. In fact, the typical 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 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 in the market already, and because 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 trying to craft a marketing strategy to take on the likes of Microsoft or Apple, it would be far more effective to look at what types of product are sought after in the current marketplace, and how feasible it would be to manufacture and sell them.
Once your goods have been designed 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?. The technique 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 lengthen the lifecycle of a product currently in the market, or to make your new product attractive to as many customers as possible.
The car industry uses this approach very effectively by offering different engines, trim packages and interior options with the cars that they offer. They use the marketing mix to good effect to sell their own products in an incredibly competitive marketplace.
As part of our own promotion strategy, our business thoroughly researched exactly what made our goods stand out from the crowd.
Price
Another key factor in the marketing mix concerns the price of your products or services. This isn?t 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 tool designed to achieve any specific goals your business has.
Whilst 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 customers 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 price. In fact a price that is too low can sometimes turn customers away.
There are many questions that you need to ask yourself while 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 though, pricing can be covered by two primary principals; price skimming and also penetration pricing.
Price Skimming
The main idea driving price skimming is to make as much cash as possible from the sector 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. Not only can this technique yield great economic advantages, but it can also promote an exclusive and high quality image of your item.
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. 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 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 create revenue streams for many years to come. When establishing a price for penetration it is still essential to not give a poor impression of your product by aiming for too low a figure.
Another thing to bear in mind is that ?price? is the only 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 create or carry out.
We were able to use our previous market research regarding demolition companies to launch all online keyword optimisation we were doing.
Place
Place is the component of the marketing mix that?s often overlooked by companies, but it?s still a significant part of selling your product successfully. In short, it describes the method in which you provide your product to your consumer, and consequently how you receive money from them. It can be a great marketing approach when applied appropriately.
The most common ramifications of place-based marketing are the physical locations in which your goods are sold. For the vast majority of consumer products, this includes the distribution network between your production centres and retailers and other outlets around the world. Since distribution of a physical product costs money it is crucial to determine your own priorities and adjust your distribution network accordingly. This is the main application of this part of the marketing mix.
With the growing use of the Internet by your potential 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 a complete distribution channel in download-based markets such as MP3s) companies are now able to reach out to a large pool of possible customers. Effective positioning of your product or service can therefore yield impressive financial results.
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 complete system. Promotion can be employed on a very individual basis or as a mass communication tool, and whilst it may 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 typical 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 customers. 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.
Another significant part of promotion involves branding, which will not necessarily yield more sales directly, but relates back to one of the initial functions of marketing; getting customers to choose your product over those of your rivals. When all other pieces of the marketing mix are equal it could be branding that swings a customer?s decision.
Putting it into Practice
As previously mentioned every business is unique and will have different marketing needs. By using a mixture of the four P?s reviewed above you can take an effective view of your own marketing strategy.
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Posted in Repository by Tom Cherryman
Source: http://articles.chrometablelamp.net/business-marketing/
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