Business Marketing
Nearly 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. This fundamental theory is fairly straight-forward, though it contains many intricate details.
First of all, it is a very rare case that a company can offer a product or service that is genuinely unique and cannot be supplied by anyone else. This means that your enterprise 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 money once. So how can you improve the chances of them spending money with you?
Marketing is the primary tool used by modern organisations to draw potential customers to do business with them and not with their rivals. It is a very broad topic that is affected by a great deal of internal and external factors, but when done right it can be the one business practise that can make or break a corporation. Any time spent on marketing will reap rewards, although spending this time efficiently can yield extraordinary outcomes.
So where should you begin when constructing a marketing strategy for your own company? Well, every situation is different, and every industry 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 corporation to be used as a marketing platform. It is known as the “Marketing Mix”.
The Marketing Mix
The marketing mix was a term that was first coined in the 1950’s and is an expression that is used to describe the fundamental building blocks of any marketing strategy. It reflects the fact that marketing is not a simple, blunt-edged business tool, but rather a subtle balance of different elements of business operations. It got its name because 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 company managers and marketers to swiftly associate the elements of marketing to the strengths of their own organisations, and by doing so could very quickly form a customised and effective marketing system. The four P’s are Product, Price, Place and Promotion.
Our company created a marketing strategy for our industrial floor maintenance services by applying the advertising and marketing mix to determine our marketing advantages.
Product
Whilst every aspect 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 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 buyers are going to spend money with you. If this part is not adequately managed then your company will find it hard to survive.
Many people do not think that marketing has any role to play when it comes to the physical 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 other way around - your manufacturing department creates a product for sale and then it is the job of the marketing department to find ways to sell it, right? This is not necessarily the case.
Take the computer software market as an example. There are many well-known brands of both operating system and software application solutions on the marketplace already, and since 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 more effective to look at what sorts of product are sought after in the current marketplace, and how feasible it would be to produce and sell them. By being mindful of the marketing mix early on in your product development cycle 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 review your own products to identify the reasons why a customer would buy your product rather than a competitors’. The skill is called product differentiation and forms one of the basic skills of the product part of the marketing mix pie.
A different form of this part of the marketing mix is known as product variation and is generally used to either prolong the lifecycle of a product already in the market, or to make your brand new product attractive to as many customers as possible. Again, this method 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 offer. They use the marketing mix to great effect to sell their own goods in an extremely competitive marketplace.
With the rise of the Internet and ecommerce companies see that their sites such as business electricity prices might be used as a direct sales channel and distribution network.
Price
Another important factor in the marketing mix concerns the price of your products or services. This isn’t a simple case of carrying out market research to determine the top price that your customers would spend (although that can be a handy tool to use), but rather making use of the price of your products as a strategic tool designed to achieve any specific goals your company has.
Whilst it may seem obvious, it is still worth noting 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 constantly 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 when devising a good pricing strategy, key among which are the price sensitivity of your clients, what your competitors are doing and how can pricing maximise your own profits. From a strategy point of view though, pricing can be covered by two main principals; price skimming and 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 are going to be willing to spend a large amount of money to get a product or service early on. Not only can this technique deliver excellent financial advantages, but it can also promote an exclusive and high quality image of your product.
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. Manufacturers 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 opposite end of the pricing spectrum, and is tailored towards gaining a large market share at a short-term cost so that financial benefits can be earned long into the future. It can be a high risk strategy, but when employed correctly it can create revenue streams for many years to come.
Yet another thing to bear 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. So it is even more vital to get your pricing technique right.
SEO companies are more common nowadays and our business employed one to make Spanish DVD for children a notable phrase on our web site to attract more customers.
Place
Place is the component of the marketing mix that is often not addressed by companies, but it’s still a significant part of selling your product effectively. In a nutshell, it describes the method in which you deliver your product to your consumer, and subsequently 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 locations in which your products are sold. For the vast majority of consumer products, this involves the distribution network between your production centres and retailers and other outlets around the country. Since distribution of a physical product costs money it is important to determine your own priorities and adapt your distribution network accordingly.
With the increasing 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 place of contact (or even as a complete distribution channel in download-based markets such as MP3s) firms are now able to reach out to a large pool of potential customers.
Promotion
When you say the word “marketing”, many people instantly 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 employed on a very individual basis or as a mass communication tool, and whilst it might be a costly undertaking it is often an important one. The key concern of promotion is to deliver a certain message that will increase 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 distributing flyers or leaflets to potential customers. With the arrival of the information age we have seen a great increase in promotion via e-mail and the Internet, or just as targeted advertising materials posted through your door.
Another important part of promotion involves branding, which will not necessarily yield more product sales directly, but goes back to one of the preliminary purposes of marketing; getting customers to choose your product over those of your competitors. When all other parts of the marketing mix are equal it could be branding that swings a customer’s choice.
Putting it into Practise
As previously mentioned every company is unique and will have different marketing needs. By using a balance of the four P’s reviewed above you can take a good view of your own marketing plan.
