Product, Price, Place & Promotion
Nearly every business on the planet sets out with the main objective of making money. This is usually done by manufacturing some form of product, or offering a service, and then charging people money for it.
Firstly, it is a very rare case that a company can offer a product or service that is truly unique and cannot be supplied by anybody else. This means that your business will be competing 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 boost the chances of them spending money with you?
Marketing is the main tool used by modern organisations to draw potential 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 factors, but when done well it can be the single business practice that could make or break a company.
So where should you start when constructing a marketing strategy for your own business? Well, every situation is different, and each business 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 framework. It is known as the “Marketing Mix”.
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 express the fundamental building blocks of any marketing system. It demonstrates the fact that marketing is not a straightforward, blunt-edged business technique, but rather a delicate balance of different aspects of business functions. It got its name since it is similar to the ingredients checklist for a recipe.
The term was later developed 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 easy for business managers and marketers to quickly relate the elements of marketing to the strengths of their own organisations, and by doing so could very quickly create a customised and effective marketing system. The four P’s are Product, Price, Place and Promotion.
Our organisation excels in providing car wheelchair hoists products and whilst we thought our marketing plan was adequate we have seen advancements since using marketing mix concepts.
Product
Whilst every aspect 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 describes the physical product or intangible service that your company will be selling, 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 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 other 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?
Take the computer software market as an example. There are many well-known brands of both operating system and software application products 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 can the principles of the marketing mix assist in this situation?
Rather than developing an operating system and then trying 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 produce and sell them. By being aware of the marketing mix early on in your product development cycle you can avoid business dead-ends at a later time.
Once your products have been fashioned 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 skill is called product differentiation and is one of the basic skills of the product part of the marketing mix pie.
Another form of this part of the marketing mix is called product variation and is typically used to either prolong the lifecycle of a product already in the market, or to make your brand 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 great effect to sell their own goods in an extremely competitive marketplace.
We do not have a defined promotion department within our new black wrap around sunglasses service though many of our own administrators have been able to take up marketing as part of their job function.
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 figure out the top price that your customers would spend (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 objectives your company has. The potential advantages of an effective pricing plan are surprisingly large!
Although it may seem obvious, it’s still worth pointing out 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. Actually a price that is too low can often 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 customers, 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.
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 are going to be willing to spend a large amount of money to receive a product or service early on.
This pricing technique is very often used in the consumer electronics industry where customers will often eagerly await the launch 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 financial benefits can be earned long into the future. It can be a risky 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 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 create or undertake. So it is even more essential to get your pricing technique right.
Grabbing some of the on-line search market is extremely beneficial, so pick a key phrase, like become a doctor then assess if the phrase has an adequate search marketplace for your purposes.
Place
Place is the component of the marketing mix that’s often overlooked by companies, but it’s still an important part of selling your product effectively. In short, it describes the way in which you provide your product to your consumer, and subsequently how you collect money from them. It can be a great marketing technique when applied correctly.
The most common implications 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 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 adapt your distribution network accordingly. This is the principal use 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 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) firms are now able to reach out to a huge pool of possible customers. Effective positioning of your product or service can therefore yield impressive economic results.
Promotion
When you say the word “marketing”, most people immediately think of the promotional aspect of the marketing mix, although as we have seen, this is merely one branch of a more comprehensive system. Promotion can be employed on a very individual basis or as a mass communication instrument, and whilst it might be a costly undertaking it is often an important one. The key concern of promotion is to deliver a specific message that will boost sales.
Advertising is one of the most common 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 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 significant part of promotion involves branding, which will not necessarily yield more product sales directly, but relates back to one of the initial purposes of marketing; getting customers to choose your product over those of your rivals. When all other pieces of the marketing mix are equal it can be branding that swings a customer’s choice.
Putting it into Practice
As previously mentioned each business 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.
