The Fundamentals Of Marketing
Practically every business on the planet sets out with the primary objective of making money. This is generally done by producing some form of product, or offering a service, and then charging customers money for it.
Firstly, it is a very rare case that a business can offer a product or service that is truly unique and cannot be provided by anyone else. This means that your company will be contesting with other businesses that sell a similar item and you will both be trying to earn 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 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 variables, but when done well it can be the one business practise that can make or break a corporation.
So where should you begin when creating a marketing strategy for your own company? 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 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 express the fundamental building blocks of any marketing strategy. It reflects the fact that marketing is not a simple, blunt-edged business technique, but rather a subtle 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 built upon to include the idea of “four P’s” that described the critical elements of the marketing mix. The formalisation of these P’s made it very easy for company managers and marketers to quickly relate the elements of marketing to the strengths of their own organisations, and by doing so could very quickly form a personalised and effective marketing plan. The four P’s are Product, Price, Place and Promotion.
This marketing model is not limited to physical goods, services such as floor painting can gain from fresh marketing ideas or a new perspective.
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 identifies the physical product or intangible service that your company will be offering, and at the end of the day it is the reason that customers are going to spend money with you. If this part is not adequately managed then your organisation will find it hard to survive.
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 opposite 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?
Take the computer software market as an example. There are many established brands of both operating system and software application solutions in the marketplace already, and since 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 rival 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 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 technique is called product differentiation and forms one of the fundamental skills of the product part of the marketing mix cake.
A different 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 different 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. Whilst these companies may have substantial marketing budgets, the same concepts can be applied to all companies.
To maintain a standard corporate image a company should update their web presence an example we found was gas electricity price comparison who echo colours, fonts and also graphics associated with their own branding.
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 spend (although that can be a handy tool to use), but rather using the price of your products as a strategic tool designed to achieve any particular targets your business has.
Whilst 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 always consider the cheapest price to be the best price.
There are many questions that you need to ask yourself when devising a good pricing strategy, key amongst which are the price sensitivity of your customers, 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 primary 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 will be willing to spend a premium amount of money to get a product or service early on. Not only can this approach deliver great economic advantages, but it can also advertise an exclusive and high quality image of your item.
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. Manufacturers could set almost any price they wanted to and there would still be a loyal core of customers that would pay it. By making use of this method as part of a pre-ordering strategy, a company can help to smooth its own money flow.
Penetration pricing
Penetration pricing is at the other end of the pricing spectrum, and is geared towards gaining a large market share at a short-term cost so that financial rewards can be made 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 income for a business. The other members of the four P’s will all cost money to produce or undertake.
Our organisation has tweaked its business web page so DVDs for children appears very regularly and more people can find us via search engines.
Place
Place is the part of the marketing mix that is often disregarded by companies, but it is still an important part of selling your product effectively. In a nutshell, it describes the way 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 correctly.
The most common ramifications of place-based marketing are the physical venues in which your products are sold. For the vast majority of consumer products, this involves the distribution infrastructure between your manufacturing plants and shops or other outlets around the world. Since distribution of a physical product costs money it is crucial to determine your own priorities and modify your distribution network accordingly. This is the primary application of this part of the marketing mix.
With the growing use of the Internet by your prospective customers, marketing techniques have had to consider how they use the Internet to help distribute their products. By using the Internet as a point 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 large pool of possible customers.
Promotion
When you mention the word “marketing”, most 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 can be a costly undertaking it is often an essential one. The key concern of promotion is to deliver a certain message that will increase sales.
Advertising is one of the most typical forms of promotion. Typically it would be done by posting on billboards, creating short clips for TV and radio or by physically distributing flyers or leaflets to potential buyers. With the coming of the information age we have seen a great increase in promotion via e-mail and the Internet, or simply 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 functions of marketing; getting customers to choose your product over those of your rivals.
Putting it into Practise
As previously mentioned every business is different and will have different marketing requirements. By using a balance of the four P’s discussed above you can take a good view of your own marketing strategy.
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