The First Steps Of Marketing
Nearly every business on the planet sets out with the primary objective of making money. This is usually done by producing some form of product, or offering a service, and then charging customers money for it. This fundamental principle is fairly straight-forward, though it contains many specific details.
First of all, it is a very rare case where a company can offer a product or service that is truly unique and cannot be supplied by anybody else. This means that your company 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 money once.
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 influenced by a great deal of internal and external variables, but when done well it can be the one 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 every industry will have its own set of strengths and weak points 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 framework.
The Marketing Mix
The marketing mix was a term 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 tool, but rather a delicate balance of different elements of business operations.
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 clear for business managers and marketers to quickly relate the elements of marketing to the strengths of their own companies, and by doing so could very rapidly create a customised and efficient marketing system.
Our company specialises at offeringconference production facilities and while we thought our marketing strategy was adequate we have seen improvements after using marketing mix ideas.
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 critical of all. It identifies 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.
Many people do not think that marketing has any place 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 precise 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 discover 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 as well as software application solutions on the market already, and because the market is fairly 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 and Apple, it would be more effective to look at what types of product are sought after in the current marketplace, and how feasible it would be to produce 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 recognise the reasons why a customer should buy your product rather than a competitors’.
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 already in the market, or to make your new product attractive to as many customers as possible.
The motor industry uses this technique very effectively by offering different engines, trim packages and interior options with the cars that they offer. They use the marketing mix to great effect to sell their own products in an incredibly competitive marketplace. Whilst these companies may have huge marketing budgets, the same concepts can be applied to all businesses.
As part of our individual promotion system, our business very carefully studied what exactly made our products stand out from the crowd.
“Product is paramount” is one of the main slogans applied within our event management business which aims to emphasise to all employees that we expect high quality production.
Price
Another key 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 figure out the highest 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 goals your business has.
Whilst it may seem obvious, it’s still worth noting that price has always been, and likely 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 value. In fact a price that is too low can often turn buyers away.
There are many questions that you need to ask yourself when devising a good pricing plan, key amongst which are the price sensitivity of your clients, 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 penetration pricing.
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 receive a product or service early on. Not only can this approach yield excellent 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 industry 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. By using 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 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 risky strategy, but when employed correctly it can setup revenue streams for many years to come.
Yet another thing to keep 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 undertake.
Grabbing any of the on-line search market is extremely beneficial, so choose a term, just like become a doctor and evaluate if that phrase has an adequate search marketplace for your purposes.
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 a nutshell, it describes the method in which you provide your product to your customer, and consequently how you collect money from them.
The most common implications of place-based marketing are the physical locations in which your goods are sold. For the vast majority of consumer products, this involves the distribution network between your production plants and shops and other outlets around the world. Since distribution of a physical product costs money it is important to identify your own priorities and modify your distribution network appropriately. This is the primary application of this part of the marketing mix.
With the growing use of the Internet by your potential 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 a whole distribution route in download-based markets such as MP3s) firms are now able to reach out to a large pool of possible customers. Effective positioning of your product or service can therefore deliver impressive financial results.
Promotion
When you say 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 used 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 primary concern of promotion is to deliver a particular message that will boost sales.
Advertising is one of the most common 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 customers. With the arrival 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 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 pick 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 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 strategy.
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