The Marketing Mix
Nearly every company on the planet sets out with the main objective of earning money. This is generally done by producing 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 truly unique and cannot be provided by anyone else. This means that your company will be competing with other businesses that sell a similar product and you will both be trying to make money from the same shoppers, who only want to spend their money once. So how can you increase the chances of them spending money with you?
Marketing is the primary tool used by modern businesses 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 number of internal and external variables, but when done well it can be the one business practise that could make or break a corporation.
So where should you start when constructing a marketing strategy for your own company? Well, each situation is different, and each company 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.
The Marketing Mix
The marketing mix was a term that was first coined during 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 simple, blunt-edged business technique, 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 organisations, and by doing so could very rapidly create a tailored and effective marketing system. The four P’s are Product, Price, Place and Promotion.
This marketing style is not limited to physical items, other services like chiropractors Ruddington can profit from new marketing ideas or a new perspective.
Product
Whilst every element of the marketing mix is a necessity, the “product” element mentioned as one of the four P’s is possibly the most critical 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. If this part is not correctly managed then your company will find it hard to survive.
Several people don’t think that marketing has any role to play when it comes to the physical product that your company is selling. In fact, the common train of thought very often bears the precise opposite sentiment. Surely it should be the opposite way around – your production department creates a product for sale and then it is the job of the marketing department to find ways to sell it, right?
Consider the computer software market as an example. There are many established brands of both operating system and software application solutions on the market already, and since the market is fairly well saturated it would be incredibly tough (and expensive) to “take on the big boys”.
Rather than creating an operating system and then trying to craft a marketing strategy to take on the likes of Microsoft and Apple, it would be far more effective to look at what sorts of product are desired in the current marketplace, and how feasible it would be to manufacture 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 vital skill to be able to objectively review your own products to recognise the reasons that a customer would buy your product rather than a competitors’. The technique is called product differentiation and is one of the fundamental skills of the product part of the marketing mix pie.
Another form of this part of the marketing mix is known as product variation and is typically used to either extend the lifecycle of a product already in the market, or to make your brand new product attractive to as many consumers as possible. Once again, this technique can be applied at all stages of product development.
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 incredibly competitive marketplace. Although these companies may have substantial marketing budgets, the same concepts can be applied to all businesses.
Marketing plays a crucial function in our plastic playhouse reseller plan and shouldn’t get treated like an afterthought.
Price
Another important factor in the marketing mix relates to the price of your products or services. This is not a simple case of performing market research to figure out the highest price that your customers would pay (although that can be a handy tool to use), but rather making use of the price of your products as a strategic weapon designed to achieve any particular objectives your business has. The potential benefits of an effective pricing plan are surprisingly substantial!
Although it may seem obvious, it’s still worth noting that price has always been, and likely 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 don’t constantly consider the lowest price to be the best value. Actually a price that is too low can often 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 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.
Price skimming
The main idea driving price skimming is to make as much cash as possible from the segment of the market which is price-insensitive and will be prepared to spend a premium amount of money to get a product or service early on. Not only can this approach deliver excellent financial benefits, but it can also promote an exclusive and high quality image of your product.
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 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 geared 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 setup revenue streams for many years to come. When setting a price for penetration it is still essential to not give a bad impression of your product by aiming for too low a figure.
Yet another thing to keep 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 vital to get your pricing technique right.
When our organisation was doing market research before a new product launch I discovered get a boyfriend was the key word that promoted the best “value for money” impression.
Place
Place is the portion of the marketing mix that is often disregarded 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 consequently how you collect money from them. It can be a fantastic marketing technique 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 includes the distribution network between your production plants and retailers 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.
With the growing use of the Internet by your potential customers, marketing techniques have had to consider how they use the Internet to help deliver their products. By using the Internet as a point 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 huge pool of potential customers. Effective placing of your product or service can therefore yield impressive economic results.
Promotion
When you mention the word “marketing”, many people immediately think of the promotional aspect 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 instrument, and whilst it can be a costly undertaking it is often an essential one.
Advertising is one of the most typical forms of promotion. Classically 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 seen a great increase in promotion via e-mail and the Internet, or just as targeted advertising materials posted through your door. The potential for individualised advertising has never been so great.
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 rivals.
Putting it into Practise
As previously mentioned every company is unique and will have different marketing requirements. By using a balance of the four P’s discussed above you can take an effective view of your own marketing strategy.
Related posts: