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Business Strategy: Marketing
Nearly every company on the planet sets out with the primary objective of earning 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 specific 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 contesting with other businesses that sell a similar item 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 main tool used by modern businesses to draw prospective 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 single business practise that can make or break a corporation. Any time spent on marketing will reap rewards, although spending this time correctly can yield incredible results.
So where should you begin when creating a marketing strategy for your own company? Well, every situation is different, and every industry will have its own set of advantages and weaknesses 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 platform.
The Marketing Mix
The marketing mix was a phrase that was first coined during the 1950’s and is a phrase that is used to describe the fundamental building blocks of any marketing strategy. It demonstrates the fact that marketing is not a straightforward, blunt-edged business tool, but rather a delicate balance of different elements of business operations.
The term was later built upon to include the concept 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 quickly relate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly create a personalised and efficient marketing system.
Our organisation created a marketing strategy for our own stained concrete floor range by using the marketing mix to identify our marketing advantages.
Product
Although every aspect of the marketing mix is a requirement, 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 business will be selling, and at the end of the day it is the reason that customers are going to spend money with you.
Several people don’t think that marketing has any place to play when it comes to the physical product that your business is selling. In fact, the typical 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 job of the marketing department to discover ways to sell it, right? This is not necessarily the case.
Consider the computer software market as an example. There are many well-known brands of both operating system as well as software application products on the marketplace already, and because the market is relatively well saturated it would be very tough (and expensive) to “take on the big boys”.
Rather than developing an operating system and then attempting to craft a marketing strategy to rival 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 produce and sell them.
Once your products have been designed and created it is still a critical skill to be able to objectively review your own products to identify the reasons that 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 currently in the market, or to make your brand new product attractive to as many customers as possible. Once again, this technique 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 good effect to sell their own goods in an incredibly competitive marketplace.
Marketing plays a critical function within our cheese graters company plan and should not be treated as an afterthought.
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 figure out 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 weapon designed to achieve any particular objectives your company has. The potential advantages of an effective pricing plan are surprisingly large!
Whilst it may seem obvious, it is 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 do not always consider the cheapest price to be the best value. In fact 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 plan, key amongst which are the price sensitivity of your customers, what your rivals are doing and how can pricing boost your own profits. From a strategy point of view however, pricing can be covered by two primary principals; price skimming and also penetration pricing.
Price skimming
The main idea behind price skimming is to make as much money as possible from the sector of the market which is price-insensitive and will be willing to spend a large amount of money to get a product or service early on. Not only can this technique yield great economic advantages, but it can also promote an exclusive and high quality image of your product.
This pricing technique is frequently 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 base of customers that would pay it. By using this method as part of a pre-ordering strategy, a firm 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 monetary 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.
Another thing to bear in mind is that “price” is the one part of the marketing mix that will generate revenue 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.
After using on-line tools to compare keyword lookup frequency we identified helium balloons wholesale to direct the strategy for on-line promotion as well as off-line advertising materials.
Place
Place is the portion of the marketing mix that’s often overlooked by companies, but it is still an important part of selling your product effectively. In a nutshell, it describes the way in which you deliver your product to your customer, and subsequently how you collect money from them. It can be a great marketing approach when applied appropriately.
The most common implications of place-based marketing are the physical venues in which your products are sold. For the majority of consumer products, this involves the distribution infrastructure between your production plants and shops or other outlets around the country. Since distribution of a physical product costs money it is important to identify your own priorities and adjust your distribution network appropriately. This is the principal application of this element of the marketing mix.
With the growing use of the Internet by your prospective customers, marketing strategies have had to consider how they use the Internet to help deliver their products. By using the Internet as a place of contact (or even as a complete distribution route in download-based markets such as MP3s) firms are now able to reach out to a huge pool of possible customers.
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 merely one branch of a more comprehensive system. Promotion can be used on a very individual basis or as a mass communication instrument, and whilst it can be an expensive undertaking it is often an important one.
Advertising is one of the most typical 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 buyers. With the arrival 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 front door. The potential for individualised advertising has never been so good.
Another important part of promotion involves branding, which will not necessarily yield more sales directly, but relates back to one of the initial purposes of marketing; getting customers to choose your product over those of your competitors.
Putting it into Practise
As previously mentioned each business is unique and will have different marketing needs. By using a mixture of the four P’s reviewed above you can take an effective view of your own marketing plan.