Business Strategy: Marketing

Almost 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 people money for it.

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 provided 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 make money from the same customers, who only want to spend their cash once.

Marketing is the primary tool used by modern organisations to draw prospective customers to do business with them and not with their rivals. It is a very extensive topic that is affected by a great deal of internal and external factors, but when done well it can be the single business practice that can make or break a company. Any time spent on marketing will reap rewards, although spending this time correctly can yield incredible outcomes.

So where should you begin when constructing a marketing strategy for your own business? Well, each situation is different, and each business 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 in the 1950′s and is a phrase 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 subtle balance of different aspects of business functions.

The term was later built upon to include the idea 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 associate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly create a customised and efficient marketing plan. The four P’s are Product, Price, Place and Promotion.

Our organisation has risen to be a leader for Egyptian cotton bedding since employing customised marketing and advertising concepts across our entire range of products.

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 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 buyers are going to spend money with you.

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? This is not always the case.

Consider the computer software market as an example. There are many established brands of both operating system as well as software application solutions on the marketplace already, and since 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 trying to craft a marketing strategy to take on the likes of Microsoft or Apple, it would be far more effective to look at what sorts of product are sought after in the current marketplace, and how viable it would be to manufacture and sell them.

Once your goods have been fashioned and created it is still a vital skill to be able to objectively evaluate your own products to identify the reasons why a customer would buy your product rather than a competitors’.

A different form of this part of the marketing mix is called 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 customers as possible.

The car industry uses this approach 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 extremely competitive marketplace.

With the rise of the Internet and ecommerce businesses see their own sites, for instance lace tablecloths could be utilised as a direct sales channel and distribution network.

 

 

 

 

 

 

Price

Another key factor in the marketing mix relates to the price of your products or services. This is not 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 specific goals your business has. The potential advantages of an effective pricing strategy are surprisingly substantial!

Whilst it may seem obvious, it is still worth pointing out 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 constantly consider the lowest price to be the best value.

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 rivals 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 penetration pricing.

Price skimming

The principal idea driving 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 prepared to spend a premium amount of money to get 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 release 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 geared towards gaining a large market share at a short-term cost so that financial rewards can be earned long into the future. It can be a high risk strategy, but when used correctly it can create revenue streams for many years to come. When setting a price for penetration it is still important to not give a bad impression of your product by aiming for too low a figure.

Another thing to bear 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. So it is even more vital to get your pricing strategy right.

Our company has tweaked its business web site so foil helium balloons appears more regularly and more people can locate us via search engines.

Place

Place is the component of the marketing mix that is often overlooked by companies, but it is still a significant part of selling your product successfully. In a nutshell, it describes the way in which you provide your product to your consumer, and subsequently how you receive money from them. It can be a fantastic marketing approach when used correctly.

The most typical implications of place-based marketing are the physical locations in which your products are sold. For the majority of consumer products, this includes the distribution network between your production centres and shops or other outlets around the world. Since distribution of a physical product costs money it is important to determine your own priorities and adapt your distribution network appropriately.

With the increasing use of the Internet by your prospective customers, marketing techniques 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 a whole distribution channel in download-based markets such as MP3s) companies are now able to reach out to a large pool of possible customers. Effective placing of your product or service can therefore deliver impressive financial results.

Promotion

When you mention the word “marketing”, many people instantly think of the promotional side 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 tool, and whilst it might be an expensive undertaking it is often an essential 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. 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 arrival of the information age we have witnessed a great increase in promotion via e-mail and the Internet, or simply 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 relates back to one of the initial functions of marketing; getting customers to pick your product over those of your rivals.

Putting it into Practice

As previously mentioned each business is unique and will have different marketing needs. By using a mixture of the four P’s discussed above you can take a good view of your own marketing strategy.

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