30 May 10 A Guide To Marketing

Almost every company on the planet sets out with the primary objective of earning money. This is usually done by manufacturing some form of product, or offering a service, and then charging people money for it.

Firstly, 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 business will be contesting 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. So how can you improve the chances of them spending money with you?

Marketing is the primary tool used by modern firms to draw prospective customers to do business with them and not with their competitors. It is a very extensive topic that is influenced by a great deal of internal and external factors, but when done right it can be the single business practice that can make or break a company.

So where should you start when constructing a marketing strategy for your own company? Well, every situation is different, and every business will have its own set of strengths and weak points that must be taken into consideration, but there is a marketing principle that can be applied to almost any company 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 in the 1950′s and is a phrase that is used to describe the fundamental building blocks of any marketing system. It demonstrates the fact that marketing is not a straightforward, blunt-edged business tool, but rather a delicate balance of different elements of business functions.

The term was later developed 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 swiftly 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. The four P’s are; Product, Price, Place and Promotion.

Our company has risen to be a forerunner for balloon party printing after employing customised marketing concepts across our entire range of offerings.

Product

Whilst every element of the marketing mix is a requirement, the “product” element mentioned as one of the four P’s is perhaps the most critical of all. It describes the physical product or intangible service that your company will be selling, and at the end of the day it is the reason that buyers are going to spend money with you. If this part is not adequately managed then your organisation will find it hard to make it through.

Several people don’t think that marketing has any role 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 exact opposite sentiment. Surely it should be the other way around – your manufacturing department creates an item for sale and then it is the job of the marketing department to discover ways to sell it, right? This is not always the case.

Consider the computer software market as an example. There are many well-known brands of both operating system and software application products 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 creating 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 sorts of product are sought after in the current marketplace, and how viable it would be to produce and sell them.

Once your goods have been designed and created it is still a critical skill to be able to objectively review your own products to recognise the reasons why a customer would buy your product rather than a competitors’.

Another form of this part of the marketing mix is known as product variation and is typically used to either prolong the lifecycle of a product currently in the market, or to make your new product attractive to as many consumers as possible. Once again, this method can be applied at all stages of product development.

The motor 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 products in an extremely competitive marketplace. Whilst these companies may have substantial marketing budgets, the same concepts can be applied to all companies.

Marketing plays a critical role within any advertising flags strategy and it shouldn’t be treated like an afterthought.

Price

Another important factor in the marketing mix relates to the price of your products or services. This isn’t a simple case of performing market research to figure out the top price that your customers would pay (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 objectives your company has.

Although it may seem obvious, it’s still worth pointing out that price has always been, and likely always will be, one of the crucial factors that customers take into account when they are making a purchase. It is also worth noting that customers do not constantly consider the cheapest price to be the best value.
There are many questions that you need to ask yourself while devising a good pricing plan, key among which are the price sensitivity of your customers, what your rivals are doing and how can pricing maximise your own profits. From a strategy point of view however, pricing can be covered by two main principals; price skimming and also 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 are going to be prepared to spend a premium amount of money to get a product or service early on. Not only can this approach deliver excellent economic benefits, but it can also advertise an exclusive and high quality image of your product.

This pricing strategy is frequently used in the consumer electronics market 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. By making use of this method as part of a pre-ordering strategy, a firm can help to smooth its own cash 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 rewards 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.

Yet 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 produce or undertake. So it is even more vital to get your pricing strategy right.

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Place

Place is the part of the marketing mix that is often not addressed by companies, but it’s still a significant part of selling your product effectively. In a nutshell, it describes the way in which you provide your product to your consumer, and subsequently how you collect money from them. It can be a great marketing approach when applied appropriately.

The most typical 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 network 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 alter your distribution network accordingly. This is the main application of this element of the marketing mix.

With the increasing use of the Internet by your potential 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 an entire distribution channel in download-based markets such as MP3s) firms are now able to reach out to a large pool of potential customers.

Promotion

When you mention the word “marketing”, most people instantly think of the promotional side of the marketing mix, although as we have seen, this is merely one branch of a more complete system. Promotion can be used 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 common forms of promotion. Typically it would be done by posting on billboards, producing 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 simply as targeted advertising materials posted through your front door. The potential for individualised advertising has never been so great.

Another significant part of promotion involves branding, which may not necessarily yield more sales directly, but relates back to one of the preliminary purposes of marketing; getting customers to pick your product over those of your competitors.

Putting it into Practice

As previously mentioned every company is unique and will have different marketing requirements. By using a balance of the four P’s reviewed above you can take an effective view of your own marketing strategy.