The Banter Board

Almost every business on the planet sets out with the main objective of earning money. This is usually done by producing 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 anybody else. This means that your company will be contesting with other businesses that sell a similar item and you will both be trying to make money from the same customers, who only want to spend their money once.

Marketing is the primary tool used by modern firms to draw potential customers to do business with them and not with their competitors. It is a very broad topic that is influenced by a great deal of internal and external factors, but when done right it can be the one business practise that can make or break a corporation. Any time spent on marketing will reap benefits, although spending this time correctly can yield incredible results.

So where should you start when constructing a marketing strategy for your own business? Well, each situation is different, and every industry will have its own set of strengths and weaknesses 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.

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 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 operations. It got its name since it is similar to the ingredients list for a recipe.

The term was later built upon to include the concept of “four P’s” that described the critical elements of the marketing mix. The formalisation of these P’s made it very easy for business managers and marketers to swiftly relate the elements of marketing to the strengths of their own organisations, and by doing so could very quickly create a personalised and effective marketing system.

This marketing model is not limited to tangible items, other services such as chiropractors Ruddington could gain via fresh marketing ideas or a new point of view.

Product

Although 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 describes the physical product or intangible service that your business will be offering, 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 adequately managed then your organisation will find it hard to survive.

Many people do not think that marketing has any role 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 exact opposite sentiment. Surely it should be the opposite way around – your production department creates a product for sale and then it is the task 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 products on the market 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 take on the likes of Microsoft or Apple, it would be far more effective to look at what sorts of product are desired in the current marketplace, and how viable it would be to manufacture and sell them. By being mindful of the marketing mix early on in your product development period you can avoid business dead-ends at a later time.

Once your goods have been designed and created it is still a critical skill to be able to objectively evaluate 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 forms one of the basic skills of the product part of the marketing mix pie.

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 brand new product attractive to as many customers as possible. 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 good effect to sell their own goods in an incredibly competitive marketplace.

“Product is paramount” is one of the main mottos applied within our chees graters organisation which tries to remind all employees that we expect high quality production.

Price

Another important factor in the marketing mix concerns 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 spend (although that can be a handy tool to use), but rather making use of the price of your products as a strategic tool designed to achieve any specific objectives your company has. The potential advantages of an effective pricing strategy 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 key factors that shoppers 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. 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 maximise your own profits. From a strategy point of view however, pricing can be covered by two primary principals; price skimming and penetration pricing. These are outlined below.

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 receive a product or service early on.

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 other 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 made long into the future. It can be a high risk strategy, but when used correctly it can setup revenue streams for many years to come.

Yet another thing to keep in mind is that “price” is the one part of the marketing mix that will generate income for a business. The other members of the four P’s will all cost money to produce or carry out.

We were able to make use of our past market analysis about lamb cooking to launch the on-line key word optimisation we were undertaking.

Place

Place is the part of the marketing mix that’s 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 customer, and consequently how you collect money from them. It can be a great marketing approach when used appropriately.

The most typical 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 infrastructure between your manufacturing centres and retailers 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 accordingly. This is the primary use of this part of the marketing mix.

With the growing use of the Internet by your potential customers, marketing methods have had to consider how they use the Internet to help distribute their products. By using the Internet as a place 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 positioning of your product or service can therefore yield impressive financial results.

Promotion

When you say the word “marketing”, many people instantly think of the promotional side of the marketing mix, although as we have seen, this is only 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 might be a costly undertaking it is often an essential one. The primary 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, producing short clips for TV and radio or by physically handing out 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 just as targeted advertising material posted through your front door.

Another significant part of promotion involves branding, which may 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.

Putting it into Practise

As previously mentioned every business is unique and will have different marketing requirements. By using a mixture of the four P’s discussed above you can take an effective view of your own marketing plan.