Business Strategy: Marketing

Practically every business on the planet sets out with the main objective of earning money. This is generally done by manufacturing some form of product, or offering a service, and then charging people money for it. This fundamental theory is fairly straight-forward, although it contains many intricate details.

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 earn money from the same customers, who only want to spend their cash once. So how can you increase the chances of them spending money with you?

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 right it can be the one business practice that can make or break a company.

So where should you begin when constructing a marketing strategy for your own company? Well, every 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. It is called the “Marketing Mix”.

The Marketing Mix

The marketing mix was a phrase that was first coined during the 1950’s and is an expression that is used to express the fundamental building blocks of any marketing strategy. It reflects the fact that marketing is not a straightforward, blunt-edged business tool, but rather a subtle balance of different elements of business functions.

The term was later developed 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 clear for company managers and marketers to swiftly associate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly create a customised and effective marketing strategy.

The “product” aspect of the four P’s can pertain to a service, like conference production company, or even any kind of intangible service being provided for sale by a business.

Product

Although every aspect of the marketing mix is a necessity, 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 business will be selling, and at the end of the day it is the reason that buyers are going to spend money with you.

Many people do not think that marketing has any place 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 exact opposite sentiment. Surely it should be the other way around - your manufacturing 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 well-known brands of both operating system and software application products in the marketplace already, and because the market is relatively well saturated it would be incredibly 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 more effective to look at what types of product are sought after in the current marketplace, and how viable it would be to manufacture and sell them. By being aware of the marketing mix early on in your product development cycle you can prevent business dead-ends at a later stage.

Once your products have been fashioned and created it is still a critical skill to be able to objectively review your own products to identify 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.

A different form of this part of the marketing mix is known as 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 consumers as possible. Again, this method can be applied at all stages of product development.

The motor industry uses this approach 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.

As part of our own marketing plan, our business very carefully studied exactly what made our products stand out from the crowd.

To maintain a standard corporate image a business ought to redesign their website to echo colors, fonts and graphics associated with their own branding.Our conference production company website is being redesigned at the moment.

Price

Another key 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 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 particular targets your company has.

Although it may seem obvious, it’s still worth pointing out that price has always been, and probably 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 don’t always consider the cheapest price to be the best price.

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 though, pricing can be covered by two main principals; price skimming and also penetration pricing.

Price skimming

The principal idea behind price skimming is to make as much money as possible from the segment of the market which is price-insensitive and will be willing to spend a large amount of money to receive a product or service early on. Not only can this technique deliver excellent financial benefits, but it can also advertise 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 almost any price they wanted to and there would still be a loyal core of customers that would pay it. By using this method as part of a pre-ordering strategy, a company can help to smooth its own money flow.

Penetration pricing

Penetration pricing is at the opposite end of the pricing spectrum, and is tailored towards gaining a large market share at a short-term cost so that financial rewards can be made 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 establishing a price for penetration it is still critical to not give a bad impression of your product by aiming for too low a number.

Yet another thing to bear 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 produce or carry out. So it is even more vital to get your pricing technique right.

To optimise our website for google search visibility we chose rice and peas as an aimed phrase because it relates to our business and what we offer.

Place

Place is the part of the marketing mix that’s often not addressed by companies, but it’s still an important part of selling your product effectively. In a nutshell, it describes the way in which you provide 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 typical ramifications 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 network between your manufacturing plants and retailers or other outlets around the world. Since distribution of a physical product costs money it is important to identify your own priorities and alter your distribution network accordingly.

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 route in download-based markets such as MP3s) firms are now able to reach out to a huge pool of potential customers.

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 used on a very individual basis or as a mass communication tool, and whilst it might be a costly undertaking it is often an essential one. The key concern of promotion is to deliver a certain message that will improve sales.

Advertising is one of the most common forms of promotion. Classically 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 customers. 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 materials 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 initial purposes of marketing; getting customers to choose your product over those of your rivals. When all other parts of the marketing mix are equal it can be branding that swings a customer’s choice.

Putting it into Practice

As previously mentioned every company is unique and will have different marketing needs. By using a balance of the four P’s discussed above you can take a good view of your own marketing plan.