The Four P’s
Practically every business 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 customers money for it.
Firstly, it is a very rare case where a business can offer a product or service that is genuinely unique and cannot be provided by anybody else. This means that your enterprise will be competing 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.
Marketing is the primary tool used by modern firms to draw potential customers to do business with them and not with their rivals. 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 one business practise that could make or break a corporation.
So where should you start when constructing a marketing strategy for your own business? Well, each situation is different, and each business will have its own set of strengths and weak points that must be taken into consideration, but there is a marketing rule that can be applied to almost any corporation to be used as a marketing framework.
The Marketing Mix
The marketing mix was a phrase that was first coined in the 1950′s and is an expression that is used to describe the fundamental building blocks of any marketing system. It demonstrates 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 clear 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 quickly form a personalised and efficient marketing strategy. The four P’s are Product, Price, Place and Promotion.
Our company created a marketing strategy for our own industrial floor maintenance range by applying this marketing and advertising mix to determine our marketing strengths.
Product
Whilst every aspect 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 customers are going to spend money with you. If this element is not adequately managed then your company will find it hard to make it through.
Several 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 precise opposite sentiment. Surely it should be the opposite 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 solutions on the market already, and since 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 rival the likes of Microsoft and Apple, it would be more effective to look at what sorts of product are desired in the current marketplace, and how feasible it would be to manufacture 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 identify the reasons that a customer would 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 prolong the lifecycle of a product already in the market, or to make your new product attractive to as many customers as possible.
The car 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 great effect to sell their own goods in an extremely competitive marketplace.
To maintain a standard corporate image a business should update their own portal an example would be stockings and heels which echo colours, fonts and also images associated with their branding.
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 determine the highest 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 objectives your company has.
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 customers take into account when they are making a purchase. It is also worth noting that customers don’t constantly consider the cheapest price to be the best value. Actually a price that is too low can sometimes turn customers away.
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 boost 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 behind price skimming is to make as much cash as possible from the segment of the market which is price-insensitive and will be willing to spend a premium amount of money to get a product or service early on. Not only can this approach deliver great economic benefits, 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 release of a new mobile phone or computer games console. Makers could set almost 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 opposite 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 earned long into the future. It can be a risky strategy, but when used correctly it can create 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 undertake.
Our company has tweaked its business web site so DVDs for children appears more frequently and more people can locate us via search engines.
Place
Place is the portion of the marketing mix that’s often disregarded by companies, but it is still a significant part of selling your product successfully. In short, it describes the method in which you provide your product to your consumer, and consequently how you collect money from them. It can be a great marketing approach when applied correctly.
The most common 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 network between your production plants and shops or other outlets around the country. Since distribution of a physical product costs money it is crucial to determine your own priorities and modify your distribution network accordingly. This is the primary 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 an entire distribution route in download-based markets such as MP3s) firms are now able to reach out to a huge pool of potential customers. Effective placing of your product or service can therefore deliver impressive economic results.
Promotion
When you mention the word “marketing”, most people immediately 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 employed on a very individual basis or as a mass communication instrument, and whilst it may be an expensive undertaking it is often an essential one. The key concern of promotion is to deliver a certain message that will boost sales.
Advertising is one of the most common forms of promotion. Classically it would be done by posting on billboards, creating short clips for TV and radio or by physically handing out flyers or leaflets to potential customers. With the coming 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. The potential for individualised advertising has never been so good.
Another important part of promotion involves branding, which will not necessarily yield more product sales directly, but relates back to one of the preliminary purposes of marketing; getting customers to pick your product over those of your competitors. When all other pieces of the marketing mix are equal it can be branding that sways a customer’s choice.
Putting it into Practise
As previously mentioned every business is different and will have different marketing requirements. By using a mixture of the four P’s discussed above you can take a good view of your own marketing plan.
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