Business Marketing
Nearly every company on the planet sets out with the main objective of earning money. This is generally done by producing some form of product, or offering a service, and then charging customers money for it. This fundamental principle is fairly straight-forward, though it contains many specific 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 business 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 money once.
Marketing is the primary tool used by modern businesses to draw prospective 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 single business practice that can make or break a company.
So where should you start when creating a marketing strategy for your own business? Well, every situation is different, and each industry will have its own set of strengths and weaknesses 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. It is known as the “Marketing Mix”.
The Marketing Mix
The marketing mix was a term 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 demonstrates the fact that marketing is not a straightforward, blunt-edged business tool, but rather a delicate balance of different elements 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 idea of “four P’s” that described the critical 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 form a customised and effective marketing system. The four P’s are Product, Price, Place and Promotion.
The “product” element of the four P’s can refer to any product, like turnout seat services, or even any kind of non-physical asset being offered for sale by a company.
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 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 customers are going to spend money with you. If this element is not adequately managed then your company will find it hard to survive.
Several people don’t think that marketing has any role to play when it comes to the actual 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 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 products on the market already, and because the market is fairly well saturated it would be incredibly tough (and expensive) to “take on the big boys”. So how can the principles of the marketing mix help in this circumstance?
Rather than creating an operating system and then attempting to craft a marketing strategy to take on the likes of Microsoft and Apple, it would be far 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. By being aware of the marketing mix early on in your product development period you can prevent business dead-ends at a later time.
Once your products have been designed and created it is still a critical 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’. The technique is called product differentiation and forms one of the fundamental 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 typically 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.
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 good effect to sell their own products in an incredibly competitive marketplace. Although these companies may have substantial marketing budgets, the same principles can be applied to all businesses.
We do not have a distinct marketing department within our how to make bread enterprise although several of our managers have been able to take up marketing as part of their job role.
Price
Another important factor in the marketing mix concerns the price of your products or services. This is not 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 using the price of your products as a strategic tool designed to achieve any specific targets your company has. The potential benefits of an effective pricing strategy are surprisingly substantial!
Although 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 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 strategy, key among which are the price sensitivity of your customers, what your competitors are doing and how can pricing boost your own profits. From a strategy point of view though, pricing can be covered by two main principals; price skimming and also 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 will be prepared to spend a premium amount of money to receive a product or service early on. Not only can this approach yield excellent economic advantages, but it can also advertise an exclusive and high quality image of your item.
This pricing strategy 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 base of customers that would pay it. By using this method as part of a pre-ordering strategy, a firm 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 monetary benefits can be made long into the future. It can be a high risk strategy, but when employed correctly it can create revenue streams for many years to come.
Another thing to keep in mind is that “price” is the only 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 carry out.
To optimize our website for search engine marketing we chose buying sunny plants for a targeted phrase because it relates to our business and what we do.
Place
Place is the component of the marketing mix that is often disregarded by companies, but it is still an important part of selling your product successfully. In a nutshell, it describes the method in which you deliver your product to your consumer, and consequently how you collect money from them.
The most common ramifications of place-based marketing are the physical locations in which your products are sold. For the majority of consumer products, this involves the distribution network between your manufacturing centres and shops and other outlets around the country. Since distribution of a physical product costs money it is important to determine your own priorities and alter your distribution network appropriately. This is the principal application of this part of the marketing mix.
With the increasing use of the Internet by your prospective customers, marketing techniques 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 a whole distribution channel in download-based markets such as MP3s) firms are now able to reach out to a large pool of potential customers. Effective positioning of your product or service can therefore deliver impressive financial results.
Promotion
When you say 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 used on a very individual basis or as a mass communication tool, and whilst it may be an expensive undertaking it is often an important one. The primary concern of promotion is to deliver a specific message that will increase 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 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 significant part of promotion involves branding, which will not necessarily yield more product sales directly, but goes back to one of the initial functions of marketing; getting customers to choose your product over those of your competitors.
Putting it into Practice
As previously mentioned every business is unique and will have different marketing needs. By using a balance of the four P’s reviewed above you can take an effective view of your own marketing plan.
