Business 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.
First of all, 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 business will be competing with other businesses that sell a similar item and you will both be trying to earn money from the same shoppers, who only want to spend their money once.
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 broad topic that is affected by a great number of internal and external factors, but when done well it can be the single business practise that could make or break a company.
So where should you start when constructing a marketing strategy for your own business? Well, every situation is different, and every industry will have its own set of advantages 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 platform.
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 simple, blunt-edged business technique, but rather a subtle balance of different aspects of business functions. It got its name since it is similar to the ingredients checklist 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 clear 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 customised and efficient marketing plan.
The “product” element of the four P’s could refer to a product, like remove floor adhesive, or any kind of intangible asset being provided for sale by a business.
Product
Although 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 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.
Many people don’t think that marketing has any place to play when it comes to the physical product that your company 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 production department creates an item for sale and then it is the task of the marketing department to discover ways to sell it, right?
Take 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 very tough (and expensive) to “take on the big boys”. So how could the principles of the marketing mix assist in this circumstance?
Rather than creating 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 produce 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 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 should buy your product rather than a competitors’. The skill is called product differentiation and forms one of the fundamental skills of the product part of the marketing mix cake.
A different form of this part of the marketing mix is called product variation and is typically 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. Again, this technique 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 goods in an incredibly competitive marketplace.
An example of one of the newest forms of promotional marketing is our own Maytag side by side refrigerators website which offers flexible and accessible means to target potential customers.
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 using the price of your products as a strategic weapon designed to achieve any specific targets your company has. The potential benefits of an effective pricing strategy are surprisingly large!
Whilst it may seem obvious, it’s 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 lowest price to be the best price. In fact a price that is too low can sometimes turn customers 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 customers, what your competitors 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.
Price skimming
The principal idea behind 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 willing to spend a large amount of money to get a product or service early on.
This pricing technique is very often used in the consumer electronics industry where customers will often eagerly await the launch 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 base 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 rewards 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. When establishing a price for penetration it is still essential to not give a poor impression of your product by aiming for too low a number.
Another thing to keep in mind is that “price” is the only 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 create or undertake.
Before our corporation began studying online marketing relating to plumbing apprenticeships there didn’t seem to be an clear choice of key phrase to use as our primary target.
Place
Place is the part of the marketing mix that is often not addressed 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 receive money from them.
The most common 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 shops and 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 appropriately.
With the growing 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 route in download-based markets such as MP3s) firms are now able to reach out to a large pool of possible customers.
Promotion
When you say the word “marketing”, most people immediately think of the promotional aspect 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 tool, and whilst it might be a costly undertaking it is often an essential one.
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 arrival of the information age we have seen 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 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 choose your product over those of your rivals. When all other parts of the marketing mix are equal it could be branding that sways a customer’s choice.
Putting it into Practise
As previously mentioned every company is different and will have different marketing needs. 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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