My Open Book

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 that a company can offer a product or service that is truly unique and cannot be provided by anybody else. This means that your business will be competing with other businesses that sell a similar product and you will both be trying to earn money from the same shoppers, who only want to spend their cash once.

Marketing is the primary tool used by modern organisations to draw prospective customers to do business with them and not with their competitors. It is a very extensive topic that is influenced by a great deal of internal and external variables, but when done well it can be the single business practise that can make or break a company. Any time spent on marketing will reap rewards, although spending this time efficiently can yield incredible outcomes.

So where should you start when constructing a marketing strategy for your own company? Well, every situation is different, and every business 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 corporation 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 an expression that is used to express the fundamental building blocks of any marketing system. It reflects the fact that marketing is not a straightforward, blunt-edged business technique, but rather a subtle balance of different elements of business operations. It got its name because it is similar to the ingredients checklist for a recipe.

The term was later developed 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 quickly create a tailored and efficient marketing strategy.

Almost every segment in the modern market is reasonably competitive, especially carpet glue removal, in which proper promotional choices could mean the success or failure of the company.

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 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 survive.

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 common train of thought very often bears the exact opposite sentiment. Surely it should be the other way around – your manufacturing 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 as well as software application solutions in 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 could 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 rival the likes of Microsoft and Apple, it would be more effective to look at what types of product are desired in the current marketplace, and how feasible it would be to produce and sell them.

Once your products have been fashioned and created it is still a vital skill to be able to objectively evaluate your own products to identify the reasons that a customer would buy your product rather than a competitors’. The skill 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 typically used to either prolong the lifecycle of a product currently in the market, or to make your new product attractive to as many customers as possible. Again, this method can be applied at all stages of product development.

The car industry uses this approach very effectively by offering various engines, trim packages and interior options with the cars that they offer. They use the marketing mix to good effect to sell their own goods in an extremely competitive marketplace.

As part of our individual promotion system, our AdWords for Dummies company thoroughly studied exactly what made our products stand out from the masses.

Price

Another important factor in the marketing mix relates to the price of your products or services. This isn’t a simple case of carrying out market research to determine the highest price that your customers would pay (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 particular targets your business 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 always consider the cheapest price to be the best price. Actually a price that is too low can often turn customers away.

There are many questions that you need to ask yourself while devising a good pricing strategy, 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 driving price skimming is to make as much money as possible from the sector of the market which is price-insensitive and will be prepared to spend a large amount of money to get 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 frequently used in the consumer electronics market where customers will often eagerly await the launch 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.

Penetration pricing

Penetration pricing is at the opposite end of the pricing spectrum, and is geared 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 employed correctly it can create revenue streams for many years to come. When setting a price for penetration it is still critical to not give a poor impression of your product by aiming for too low a figure.

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

Before our company started studying on-line promotion for plumbing apprenticeships there didn’t seem the clear choice of key phrase to use as our main focus.

Place

Place is the component of the marketing mix that’s often disregarded by companies, but it’s still an important part of selling your product effectively. In short, it describes the method in which you provide your product to your customer, and consequently how you receive money from them.

The most common ramifications of place-based marketing are the physical venues in which your products are sold. For the vast majority of consumer products, this includes the distribution infrastructure between your manufacturing centres and shops and other outlets around the world. Since distribution of a physical product costs money it is crucial to determine your own priorities and adapt your distribution network accordingly. This is the primary use of this element of the marketing mix.

With the increasing use of the Internet by your potential customers, marketing strategies 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 route in download-based markets such as MP3s) firms are now able to reach out to a large pool of potential customers. Effective placing of your product or service can therefore yield impressive economic results.

Promotion

When you say the word “marketing”, most people instantly think of the promotional aspect of the marketing mix, although as we have seen, this is only one branch of a more comprehensive 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, producing short clips for TV and radio or by physically distributing 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 simply as targeted advertising materials posted through your door.

Another important part of promotion involves branding, which will not necessarily yield more product sales directly, but relates back to one of the initial functions of marketing; getting customers to pick your product over those of your rivals. When all other pieces of the marketing mix are equal it can be branding that sways a customer’s decision.

Putting it into Practise

As previously mentioned each business is unique and will have different marketing needs. By using a balance of the four P’s discussed above you can take an effective view of your own marketing strategy.

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