The Four P’s
Nearly every business on the planet sets out with the main 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.
First of all, it is a very rare case that a company can offer a product or service that is genuinely unique and cannot be supplied 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 businesses 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 deal of internal and external variables, but when done well it can be the one business practice that can make or break a company. Any time spent on marketing will reap rewards, although spending this time efficiently can yield extraordinary results.
So where should you start when constructing a marketing strategy for your own company? Well, each situation is different, and each industry will have its own set of advantages and weak points that must be taken into consideration, but there is a marketing principle that can be applied to almost any company 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 system. It reflects the fact that marketing is not a straightforward, blunt-edged business technique, but rather a subtle balance of different aspects of business functions.
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 clear for company managers and marketers to swiftly 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 system. The four P’s are Product, Price, Place and Promotion.
While we were planning the launch for our company products we used concepts in the marketing mix to devise a strategy.
Product
Although every element of the marketing mix is a necessity, the “product” element mentioned as one of the four P’s is possibly the most critical of all. It identifies the physical product or intangible service that your business 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 organisation will find it hard to make it through.
Several people do not think that marketing has any role 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 precise opposite sentiment. Surely it should be the opposite way around – your manufacturing department creates an item for sale and then it is the task of the marketing department to find 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 products on the market already, and because the market is fairly well saturated it would be very 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 far more effective to look at what types of product are sought after in the current marketplace, and how feasible it would be to produce and sell them.
Once your goods have been fashioned and created it is still a critical skill to be able to objectively evaluate your own products to recognise the reasons that a customer would buy your product rather than a competitors’. The technique is called product differentiation and is 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 called product variation and is typically used to either extend the lifecycle of a product currently in the market, or to make your new product attractive to as many customers as possible.
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 incredibly competitive marketplace. Whilst these companies may have substantial marketing budgets, the same principles can be applied to all companies.
An example of one of the most recent forms of promotional marketing is the new horse games for girls website that offers flexible and accessible means to target potential consumers.
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 highest price that your customers would spend (although that can be a useful tool to use), but rather making use of the price of your products as a strategic tool designed to achieve any specific targets your business has.
Although it may seem obvious, it is still worth pointing out that price has always been, and probably always will be, one of the crucial factors that shoppers take into account when they are making a purchase. It is also worth noting that customers do not always consider the lowest price to be the best value.
There are many questions that you need to ask yourself while devising a good pricing plan, key amongst which are the price sensitivity of your clients, what your competitors 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 also penetration pricing.
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 prepared to spend a premium amount of money to receive a product or service early on. Not only can this technique yield excellent economic advantages, but it can also advertise an exclusive and high quality image of your item.
This pricing strategy is very often used in the consumer electronics market where customers will often eagerly await the launch 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. By making use of 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 other 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 earned long into the future. It can be a high risk strategy, but when used correctly it can setup 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. So it is even more essential to get your pricing strategy right.
SEO companies are more common nowadays and our company used one in order to make Spanish DVD for children a notable key phrase on our web site so we can attract more shoppers.
Place
Place is the component of the marketing mix that is often overlooked by companies, but it’s still an important part of selling your product effectively. In a nutshell, it describes the way 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 venues in which your products are sold. For the vast majority of consumer products, this includes the distribution network between your manufacturing plants and retailers and other outlets around the country. Since distribution of a physical product costs money it is crucial to determine your own priorities and alter your distribution network appropriately.
With the increasing use of the Internet by your potential customers, marketing strategies have had to take into account how they use the Internet to help deliver their products. By using the Internet as a point 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.
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 merely one branch of a more complete system. Promotion can be used on a very individual basis or as a mass communication instrument, 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 boost sales.
Advertising is one of the most typical 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 buyers. With the coming of the information age we have seen a great increase in promotion via e-mail and the Internet, or just as targeted advertising materials posted through your front 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 choose your product over those of your competitors.
Putting it into Practice
As previously mentioned every company is unique and will have different marketing needs. By using a mixture of the four P’s discussed above you can take an effective view of your own marketing plan.