The Marketing Mix May 25, 2010 at 1:22 pm
Almost every company on the planet sets out with the primary objective of making money. This is generally done by producing some form of product, or offering a service, and then charging people money for it. This fundamental principle is fairly straight-forward, though it contains many intricate details.
First of all, it is a very rare case that a business can offer a product or service that is truly unique and cannot be provided by anyone else. This means that your company will be contesting 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 cash once.
Marketing is the main tool used by modern businesses to draw prospective customers to do business with them and not with their rivals. It is a very extensive topic that is affected 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 corporation. Any time spent on marketing will reap benefits, although spending this time efficiently can yield extraordinary results.
So where should you begin when constructing a marketing strategy for your own business? Well, each situation is different, and every company will have its own set of advantages and flaws 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 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 critical elements of the marketing mix. The formalisation of these P’s made it very easy for company managers and marketers to swiftly relate the elements of marketing to the strengths of their own companies, and by doing so could very quickly create a customised and effective marketing plan.
Almost every sector in the modern market is competitive, especially drama lesson school, in which good marketing decisions could mean the success or failing of the business.
Product
Although every element of the marketing mix is a necessity, 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 buyers are going to spend money with you. If this part is not correctly managed then your company will find it hard to survive.
Several people don’t think that marketing has any place to play when it comes to the actual product that your business 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 production 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 established brands of both operating system and software application products on the marketplace 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 developing 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 sought after in the current marketplace, and how viable it would be to manufacture and sell them. By being aware of the marketing mix early on in your product development cycle you can prevent business dead-ends at a later time.
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 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 known as product variation and is generally 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 car industry uses this approach very effectively by offering various engines, trim packages and interior options with the cars that they sell. They use the marketing mix to good effect to sell their own goods in an extremely competitive marketplace. Whilst these companies may have huge marketing budgets, the same concepts can be applied to all businesses.
An example of one of the most recent forms of promotional advertising is our own electricity prices comparison website that offers versatile and accessible means to reach potential consumers.
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 pay (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. The potential advantages of an effective pricing plan are surprisingly substantial!
Although it may seem obvious, it’s still worth pointing out that price has always been, and likely 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 don’t constantly consider the cheapest price to be the best price. Actually a price that is too low can sometimes turn buyers away.
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 primary principals; price skimming and penetration pricing. These are outlined below.
Price skimming
The main idea driving price skimming is to make as much money 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.
This pricing technique is very often used in the consumer electronics market 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 monetary benefits can be made long into the future. It can be a risky strategy, but when employed correctly it can create revenue streams for many years to come.
Another thing to bear 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 create or carry out. So it is even more essential to get your pricing strategy right.
Our organisation has modified its corporate web page so pork cooking appears more regularly and more people can locate us through search engines.
Place
Place is the part of the marketing mix that’s often not addressed by companies, but it is still a significant part of selling your product effectively. In a nutshell, it describes the way in which you deliver your product to your customer, and subsequently how you collect money from them.
The most typical implications of place-based marketing are the physical venues in which your products are sold. For the majority of consumer products, this involves the distribution infrastructure between your manufacturing plants and retailers or other outlets around the world. Since distribution of a physical product costs money it is crucial to identify your own priorities and adjust your distribution network accordingly. This is the primary use 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 distribute their products. By using the Internet as a point 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 possible customers. Effective positioning of your product or service can therefore deliver impressive economic results.
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 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 can be an expensive undertaking it is often an essential one. The primary concern of promotion is to deliver a certain message that will increase sales.
Advertising is one of the most typical forms of promotion. Classically it would be done by posting on billboards, producing 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 witnessed a great increase in promotion via e-mail and the Internet, or simply as targeted advertising material posted through your door.
Another important part of promotion involves branding, which may not necessarily yield more product sales directly, but goes back to one of the initial functions of marketing; getting customers to pick your product over those of your competitors.
Putting it into Practice
As previously mentioned each company 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.