Modern Marketing

Practically every business on the planet sets out with the main 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 specific details.

Firstly, it is a very rare case that a business can offer a product or service that is genuinely unique and cannot be supplied by anyone else. This means that your enterprise will be competing with other businesses that sell a similar item and you will both be trying to earn money from the same customers, who only want to spend their cash once.

Marketing is the primary tool used by modern businesses to draw potential customers to do business with them and not with their rivals. 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 could make or break a company. Any time spent on marketing will reap rewards, although spending this time efficiently can yield extraordinary outcomes.

So where should you start when constructing a marketing strategy for your own company? Well, each situation is different, and each company will have its own set of strengths 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 during the 1950’s and is an expression that is used to describe 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 delicate 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 quickly relate the elements of marketing to the strengths of their own companies, and by doing so could very rapidly form a personalised and effective marketing system. The four P’s are Product, Price, Place and Promotion.

Marketing is a global business idea which could be applied to conferences or almost any amount of different products and services.

Product

Although every element 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 business will be selling, and at the end of the day it is the reason that buyers are going to spend money with you.

Several people do not 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 a product for sale and then it is the task of the marketing department to find ways to sell it, right? This is not necessarily the case.

Consider the computer software market as an example. There are many established brands of both operating system as well as software application solutions on the market already, and because the market is relatively well saturated it would be very tough (and expensive) to “take on the big boys”.

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 sorts of product are desired in the current marketplace, and how viable it would be to manufacture and sell them. By being mindful of the marketing mix early on in your product development period you can prevent business dead-ends at a later stage.

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 skill is called product differentiation and forms one of the basic skills of the product part of the marketing mix cake.

Another form of this part of the marketing mix is called product variation and is generally used to either prolong 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 technique very effectively by offering various 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 extremely competitive marketplace. Although these companies may have substantial marketing budgets, the same principles can be applied to all businesses.

As part of our own marketing strategy, our business thoroughly researched exactly what made our goods stand out from the masses.

“Product is paramount” is one of the mottos used within our event management business which tries to point out to all employees that we expect top quality production.

Price

Another key factor in the marketing mix concerns the price of your products or services. This is not a simple case of carrying out market research to determine the highest price that your customers would spend (although that can be a handy tool to use), but rather making use of the price of your products as a strategic tool designed to achieve any particular 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 key factors that customers 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 value. In fact a price that is too low can often turn buyers away.

There are many questions that you need to ask yourself while devising a good pricing plan, key among 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 though, pricing can be covered by two primary principals; price skimming and penetration pricing. These are outlined below.

Price skimming

The principal idea behind price skimming is to make as much money as possible from the sector of the market which is price-insensitive and will be willing to spend a premium amount of money to receive a product or service early on. Not only can this technique deliver great financial benefits, but it can also promote 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 release 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 base 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 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 setting a price for penetration it is still critical to not give a bad impression of your product by aiming for too low a number.

Yet another thing to keep in mind is that “price” is the only 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 carry out.

Our business wanted to appeal to a broader market and targeting integrated washing machine helped increase our profile within the international business network.

Place

Place is the portion of the marketing mix that’s often disregarded by companies, but it is still a significant part of selling your product successfully. In short, it describes the way in which you deliver your product to your consumer, and subsequently how you receive money from them.

The most typical implications of place-based marketing are the physical venues in which your goods are sold. For the vast majority of consumer products, this includes the distribution network between your production centres and retailers or other outlets around the world. Since distribution of a physical product costs money it is crucial to determine your own priorities and adjust your distribution network accordingly.

With the growing use of the Internet by your potential customers, marketing methods 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 a complete distribution channel in download-based markets such as MP3s) companies are now able to reach out to a huge pool of potential customers.

Promotion

When you mention the word “marketing”, many people instantly think of the promotional side of the marketing mix, although as we have seen, this is merely one branch of a more complete system. Promotion can be employed 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. The primary concern of promotion is to deliver a particular message that will improve sales.

Advertising is one of the most typical forms of promotion. Typically it would be done by posting on billboards, creating short clips for TV and radio or by physically distributing flyers or leaflets to potential buyers. With the coming of the information age we have witnessed a great increase in promotion via e-mail and the Internet, or just as targeted advertising material posted through your front door.

Another important part of promotion involves branding, which will not necessarily yield more sales directly, but goes back to one of the preliminary functions of marketing; getting customers to choose your product over those of your competitors.

Putting it into Practice

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