Infinite Wizdom

Nearly every company on the planet sets out with the primary objective of making 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 anyone else. This means that your business will be contesting with other businesses that sell a similar product and you will both be trying to make money from the same shoppers, who only want to spend their money once.

Marketing is the primary tool used by modern firms to draw potential 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 well it can be the one business practice that could make or break a corporation. Any time spent on marketing will reap rewards, although spending this time efficiently can yield extraordinary outcomes.

So where should you begin when constructing a marketing strategy for your own business? Well, each situation is different, and each company will have its own set of advantages and flaws 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 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 an expression that is used to describe the fundamental building blocks of any marketing system. It demonstrates the fact that marketing is not a straightforward, blunt-edged business tool, but rather a delicate balance of different aspects of business operations. 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 company managers and marketers to swiftly relate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly form a customised and efficient marketing plan. The four P’s are Product, Price, Place and Promotion.

Nearly every segment in the modern marketplace is competitive, especially conference production, where good marketing choices could mean the success or failure of the business.

Product

Although every aspect 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 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 correctly managed then your organisation will find it hard to make it through.

Many people do not 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 precise 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 find ways to sell it, right? This is not necessarily the case.

Take the computer software market as an example. There are many established brands of both operating system and software application solutions in the marketplace already, and because the market is relatively 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 situation?

Rather than developing an operating system and then trying to craft a marketing strategy to take on the likes of Microsoft and Apple, it would be far more effective to look at what sorts of product are desired in the current marketplace, and how viable it would be to produce and sell them. By being aware of the marketing mix early on in your product development period you can prevent business dead-ends at a later stage.

Once your goods have been fashioned and created it is still a vital skill to be able to objectively evaluate your own products to recognise the reasons why a customer should 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.

A different form of this part of the marketing mix is known as product variation and is generally used to either lengthen the lifecycle of a product already in the market, or to make your brand 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 technique 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 extremely competitive marketplace. Whilst these companies may have substantial marketing budgets, the same concepts can be applied to all businesses.

As part of our individual promotion system, our business carefully studied what exactly made our products stand out from the masses.

It might seem evident that marketing is incredibly important to any company like ours, but particular ideas still need to be put into practice, which is not always easy.

Price

Another key 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 top 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 goals your business has.

Whilst 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 shoppers take into account when they are making a purchase. It is also worth noting that customers don’t constantly consider the lowest 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 plan, key amongst which are the price sensitivity of your clients, what your rivals are doing and how can pricing boost your own profits. From a strategy point of view however, pricing can be covered by two main principals; price skimming and penetration pricing. These are outlined below.

Price skimming

The main idea behind price skimming is to make as much money as possible from the sector of the market which is price-insensitive and are going to be willing to spend a premium amount of money to receive a product or service early on. Not only can this technique yield great financial benefits, but it can also advertise an exclusive and high quality image of your product.

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. Makers could set nearly 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 other end of the pricing spectrum, and is tailored towards gaining a large market share at a short-term cost so that monetary rewards 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. When establishing a price for penetration it is still critical to not give a bad impression of your product by aiming for too low a figure.

Yet another thing to keep in mind is that “price” is the one 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.

“Product is paramount” is one of the main mottos used within our XBox hard drive mod company which tries to point out to all employees that we expect high quality production.

Place

Place is the portion of the marketing mix that is often not addressed 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 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 centres and retailers and other outlets around the world. Since distribution of a physical product costs money it is crucial to determine your own priorities and modify your distribution network appropriately.

With the growing use of the Internet by your prospective customers, marketing strategies have had to consider how they use the Internet to help deliver their products. By using the Internet as a point of contact (or even as a whole distribution route in download-based markets such as MP3s) companies are now able to reach out to a huge pool of potential customers. Effective placing of your product or service can therefore yield impressive economic results.

Promotion

When you mention the word “marketing”, most people immediately think of the promotional side of the marketing mix, although as we have seen, this is only 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 might be an expensive undertaking it is often an important one.

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 handing out 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 simply as targeted advertising material posted through your door. The potential for individualised advertising has never been so great.

Another significant part of promotion involves branding, which will not necessarily yield more product sales directly, but relates back to one of the preliminary purposes of marketing; getting customers to pick your product over those of your competitors. When all other parts of the marketing mix are equal it could be branding that sways a customer’s choice.

Putting it into Practice

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