Nearly every business on the planet sets out with the main 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. This fundamental principle is fairly straight-forward, although it contains many specific details.

First of all, it is a very rare case where 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 contesting with other businesses that sell a similar item and you will both be trying to earn money from the same shoppers, who only want to spend their cash once. So how can you improve the chances of them spending money with you?

Marketing is the main tool used by modern organisations to draw potential 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 right it can be the one 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 outcomes.

So where should you start when creating a marketing strategy for your own business? Well, every situation is different, and each company will have its own set of advantages and weak points 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 phrase that was first coined in the 1950’s and is a phrase that is used to express the fundamental building blocks of any marketing strategy. It demonstrates the fact that marketing is not a simple, blunt-edged business tool, but rather a delicate balance of different elements of business operations.

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 business managers and marketers to swiftly relate the elements of marketing to the strengths of their own companies, and by doing so could very rapidly form a customised and effective marketing strategy. The four P’s are Product, Price, Place and Promotion.

The “product” aspect of the four P’s could refer to a service, such as chiropractor nottingham, or any intangible service being offered for sale by a business.

Product

Whilst every element of the marketing mix is a necessity, the “product” element mentioned as one of the four P’s is possibly the most crucial of all. It describes the physical product or intangible service that your business will be offering, and at the end of the day it is the reason that customers are going to spend money with you.

Several people don’t think that marketing has any role 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 opposite way around - your production department creates a product for sale and then it is the job of the marketing department to find ways to sell it, right?

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

Rather than developing an operating system and then attempting to craft a marketing strategy to take on 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 produce and sell them.

Once your products have been designed and created it is still a vital skill to be able to objectively review your own products to recognise the reasons that a customer would buy your product rather than a competitors’.

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 new product attractive to as many customers as possible.

The car 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 good effect to sell their own goods in an extremely competitive marketplace.

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Price

Another key factor in the marketing mix relates to the price of your products or services. This is not a simple case of performing market research to determine the highest price that your customers would spend (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 company has. The potential advantages of an effective pricing strategy are surprisingly large!

Whilst it may seem obvious, it’s still worth noting 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 always consider the lowest price to be the best value.

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 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. These are outlined below.

Price skimming

The principal 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 prepared to spend a large amount of money to get a product or service early on.

This pricing technique is very often used in the consumer electronics industry 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. By making use of this method as part of a pre-ordering strategy, a firm can help to smooth its own cash 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 risky strategy, but when used correctly it can setup revenue streams for many years to come. When setting a price for penetration it is still essential to not give a poor impression of your product by aiming for too low a figure.

Another thing to bear in mind is that “price” is the one 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 undertake. So it is even more vital to get your pricing strategy right.

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Place

Place is the portion of the marketing mix that’s often not addressed by companies, but it’s still an important part of selling your product effectively. In short, it describes the way in which you provide 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 goods are sold. For the vast majority of consumer products, this involves the distribution infrastructure between your manufacturing centres and shops and other outlets around the country. Since distribution of a physical product costs money it is important to identify your own priorities and adjust your distribution network accordingly.

With the increasing use of the Internet by your potential customers, marketing methods 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 an entire distribution route in download-based markets such as MP3s) firms are now able to reach out to a huge pool of potential customers.

Promotion

When you mention the word “marketing”, most 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 tool, and whilst it can be an expensive undertaking it is often an important one.

Advertising is one of the most common forms of promotion. Classically 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 arrival 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 door.

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

Putting it into Practice

As previously mentioned every business is different 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 plan.