Product, Price, Place & Promotion
Almost every business on the planet sets out with the primary 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. This fundamental theory is fairly straight-forward, although it contains many specific details.
Firstly, it is a very rare case where a company can offer a product or service that is truly unique and cannot be provided by anyone else. This means that your enterprise will be competing 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. So how can you improve the chances of them spending money with you?
Marketing is the main tool used by modern firms to draw potential customers to do business with them and not with their rivals. It is a very broad topic that is affected by a great number of internal and external variables, but when done well it can be the one business practise that could make or break a company.
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 weak points that must be taken into consideration, but there is a marketing principle that can be applied to almost any corporation to be used as a marketing platform.
The Marketing Mix
The marketing mix was a term that was first coined during the 1950’s and is a phrase that is used to describe the fundamental building blocks of any marketing strategy. It demonstrates the fact that marketing is not a straightforward, blunt-edged business tool, but rather a subtle balance of different aspects of business functions. It got its name since it is similar to the ingredients checklist for a recipe.
The term was later built upon to include the idea of “four P’s” that described the essential elements of the marketing mix. The formalisation of these P’s made it very clear for company managers and marketers to swiftly associate the elements of marketing to the strengths of their own companies, and by doing so could very quickly form a tailored and effective marketing strategy.
Our company has grown to become a forerunner for back pain treatment Nottingham since using customised marketing and advertising concepts across our complete range of products.
Product
Whilst 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 identifies 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. If this element is not adequately managed then your company will find it hard to survive.
Several people do not think that marketing has any role to play when it comes to the actual 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 a product for sale and then it is the task of the marketing department to discover ways to sell it, right? This is not always the case.
Take the computer software market as an example. There are many established brands of both operating system as well as software application solutions in the marketplace already, and because the market is fairly well saturated it would be very tough (and expensive) to “take on the big boys”. So how could the principles of the marketing mix help in this circumstance?
Rather than creating an operating system and then trying to craft a marketing strategy to rival the likes of Microsoft or Apple, it would be more effective to look at what sorts of product are desired in the current marketplace, and how feasible it would be to manufacture 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 time.
Once your products have been fashioned and created it is still a critical skill to be able to objectively evaluate your own products to recognise the reasons why a customer would buy your product rather than a competitors’. The technique is called product differentiation and forms one of the basic skills of the product part of the marketing mix cake.
A different form of this part of the marketing mix is known as 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. Again, this technique can be applied at all stages of product development.
The motor industry uses this approach very effectively by offering various engines, trim packages and interior options with the cars that they offer. They use the marketing mix to good effect to sell their own goods in an extremely competitive marketplace.
An example of one of the most recent forms of promotional marketing is the new electricity prices comparison website that provides flexible and accessible means to target potential consumers.
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 top price that your customers would spend (although that can be a useful tool to use), but rather using the price of your products as a strategic weapon designed to achieve any specific objectives your company has. The potential benefits of an effective pricing strategy are surprisingly substantial!
Although it may seem obvious, it’s still worth noting that price has always been, and likely 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 though, pricing can be covered by two primary principals; price skimming and penetration pricing.
Price skimming
The main idea behind 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 large amount of money to get a product or service early on. Not only can this approach yield great financial benefits, but it can also promote an exclusive and high quality image of your product.
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 nearly any price they wanted to and there would still be a loyal base 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 geared 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 risky strategy, but when used correctly it can create revenue streams for many years to come. When establishing a price for penetration it is still important to not give a bad 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 income 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.
Before our corporation began studying on-line promoting for heated body warmers there didn’t appear an clear choice of keyword to use as our main focus.
Place
Place is the portion of the marketing mix that is often not addressed by companies, but it is still a significant part of selling your product effectively. In a nutshell, it describes the method in which you deliver your product to your consumer, and subsequently how you collect money from them.
The most common implications of place-based marketing are the physical venues in which your goods are sold. For the majority of consumer products, this involves the distribution network between your production 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 adapt your distribution network appropriately. This is the primary application of this element of the marketing mix.
With the growing use of the Internet by your prospective 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 place 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 huge pool of potential customers.
Promotion
When you mention the word “marketing”, many people instantly 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 may 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 materials posted through your door. The potential for individualised advertising has never been so good.
Another important part of promotion involves branding, which will not necessarily yield more product sales directly, but relates back to one of the initial purposes of marketing; getting customers to pick your product over those of your rivals. When all other pieces of the marketing mix are equal it can be branding that swings a customer’s decision.
Putting it into Practise
As previously mentioned every 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.
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