Product, Price, Place & Promotion
Almost every company on the planet sets out with the main objective of earning money. This is usually done by producing 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 supplied by anybody else. This means that your enterprise will be contesting 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 money once. So how can you improve the chances of them spending money with you?
Marketing is the main tool used by modern businesses to draw prospective customers to do business with them and not with their competitors. It is a very broad topic that is affected by a great number of internal and external variables, but when done right 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 correctly can yield incredible results.
So where should you begin when constructing a marketing strategy for your own company? Well, every situation is different, and every business 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 platform.
The Marketing Mix
The marketing mix was a phrase that was first coined during 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 elements of business operations. It got its name because it is similar to the ingredients list 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 quickly associate the elements of marketing to the strengths of their own companies, and by doing so could very quickly create a personalised and efficient marketing system. The four P’s are Product, Price, Place and Promotion.
Marketing is a global business idea which may be applied to double bedding products or almost any number of different products and services.
Product
Although every element 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 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 organisation will find it hard to make it through.
Many people don’t think that marketing has any role to play when it comes to the physical 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 an item for sale and then it is the job of the marketing department to find ways to sell it, right?
Take 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 fairly well saturated it would be incredibly tough (and expensive) to “take on the big boys”.
Rather than creating 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 feasible it would be to manufacture and sell them.
Once your goods have been designed and created it is still a critical skill to be able to objectively review your own products to identify the reasons that a customer would buy your product rather than a competitors’. The skill is called product differentiation and forms one of the fundamental 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 typically used to either extend the lifecycle of a product already in the market, or to make your new product attractive to as many consumers as possible. Again, this technique can be applied at all stages of product development.
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. Although these companies may have substantial marketing budgets, the same concepts can be applied to all companies.
Marketing plays a critical role within our own DVD for children reseller strategy and should not get treated as an afterthought.
Price
Another key factor in the marketing mix concerns the price of your products or services. This isn’t a simple case of carrying out market research to figure out 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 goals your business has. The potential benefits of an effective pricing strategy are surprisingly large!
Although it may seem obvious, it’s still worth pointing out 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 cheapest price to be the best value. In fact a price that is too low can often turn customers away.
There are many questions that you need to ask yourself while devising a good pricing strategy, 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 though, pricing can be covered by two primary principals; price skimming and also penetration pricing.
Price skimming
The main idea behind price skimming is to make as much cash as possible from the sector 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 strategy is frequently 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 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 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 risky strategy, but when employed correctly it can setup revenue streams for many years to come.
Another thing to keep 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 produce or undertake.
To optimize our website for google marketing we chose large childrens bean bags as a targeted phrase since it relates to our business and what we offer.
Place
Place is the portion of the marketing mix that is often disregarded by companies, but it’s still a significant part of selling your product effectively. In a nutshell, it describes the method in which you provide your product to your consumer, and subsequently how you collect money from them. It can be a great marketing technique when used appropriately.
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 manufacturing centres and shops and other outlets around the world. Since distribution of a physical product costs money it is important to determine your own priorities and adapt your distribution network accordingly. This is the main application of this element of the marketing mix.
With the growing use of the Internet by your prospective customers, marketing strategies 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 channel in download-based markets such as MP3s) firms are now able to reach out to a huge pool of possible customers.
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 merely one branch of a more comprehensive system. Promotion can be used on a very individual basis or as a mass communication instrument, 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 boost sales.
Advertising is one of the most typical 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 customers. With the coming of the information age we have seen a great increase in promotion via e-mail and the Internet, or just as targeted advertising material posted through your front door. The potential for individualised advertising has never been so good.
Another significant part of promotion involves branding, which will not necessarily yield more product sales directly, but goes back to one of the preliminary purposes of marketing; getting customers to pick your product over those of your rivals.
Putting it into Practice
As previously mentioned every business is different 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.
This entry was posted on Sunday, August 29th, 2010 at 3:54 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.