08 Mar 10 The Marketing Mix

Almost every business on the planet sets out with the primary objective of earning money. This is generally done by manufacturing some form of product, or offering a service, and then charging customers money for it.

First of all, 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 business will be contesting with other businesses that sell a similar product and you will both be trying to make money from the same customers, who only want to spend their cash once.

Marketing is the primary tool used by modern organisations to draw prospective 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 variables, but when done well it can be the single business practice that can make or break a company. Any time spent on marketing will reap benefits, although spending this time correctly can yield incredible outcomes.

So where should you begin when constructing a marketing strategy for your own company? Well, every situation is different, and each industry 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 phrase that was first coined during the 1950’s and is an expression 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 technique, but rather a subtle balance of different elements of business functions.

The term was later developed to include the concept of “four P’s” that described the essential elements of the marketing mix. The formalisation of these P’s made it very clear for business managers and marketers to swiftly associate the elements of marketing to the strengths of their own organisations, 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 worldwide business idea and could get applied to floor resin services as well as any amount of other 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 crucial 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.

Many people don’t think that marketing has any role to play when it comes to the actual 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 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? 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 on the marketplace already, and because the market is fairly well saturated it would be incredibly tough (and expensive) to “take on the big boys”. So how could the principles of the marketing mix help in this circumstance?

Rather than developing an operating system and then trying to craft a marketing strategy to take on the likes of Microsoft or Apple, it would be more effective to look at what types of product are sought after 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 avoid business dead-ends at a later stage.

Once your products have been designed 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 technique is called product differentiation and forms one of the basic skills of the product part of the marketing mix pie.

Another form of this part of the marketing mix is called product variation and is typically 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. Once again, this technique can be applied at all stages of product development.

The car industry uses this technique 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 products in an extremely competitive marketplace.

To preserve a standard corporate image a company should update their portal an example we found was bank sort codes which echo colours, text and also graphics associated with their branding.

Price

Another important 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 pay (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 company has. The potential benefits of an effective pricing strategy are surprisingly substantial!

Whilst it may seem obvious, it’s 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 don’t always consider the lowest price to be the best price.

There are many questions that you need to ask yourself when devising a good pricing strategy, key amongst which are the price sensitivity of your clients, 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 main principals; price skimming and also penetration pricing. These are outlined below.

Price skimming

The principal idea behind price skimming is to make as much cash as possible from the sector of the market which is price-insensitive and are going to be prepared to spend a large amount of money to get a product or service early on.

This pricing technique is frequently 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 core 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 opposite end of the pricing spectrum, and is tailored towards gaining a large market share at a short-term cost so that financial rewards can be earned long into the future. It can be a risky strategy, but when employed correctly it can create 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 carry out.

Before our company began looking into online marketing relating to plumbing apprenticeships there did not seem the obvious choice of key phrase to use as our primary focus.

Place

Place is the component of the marketing mix that is often overlooked by companies, but it’s still a significant part of selling your product successfully. In short, it describes the way in which you provide your product to your customer, and subsequently how you receive money from them. It can be a great marketing technique when applied correctly.

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 includes the distribution infrastructure between your production plants and retailers and other outlets around the world. Since distribution of a physical product costs money it is important to determine your own priorities and adjust your distribution network accordingly.

With the increasing use of the Internet by your potential 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 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 large 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 comprehensive 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 essential one. The primary concern of promotion is to deliver a certain message that will increase 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 arrival of the information age we have seen a great increase in promotion via e-mail and the Internet, or simply as targeted advertising material posted through your door.

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

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 a good view of your own marketing strategy.