The Fundamentals Of Marketing

Nearly 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 people money for it. This fundamental principle is fairly straight-forward, though it contains many intricate details.

Firstly, it is a very rare case that a business can offer a product or service that is genuinely unique and cannot be supplied by anybody else. This means that your company will be contesting with other businesses that sell a similar product and you will both be trying to earn money from the same customers, who only want to spend their cash once.

Marketing is the primary tool used by modern businesses 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 number of internal and external variables, but when done right it can be the one business practise that can make or break a corporation. Any time spent on marketing will reap benefits, although spending this time efficiently can yield incredible results.

So where should you start when creating a marketing strategy for your own company? Well, each situation is different, and every business will have its own set of advantages and weaknesses 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 in the 1950′s and is an expression that is used to express the fundamental building blocks of any marketing strategy. It demonstrates the fact that marketing is not a straightforward, blunt-edged business technique, but rather a delicate balance of different aspects of business operations. It got its name because 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 easy for business managers and marketers to quickly relate the elements of marketing to the strengths of their own organisations, and by doing so could very quickly create a tailored and effective marketing plan. The four P’s are Product, Price, Place and Promotion.

The “product” aspect of the four P’s can refer to a service, such as chiropractor Nottingham, or any kind of intangible service being provided for sale by a company.

Product

Although every aspect of the marketing mix is a necessity, the “product” element mentioned as one of the four P’s is perhaps the most crucial of all. It identifies the physical product or intangible service that your company 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 part is not adequately managed then your company will find it hard to survive.

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 typical train of thought very often bears the exact opposite sentiment. Surely it should be the other 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 established brands of both operating system and software application products in the market already, and since the market is fairly well saturated it would be incredibly 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 or Apple, it would be more effective to look at what types of product are desired 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 cycle you can avoid business dead-ends at a later time.

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’.

Another form of this part of the marketing mix is called product variation and is generally used to either lengthen the lifecycle of a product currently in the market, or to make your new product attractive to as many customers as possible. Again, this method can be applied at all stages of product development.

The motor industry uses this technique very effectively by offering various engines, trim packages and interior options with the cars that they sell. They use the marketing mix to good effect to sell their own products in an incredibly competitive marketplace. Although these companies may have huge marketing budgets, the same concepts can be applied to all businesses.

An example of one of the most recent forms of public advertising is this electricity prices comparison website that offers versatile and accessible means to target potential consumers.

Price

Another key factor in the marketing mix concerns 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 tool designed to achieve any specific targets your company has. The potential benefits of an effective pricing strategy are surprisingly large!

Whilst it may seem obvious, it’s still worth pointing out that price has always been, and likely always will be, one of the crucial factors that shoppers take into account when they are making a purchase. It is also worth noting that customers do not constantly consider the lowest price to be the best value. Actually a price that is too low can often turn buyers away.

There are many questions that you need to ask yourself while devising a good pricing strategy, key among 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 penetration pricing. These are outlined below.

Price skimming

The main idea driving price skimming is to make as much cash as possible from the segment of the market which is price-insensitive and will be prepared to spend a premium amount of money to receive a product or service early on.

This pricing strategy 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 nearly any price they wanted to and there would still be a loyal base 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 financial benefits 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.

Yet 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 create or undertake.

To optimise our web site for Google search marketing we selected cameras disposable as an aimed key phrase since it relates to our company and what we offer.

Place

Place is the portion of the marketing mix that’s often overlooked by companies, but it is still an important part of selling your product successfully. In a nutshell, it describes the method in which you deliver your product to your customer, and consequently how you receive money from them. It can be a fantastic marketing approach when applied appropriately.

The most common ramifications of place-based marketing are the physical locations in which your products are sold. For the majority of consumer products, this involves the distribution network between your production plants and shops and other outlets around the country. Since distribution of a physical product costs money it is crucial to determine your own priorities and alter your distribution network accordingly. This is the principal application of this part of the marketing mix.

With the growing use of the Internet by your potential customers, marketing methods have had to take into account how they use the Internet to help distribute 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) firms are now able to reach out to a huge pool of potential customers. Effective positioning of your product or service can therefore deliver impressive economic results.

Promotion

When you say the word “marketing”, most people instantly 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 instrument, and whilst it may be a costly undertaking it is often an important one. The primary concern of promotion is to deliver a specific message that will improve sales.

Advertising is one of the most typical forms of promotion. Typically it would be done by posting on billboards, producing 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 materials posted through your door. The potential for individualised advertising has never been so good.

Another important part of promotion involves branding, which may not necessarily yield more product sales directly, but relates back to one of the initial functions of marketing; getting customers to pick your product over those of your competitors.

Putting it into Practise

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