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

Firstly, it is a very rare case that a company can offer a product or service that is genuinely unique and cannot be supplied by anybody else. This means that your enterprise will be competing with other businesses that sell a similar item and you will both be trying to make money from the same customers, who only want to spend their cash once. So how can you boost the chances of them spending money with you?

Marketing is the main tool used by modern businesses to draw potential customers to do business with them and not with their competitors. It is a very broad topic that is affected by a great deal of internal and external factors, but when done right it can be the one business practice that can make or break a company. Any time spent on marketing will reap benefits, although spending this time correctly can yield extraordinary results.

So where should you start when constructing a marketing strategy for your own business? Well, each situation is different, and each company will have its own set of strengths 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 platform. It is called the “Marketing Mix”.

The Marketing Mix

The marketing mix was a term that was first coined during the 1950’s and is an expression 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 elements of business functions.

The term was later developed 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 organisations, and by doing so could very rapidly form a tailored and effective marketing system.

While we were planning the release for our tax investigation insurance policy for businesses packages we employed concepts from the marketing mix to create a strategy.

Product

Although every element 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 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. If this part is not adequately managed then your organisation will find it hard to make it through.

Several 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 typical train of thought very often bears the exact opposite sentiment. Surely it should be the opposite way around – your manufacturing department creates an item for sale and then it is the job 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 well-known brands of both operating system as well as software application products in the market already, and because the market is fairly well saturated it would be very tough (and expensive) to “take on the big boys”.

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 feasible it would be to produce and sell them.

Once your products 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 technique 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 called product variation and is typically used to either lengthen the lifecycle of a product already in the market, or to make your new product attractive to as many customers as possible.

The motor industry uses this approach very effectively by offering different engines, trim packages and interior options with the cars that they offer. They use the marketing mix to great effect to sell their own goods in an extremely competitive marketplace.

An example of one of the newest forms of promotional marketing is this maytag side by side refrigerators site that offers flexible and accessible means to reach potential customers.

Price

Another key factor in the marketing mix relates to the price of your products or services. This isn’t a simple case of performing 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 tool designed to achieve any particular targets your company has. The potential advantages of an effective pricing plan are surprisingly substantial!

Whilst it may seem obvious, it is still worth noting that price has always been, and probably 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 don’t constantly consider the lowest price to be the best price. In fact a price that is too low can sometimes turn buyers away.

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 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 main principals; price skimming and 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 are going to be willing to spend a premium amount of money to receive a product or service early on.

This pricing technique is very often used in the consumer electronics market 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. By using this method as part of a pre-ordering strategy, a firm can help to smooth its own money flow.

Penetration pricing

Penetration pricing is at the opposite end of the pricing spectrum, and is geared 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 employed correctly it can create revenue streams for many years to come. When setting a price for penetration it is still important to not give a poor impression of your product by aiming for too low a figure.

Yet another thing to bear in mind is that “price” is the only 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.

We were able to use our previous market analysis relating to lamb cooking to kick off the online key phrase optimisation we were doing.

Place

Place is the portion of the marketing mix that’s often not addressed by companies, but it is still an important part of selling your product effectively. In a nutshell, it describes the method in which you provide your product to your customer, and subsequently how you collect money from them.

The most common implications of place-based marketing are the physical venues in which your products are sold. For the vast majority of consumer products, this includes 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 determine your own priorities and adjust your distribution network accordingly. This is the main use of this element of the marketing mix.

With the increasing use of the Internet by your prospective customers, marketing methods have had to consider how they use the Internet to help distribute their products. By using the Internet as a point of contact (or even as an entire distribution channel in download-based markets such as MP3s) companies are now able to reach out to a huge pool of possible customers.

Promotion

When you say the word “marketing”, many people immediately think of the promotional side 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 can 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 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 front door.

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 rivals.

Putting it into Practice

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