Nearly every company on the planet sets out with the main 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.
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 anybody else. This means that your business will be competing 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 firms to draw prospective customers to do business with them and not with their competitors. It is a very extensive topic that is affected by a great number of internal and external factors, but when done right it can be the single business practice that can make or break a company.
So where should you start when creating a marketing strategy for your own company? Well, every situation is different, and each industry will have its own set of advantages and weaknesses 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 phrase that was first coined in 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 simple, blunt-edged business technique, but rather a delicate balance of different elements of business functions.
The term was later developed 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 quickly relate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly form a customised and efficient marketing strategy. The four P’s are; Product, Price, Place and Promotion.
Our company created a promotional approach for our own balloons by using this marketing and advertising mix to identify our marketing advantages.
Product
Whilst every element of the marketing mix is a necessity, the “product” element mentioned as one of the four P’s is perhaps the most critical 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 correctly managed then your organisation will find it hard to make it through.
Many people do not think that marketing has any place to play when it comes to the physical product that your company is selling. In fact, the common train of thought very often bears the precise opposite sentiment. Surely it should be the opposite way around – your production department creates an item for sale and then it is the task 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 as well as software application products in the market already, and since the market is relatively well saturated it would be incredibly 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 far more effective to look at what types of product are sought after in the current marketplace, and how viable it would be to produce and sell them.
Once your products have been fashioned and created it is still a critical skill to be able to objectively evaluate your own products to identify 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 typically used to either lengthen the lifecycle of a product already in the market, or to make your brand new product attractive to as many customers as possible. Once again, this method can be applied at all stages of product development.
The car 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 great effect to sell their own goods in an extremely competitive marketplace.
It is incredibly common to find a significant amount of balloon suppliers that plan for manufacturing and product sales but not properly for marketing.
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 highest price that your customers would pay (although that can be a handy tool to use), but rather making use of the price of your products as a strategic weapon designed to achieve any specific goals your company has. The potential advantages of an effective pricing plan are surprisingly large!
Whilst 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 shoppers take into account when they are making a purchase. It is also worth noting that customers don’t always consider the cheapest 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 customers, 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. These are outlined below.
Price skimming
The main idea behind price skimming is to make as much money 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 receive a product or service early on.
This pricing strategy is frequently used in the consumer electronics market where customers will often eagerly await the release of a new mobile phone or computer games console. Manufacturers could set nearly any price they wanted to and there would still be a loyal base of customers that would pay it. By using 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 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 used correctly it can setup revenue streams for many years to come. When establishing a price for penetration it is still critical to not give a poor impression of your product by aiming for too low a figure.
Another thing to bear in mind is that “price” is the only 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 carry out.
To optimize our website for google search visibility we chose balloon stands as an aimed key phrase because it relates to our company and what we offer.
Place
Place is the component of the marketing mix that is often not addressed by companies, but it’s still an important part of selling your product effectively. In short, it describes the method in which you provide your product to your customer, and consequently how you collect money from them. It can be a fantastic marketing technique when used correctly.
The most common implications of place-based marketing are the physical locations in which your products are sold. For the majority of consumer products, this includes the distribution network between your production plants and retailers or other outlets around the world. Since distribution of a physical product costs money it is crucial to determine your own priorities and alter your distribution network appropriately.
With the growing use of the Internet by your potential customers, marketing techniques 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 route in download-based markets such as MP3s) companies are now able to reach out to a large pool of possible customers.
Promotion
When you say the word “marketing”, most people instantly 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 tool, and whilst it can be a costly undertaking it is often an important one. The primary concern of promotion is to deliver a particular message that will improve sales.
Advertising is one of the most typical forms of promotion. Classically it would be done by posting on billboards, producing 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 materials posted through your door.
Another significant part of promotion involves branding, which may not necessarily yield more sales directly, but relates back to one of the initial purposes of marketing; getting customers to pick your product over those of your rivals.
Putting it into Practice
As previously mentioned each business 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 plan.