Archive for May, 2010

Nearly every company on the planet sets out with the main objective of making money. This is generally done by producing some form of product, or offering a service, and then charging people money for it. This fundamental principle is fairly straight-forward, although it contains many intricate details.

First of all, it is a very rare case that a business can offer a product or service that is genuinely unique and cannot be provided by anybody else. This means that your business will be competing with other businesses that sell a similar item and you will both be trying to make money from the same shoppers, who only want to spend their cash once.

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 single business practice that could make or break a company.

So where should you start when creating a marketing strategy for your own business? Well, every situation is different, and each company will have its own set of advantages and weak points 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 term that was first coined during the 1950′s and is a phrase 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 aspects of business operations. It got its name since it is similar to the ingredients list for a recipe.

The term was later developed to include the idea 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 swiftly associate the elements of marketing to the strengths of their own organisations, and by doing so could very rapidly create a personalised and efficient marketing strategy.

The “product” aspect of the four P’s could pertain to any product, like drama lesson plans, or any non-physical service being offered for sale by a business, see our website here.

Product

Although every aspect of the marketing mix is a requirement, 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 buyers are going to spend money with you.

Many people do not think that marketing has any place to play when it comes to the actual product that your company 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 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 market already, and since 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 assist in this circumstance?

Rather than creating an operating system and then trying to craft a marketing strategy to rival 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. By being aware of the marketing mix early on in your product development period you can prevent business dead-ends at a later stage.

Once your products have been fashioned and created it is still a vital skill to be able to objectively evaluate your own products to identify the reasons why a customer would buy your product rather than a competitors’.

A different form of this part of the marketing mix is called product variation and is generally used to either extend the lifecycle of a product currently in the market, or to make your new product attractive to as many consumers 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. Although these companies may have huge marketing budgets, the same principles can be applied to all businesses.

With the rise of the Internet and ecommerce companies see their sites such as maytag bottom freezer refrigerators may be utilised for a direct sales channel and distribution system.

Price

Another key factor in the marketing mix relates to the price of your products or services. This is not a simple case of carrying out market research to determine the top price that your customers would pay (although that can be a handy tool to use), but rather using the price of your products as a strategic weapon designed to achieve any specific goals your company has.

Although it may seem obvious, it is 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 do not constantly consider the lowest price to be the best value.

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 customers, what your rivals are doing and how can pricing boost your own profits. From a strategy point of view however, pricing can be covered by two primary principals; price skimming and also penetration pricing.

Price skimming

The principal idea behind price skimming is to make as much cash as possible from the segment of the market which is price-insensitive and will be willing 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 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 rewards can be earned long into the future. It can be a risky strategy, but when used correctly it can create revenue streams for many years to come.

Yet another thing to keep in mind is that “price” is the one part of the marketing mix that will generate earnings for a business. The other members of the four P’s will all cost money to create or undertake. So it is even more essential to get your pricing technique right.

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Place

Place is the part of the marketing mix that is often overlooked by companies, but it is still an important part of selling your product effectively. In short, it describes the method in which you deliver your product to your consumer, and subsequently how you collect money from them. It can be a great marketing technique when applied appropriately.

The most typical 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 infrastructure between your manufacturing centres and retailers or other outlets around the world. Since distribution of a physical product costs money it is crucial to identify your own priorities and adapt your distribution network accordingly. This is the main application of this part of the marketing mix.

With the increasing use of the Internet by your prospective customers, marketing strategies have had to consider how they use the Internet to help deliver their products. By using the Internet as a place of contact (or even as a whole distribution channel 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”, many people instantly think of the promotional side 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 an expensive undertaking it is often an essential one. The key concern of promotion is to deliver a certain message that will increase sales.

Advertising is one of the most common forms of promotion. Typically it would be done by posting on billboards, creating short clips for TV and radio or by physically distributing flyers or leaflets to potential buyers. With the coming 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 front door.

Another significant part of promotion involves branding, which may not necessarily yield more sales directly, but goes back to one of the initial functions of marketing; getting customers to pick your product over those of your competitors. When all other pieces of the marketing mix are equal it can be branding that sways a customer’s choice.

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 a good view of your own marketing strategy.

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What product(s) will you be offering to others? Is it something that most people need, use, or would want? Products or services with membership subscription would be a good choice here as they provide residual income.

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Companies will often pay per hour! This is a great opportunity for those looking for a part time job or those looking to replace their full time job with a real company. Companies have found they can expand their workforce on an as needed basis by hiring people who are looking something other than a full-time job.

Marketing on the internet for some reason or another has the perception of being an industry where you can jump right in and make money. The reasons for these stereotypes is the many marketers who promote the internet as a get rich quick arena. Marketing is not for everyone; a home based online business does require some knowledge of business, accounting, skill, and economics. Sometimes, the going will get tough and things may not work out as you had planned.

Building an online business is more than just creating one website and choosing just one venture. Sure, you can make a lot of money on one project, but once it starts raining, it POURS! Building up your link popularity is essential to developing a good relationship with the major search engines. To do that you need to establish as many inbound links as possible, preferably from highly respected directories such as the Open Directory Project , and from websites and directories related to your target field.

Blogs has started to replace the traditional websites. Earlier they were used to be personal pages, but due to its search engine friendliness, Blogs are used in many ways. Blogging is an excellent and easy way to get started because if you can type you can blog. And the blogging platform that you use builds the web pages for you so you do not need any technical expertise. Blogging can help you make big money online. Everyday, diverse opportunities for making money online from blogging are being invented.

Laura Harrison