The Fundamentals Of Marketing

Nearly every company on the planet sets out with the primary 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 theory is fairly straight-forward, though it contains many specific details.

First of all, it is a very rare case that a company can offer a product or service that is genuinely unique and cannot be provided 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 shoppers, who only want to spend their money 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 prospective customers to do business with them and not with their rivals. It is a very broad topic that is affected by a great number 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 start when creating a marketing strategy for your own business? 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 rule that can be applied to almost any corporation to be used as a marketing platform.

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 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 subtle balance of different elements of business functions.

The term was later built upon 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 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 personalised and effective marketing strategy.

This marketing style is not limited to physical items, services such as staining concrete floors could benefit from fresh marketing ideas or a new point of view.

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 crucial of all. It identifies 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.

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 common train of thought very often bears the precise opposite sentiment. Surely it should be the opposite way around – your manufacturing department creates a product for sale and then it is the job of the marketing department to discover ways to sell it, right?

Consider the computer software market as an example. There are many established brands of both operating system as well as software application products in the market already, and because the market is relatively 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 situation?

Rather than developing an operating system and then attempting to craft a marketing strategy to rival the likes of Microsoft and 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 produce 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 critical skill to be able to objectively evaluate your own products to identify the reasons that 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 extend the lifecycle of a product already in the market, or to make your new product attractive to as many consumers as possible.

The motor industry uses this technique 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 products in an extremely competitive marketplace. Although these companies may have substantial marketing budgets, the same concepts can be applied to all companies.

With the rise of the Internet and ecommerce businesses see that their sitesincluding lace tablecloths may be utilised as 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 isn’t a simple case of performing market research to figure out the top 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 tool designed to achieve any specific targets your company has.

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

There are many questions that you need to ask yourself while devising a good pricing plan, 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 though, pricing can be covered by two main principals; price skimming and penetration pricing.

Price skimming

The principal idea behind price skimming is to make as much money as possible from the segment of the market which is price-insensitive and will be willing to spend a premium amount of money to get 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. Manufacturers could set nearly any price they wanted to and there would still be a loyal base of customers that would pay it. By making use of this method as part of a pre-ordering strategy, a firm can help to smooth its own cash flow.

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 monetary benefits can be earned long into the future. It can be a high risk strategy, but when employed correctly it can setup 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 produce or carry out.

We were able to use our previous marketplace research relating to lamb cooking to launch the on-line keyword optimisation we were undertaking.

Place

Place is the part of the marketing mix that’s often overlooked by companies, but it is still a significant part of selling your product effectively. In short, it describes the method in which you provide your product to your customer, and subsequently how you collect money from them.

The most typical implications of place-based marketing are the physical locations in which your goods are sold. For the majority of consumer products, this involves the distribution infrastructure between your production plants and shops or other outlets around the country. Since distribution of a physical product costs money it is important to identify your own priorities and alter your distribution network appropriately. This is the main application of this part of the marketing mix.

With the growing 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 place of contact (or even as an entire distribution route in download-based markets such as MP3s) firms are now able to reach out to a huge pool of possible customers. Effective positioning of your product or service can therefore deliver impressive economic results.

Promotion

When you say the word “marketing”, many people instantly think of the promotional aspect of the marketing mix, although as we have seen, this is merely one branch of a more comprehensive system. Promotion can be employed on a very individual basis or as a mass communication tool, and whilst it can be an expensive undertaking it is often an important one. The key concern of promotion is to deliver a certain 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 customers. With the arrival of the information age we have witnessed a great increase in promotion via e-mail and the Internet, or simply as targeted advertising material posted through your door. The potential for individualised advertising has never been so great.

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 Practice

As previously mentioned every business is unique 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.

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