Almost every business on the planet sets out with the primary 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 business can offer a product or service that is genuinely unique and cannot be provided by anyone else. This means that your enterprise will be competing with other businesses that sell a similar item and you will both be trying to earn money from the same shoppers, 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 influenced by a great deal of internal and external factors, but when done right it can be the single business practice that can make or break a corporation.

So where should you start when constructing a marketing strategy for your own business? Well, each situation is different, and every 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 framework.

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 system. It demonstrates the fact that marketing is not a simple, blunt-edged business technique, but rather a delicate balance of different elements 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 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 business managers and marketers to quickly 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 four P’s are Product, Price, Place and Promotion.

Our organisation excels in offering the ability to easily paint concrete surfaces and whilst we all believed our marketing strategy was adequate we have seen advancements since using marketing mix principles.

Product

Although every aspect of the marketing mix is a necessity, the “product” element mentioned as one of the four P’s is possibly 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.

Several people don’t 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 precise opposite sentiment. Surely it should be the other way around - your manufacturing department creates a product for sale and then it is the task of the marketing department to find ways to sell it, right? This is not always the case.

Consider the computer software market as an example. There are many well-known brands of both operating system and software application products on the market already, and since 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 help in this situation?

Rather than developing an operating system and then attempting to craft a marketing strategy to rival the likes of Microsoft or Apple, it would be more effective to look at what sorts of product are sought after in the current marketplace, and how feasible it would be to manufacture and sell them.

Once your products have been designed and created it is still a vital 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’. The skill is called product differentiation and is one of the fundamental skills of the product part of the marketing mix cake.

Another form of this part of the marketing mix is known as 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 customers as possible. Again, this technique can be applied at all stages of product development.

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

To maintain a standard corporate image a business ought to update their own website an example is bank sort codes which echo colors, fonts and also graphics associated with their own branding.

Price

Another important 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 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 specific targets your business has.

Although it may seem obvious, it’s still worth pointing out that price has always been, and likely always will be, one of the key 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 price.

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 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 primary principals; price skimming and also penetration pricing. These are outlined below.

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 premium amount of money to receive a product or service early on.

This pricing strategy 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. Manufacturers could set almost 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 tailored towards gaining a large market share at a short-term cost so that monetary rewards can be made 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 only 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 carry out. So it is even more essential to get your pricing strategy right.

When our organization was doing market research before a brand new product release I identified get a boyfriend was the key phrase that promoted the best “value for money” image.

Place

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

The most typical ramifications of place-based marketing are the physical venues in which your products are sold. For the majority of consumer products, this includes 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 important to identify your own priorities and adjust your distribution network appropriately.

With the growing use of the Internet by your prospective customers, marketing strategies have had to take into account how they use the Internet to help deliver their products. By using the Internet as a place of contact (or even as an entire distribution channel 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 yield impressive economic results.

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 employed on a very individual basis or as a mass communication instrument, and whilst it might be an expensive undertaking it is often an important one.

Advertising is one of the most common forms of promotion. Classically 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 coming of the information age we have seen a great increase in promotion via e-mail and the Internet, or just as targeted advertising material posted through your front door. The potential for individualised advertising has never been so great.

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

Putting it into Practice

As previously mentioned each 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.