The Fundamentals Of Marketing

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

First of all, it is a very rare case that a business can offer a product or service that is truly unique and cannot be provided by anyone else. This means that your business will be competing with other businesses that sell a similar product and you will both be trying to earn money from the same customers, who only want to spend their cash once. So how can you increase the chances of them spending money with you?

Marketing is the primary tool used by modern firms 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 deal of internal and external factors, but when done well it can be the single business practise that could make or break a company. Any time spent on marketing will reap rewards, although spending this time correctly can yield extraordinary results.

So where should you begin when constructing a marketing strategy for your own company? Well, each situation is different, and each industry will have its own set of strengths and weak points that must be taken into consideration, but there is a marketing rule that can be applied to almost any company to be used as a marketing framework. 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 express the fundamental building blocks of any marketing system. It reflects the fact that marketing is not a simple, blunt-edged business tool, but rather a subtle balance of different elements of business operations. It got its name since it is similar to the ingredients list for a recipe.

The term was later built upon 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 easy for company managers and marketers to swiftly associate the elements of marketing to the strengths of their own companies, and by doing so could very rapidly form a personalised and effective marketing plan. The four P’s are Product, Price, Place and Promotion.

While we were preparing the unveiling for our diamond grinding services we applied ideas from the marketing mix to create a plan.

Product

Whilst 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 selling, and at the end of the day it is the reason that buyers 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.

Many people don’t think that marketing has any role to play when it comes to the physical product that your company 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 an item 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 solutions on the market already, and since the market is relatively well saturated it would be very tough (and expensive) to “take on the big boys”.

Rather than creating 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 viable 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 evaluate your own products to recognise the reasons why a customer should buy your product rather than a competitors’. The technique is called product differentiation and forms one of the basic skills of the product part of the marketing mix pie.

A different form of this part of the marketing mix is known as product variation and is typically used to either extend the lifecycle of a product currently 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 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 incredibly competitive marketplace. Although these companies may have huge marketing budgets, the same principles can be applied to all businesses.

As part of our own marketing system, our how to make icing company thoroughly researched exactly what made our goods stand out from the crowd.

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 useful tool to use), but rather making use of the price of your products as a strategic weapon designed to achieve any particular goals your business has. The potential advantages of an effective pricing strategy are surprisingly substantial!

Whilst 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 customers take into account when they are making a purchase. It is also worth noting that customers do not always consider the lowest price to be the best value.

There are many questions that you need to ask yourself when devising a good pricing plan, key amongst which are the price sensitivity of your clients, what your rivals are doing and how can pricing maximise your own profits. From a strategy point of view however, pricing can be covered by two primary principals; price skimming and penetration pricing. These are outlined below.

Price skimming

The principal 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 prepared to spend a large 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. 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 opposite end of the pricing spectrum, and is geared towards gaining a large market share at a short-term cost so that financial benefits can be made long into the future. It can be a high risk 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 bad impression of your product by aiming for too low a figure.

Yet another thing to bear in mind is that “price” is the one 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 undertake. So it is even more essential to get your pricing technique right.

To optimise our web site for Google visibility we chose DVD for Children as a targeted phrase because it relates to our business and what we do.

Place

Place is the component of the marketing mix that is often overlooked by companies, but it is still a significant part of selling your product effectively. In a nutshell, it describes the way in which you deliver your product to your consumer, and subsequently how you collect money from them. It can be a fantastic marketing technique when applied correctly.

The most common ramifications of place-based marketing are the physical venues in which your goods are sold. For the majority of consumer products, this includes the distribution infrastructure between your manufacturing plants and shops or other outlets around the world. Since distribution of a physical product costs money it is important to identify your own priorities and adjust your distribution network accordingly. This is the primary application of this part of the marketing mix.

With the increasing use of the Internet by your potential customers, marketing strategies have had to take into account 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 placing of your product or service can therefore deliver impressive economic results.

Promotion

When you mention the word “marketing”, most people immediately think of the promotional side of the marketing mix, although as we have seen, this is only one branch of a more comprehensive system. Promotion can be used 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, producing 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 witnessed a great increase in promotion via e-mail and the Internet, or just as targeted advertising materials posted through your front door. The potential for individualised advertising has never been so great.

Another significant part of promotion involves branding, which will not necessarily yield more sales directly, but relates back to one of the preliminary purposes of marketing; getting customers to choose your product over those of your rivals.

Putting it into Practise

As previously mentioned every company is unique 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 strategy.

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