Product, Price, Place & Promotion
Practically every business 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 people money for it.
Firstly, it is a very rare case that a business can offer a product or service that is truly unique and cannot be supplied by anybody else. This means that your company will be contesting 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 primary tool used by modern firms to draw prospective customers to do business with them and not with their competitors. It is a very broad topic that is influenced by a great deal of internal and external variables, but when done well it can be the one business practise that could make or break a company. Any time spent on marketing will reap benefits, although spending this time efficiently can yield incredible outcomes.
So where should you begin when constructing a marketing strategy for your own company? Well, every situation is different, and every industry will have its own set of strengths and weak points 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. It is known as the “Marketing Mix”.
The Marketing Mix
The marketing mix was a phrase that was first coined in the 1950′s and is a phrase that is used to describe the fundamental building blocks of any marketing system. It reflects the fact that marketing is not a straightforward, blunt-edged business technique, but rather a subtle balance of different aspects of business operations. It got its name since it is similar to the ingredients checklist for a recipe.
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 easy for company managers and marketers to quickly associate the elements of marketing to the strengths of their own companies, and by doing so could very quickly form a customised and efficient marketing plan. The four P’s are Product, Price, Place and Promotion.
The “product” element of the four P’s can refer to a product, like resin flooring, or any intangible asset being offered for sale by a business.
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 critical 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 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 common train of thought very often bears the precise opposite sentiment. Surely it should be the opposite way around – your production department creates a product 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 established brands of both operating system and software application solutions in the marketplace already, and since the market is fairly well saturated it would be very tough (and expensive) to “take on the big boys”. So how could the principles of the marketing mix help in this situation?
Rather than creating an operating system and then attempting to craft a marketing strategy to take on the likes of Microsoft and Apple, it would be far 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.
Once your goods have been fashioned and created it is still a critical skill to be able to objectively review your own products to identify the reasons why a customer would buy your product rather than a competitors’. The skill is called product differentiation and forms one of the basic skills of the product part of the marketing mix cake.
A different form of this part of the marketing mix is called product variation and is typically used to either extend the lifecycle of a product already in the market, or to make your brand new product attractive to as many customers as possible. 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 products in an incredibly competitive marketplace.
To preserve a standard corporate image a business should update their website an example we found was Maytag refrigerators who reflect colourings, fonts and images associated with their own branding.
Price
Another important factor in the marketing mix relates to the price of your products or services. This isn’t a simple case of carrying out market research to determine 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 objectives 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 crucial factors that shoppers take into account when they are making a purchase. It is also worth noting that customers don’t always consider the lowest price to be the best price. In fact a price that is too low can often turn customers away.
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 clients, 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 main principals; price skimming and 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 will be willing to spend a large amount of money to get a product or service early on.
This pricing strategy 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 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 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 used correctly it can create revenue streams for many years to come.
Yet another thing to keep 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 produce or undertake. So it is even more vital to get your pricing technique right.
To optimise our web site for search engine visibility we selected buying sunny plants as an aimed phrase because it relates to our company and what we offer.
Place
Place is the portion 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 method in which you provide your product to your customer, and subsequently how you receive money from them. It can be a great marketing technique when used appropriately.
The most common implications of place-based marketing are the physical venues in which your goods are sold. For the vast majority of consumer products, this includes the distribution infrastructure between your production centres and shops or other outlets around the country. Since distribution of a physical product costs money it is crucial to determine your own priorities and adjust your distribution network appropriately. This is the principal use of this part of the marketing mix.
With the increasing use of the Internet by your prospective customers, marketing methods 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 a whole distribution channel in download-based markets such as MP3s) companies are now able to reach out to a huge 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 employed on a very individual basis or as a mass communication tool, and whilst it can be an expensive undertaking it is often an essential 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 simply as targeted advertising material posted through your door.
Another significant part of promotion involves branding, which may not necessarily yield more product sales directly, but relates back to one of the initial purposes 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 Practise
As previously mentioned each business is different and will have different marketing needs. By using a balance of the four P’s reviewed above you can take an effective view of your own marketing strategy.
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