Product, Price, Place & Promotion

Nearly every business on the planet sets out with the main objective of earning money. This is usually done by producing some form of product, or offering a service, and then charging people money for it.

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 anyone 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 money once.

Marketing is the main tool used by modern businesses to draw potential customers to do business with them and not with their rivals. It is a very broad topic that is influenced by a great deal of internal and external factors, but when done well it can be the single business practice that could make or break a company.

So where should you start when constructing a marketing strategy for your own business? 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 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 in 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 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 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 swiftly relate the elements of marketing to the strengths of their own organisations, and by doing so could very quickly create a tailored and effective marketing system.

Marketing is a worldwide business idea which could get carried out on conferences as well as any amount of other products and services. See our website here.

Product

Although every element of the marketing mix is a requirement, 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 business 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 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 established brands of both operating system as well as software application solutions in the marketplace already, and because the market is fairly well saturated it would be incredibly tough (and expensive) to “take on the big boys”.

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 avoid business dead-ends at a later time.

Once your products 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 pie.

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 customers as possible. Once again, this method can be applied at all stages of product development.

The car industry uses this technique very effectively by offering different engines, trim packages and interior options with the cars that they sell. They use the marketing mix to good effect to sell their own products in an extremely competitive marketplace.

As part of our own promotion strategy, our business very carefully researched what made our goods stand out from the crowd.

One of the most recent forms of promotional marketing is by means of websites which provide versatile and accessible means to target potential consumersOur website is at www.rostrum.eu .

Price

Another important factor in the marketing mix concerns 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 useful tool to use), but rather making use of the price of your products as a strategic tool designed to achieve any particular objectives your business has. The potential advantages of an effective pricing strategy are surprisingly substantial!

Whilst it may seem obvious, it’s 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 don’t 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 strategy, key among which are the price sensitivity of your customers, what your competitors 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 also penetration pricing.

Price skimming

The principal idea driving price skimming is to make as much money as possible from the segment of the market which is price-insensitive and will be prepared to spend a premium 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 launch 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. By making use of this method as part of a pre-ordering strategy, a firm can help to smooth its own money flow.

Penetration pricing

Penetration pricing is at the opposite 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 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. When establishing a price for penetration it is still essential to not give a poor impression of your product by aiming for too low a number.

Another thing to keep 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 produce or undertake. So it is even more vital to get your pricing technique right.

Our company wanted to appeal to a wider market and focusing on become a singer helped increase our visibility within the international business community.

Place

Place is the portion of the marketing mix that’s often disregarded by companies, but it is still a significant part of selling your product effectively. In short, it describes the way in which you deliver your product to your consumer, and consequently how you receive money from them. It can be a fantastic marketing approach when used correctly.

The most common implications of place-based marketing are the physical locations in which your goods are sold. For the majority of consumer products, this includes the distribution infrastructure between your manufacturing plants and retailers and other outlets around the world. Since distribution of a physical product costs money it is crucial to determine your own priorities and adapt your distribution network appropriately. This is the main use of this element of the marketing mix.

With the increasing use of the Internet by your prospective customers, marketing techniques have had to consider how they use the Internet to help distribute their products. By using the Internet as a point of contact (or even as a complete distribution route 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 deliver impressive financial results.

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 only one branch of a more complete system. Promotion can be employed on a very individual basis or as a mass communication instrument, and whilst it might be a costly undertaking it is often an essential one. The key concern of promotion is to deliver a certain message that will boost sales.

Advertising is one of the most common 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 buyers. With the arrival of the information age we have seen 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 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 Practice

As previously mentioned each business is unique and will have different marketing requirements. By using a balance of the four P’s discussed above you can take an effective view of your own marketing plan.