Product, Price, Place & Promotion

Almost every company 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. This fundamental principle 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 genuinely unique and cannot be supplied by anybody else. This means that your business will be competing with other businesses that sell a similar item and you will both be trying to earn money from the same customers, who only want to spend their money once.

Marketing is the main 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 affected by a great deal of internal and external factors, but when done well it can be the one business practice that can make or break a corporation.

So where should you begin when constructing a marketing strategy for your own business? Well, every situation is different, and every industry will have its own set of advantages 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.

The Marketing Mix

The marketing mix was a phrase that was first coined during 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 simple, blunt-edged business technique, but rather a delicate balance of different aspects of business operations.

The term was later developed to include the concept 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 swiftly relate the elements of marketing to the strengths of their own companies, and by doing so could very quickly form a tailored and effective marketing strategy.

Our company has grown to be a leader for energy from waste services since employing customised marketing ideas across our entire range of offerings.

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. If this part is not correctly managed then your company will find it hard to survive.

Several people don’t think that marketing has any place to play when it comes to the physical product that your company is selling. In fact, the common train of thought very often bears the precise opposite sentiment. Surely it should be the other 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? This is not necessarily the case.

Consider the computer software market as an example. There are many well-known brands of both operating system and software application solutions on the marketplace already, and since the market is fairly 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 circumstance?

Rather than creating an operating system and then attempting to craft a marketing strategy to take on the likes of Microsoft or Apple, it would be more effective to look at what sorts of product are desired in the current marketplace, and how viable it would be to produce and sell them.

Once your products have been fashioned and created it is still a vital skill to be able to objectively review your own products to identify 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 cake.

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 already in the market, or to make your new product attractive to as many consumers as possible.

The motor 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 good effect to sell their own goods in an extremely competitive marketplace.Although these companies may have substantial marketing budgets, the same concepts can be applied to all businesses.}

“Product is paramount” is one of the mottos used in our food waste business and aims to remind all staff that we expect high quality production.

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 figure out the top price that your customers would pay (although that can be a handy tool to use), but rather using the price of your products as a strategic weapon designed to achieve any particular targets your company has. The potential benefits of an effective pricing strategy are surprisingly substantial!

Although it may seem obvious, it is still worth noting that price has always been, and probably always will be, one of the key factors that shoppers take into account when they are making a purchase. It is also worth noting that customers don’t constantly consider the lowest price to be the best price. In fact a price that is too low can sometimes turn customers away.

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 though, pricing can be covered by two main principals; price skimming and also penetration pricing. These are outlined below.

Price skimming

The principal idea driving price skimming is to make as much money as possible from the sector of the market which is price-insensitive and will 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 launch 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 base of customers that would pay it. By using this method as part of a pre-ordering strategy, a company 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 financial benefits can be earned 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.

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 create or undertake.

To optimize our web site for google visibility we selected waste for an aimed key phrase since it relates to our company and what we do.

Place

Place is the part of the marketing mix that is often disregarded by companies, but it is still a significant part of selling your product effectively. In a nutshell, it describes the way in which you provide your product to your consumer, and consequently how you collect money from them. It can be a great marketing technique when used correctly.

The most common implications of place-based marketing are the physical venues in which your products are sold. For the majority of consumer products, this includes the distribution infrastructure between your manufacturing centres and retailers or other outlets around the country. Since distribution of a physical product costs money it is crucial to determine your own priorities and modify your distribution network accordingly.

With the growing use of the Internet by your prospective customers, marketing strategies have had to consider how they use the Internet to help deliver their products. By using the Internet as a point of contact (or even as a whole distribution route in download-based markets such as MP3s) firms are now able to reach out to a large pool of possible customers. Effective positioning of your product or service can therefore yield impressive economic results.

Promotion

When you mention 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 used on a very individual basis or as a mass communication tool, and whilst it might be an expensive undertaking it is often an essential one.

Advertising is one of the most common 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 arrival of the information age we have seen a great increase in promotion via e-mail and the Internet, or just as targeted advertising materials posted through your door.

Another important part of promotion involves branding, which will 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 company 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 plan.

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