Posted by Do you find yourself spending vast amounts of time and money on marketing only to find that your efforts have been practically wasted and you have no new business to show for it? You are not alone – this situation is common amongst small business owners and entrepreneurs, actually it’s common in all types of company, even the larger ones. Successful marketing of your business depends on many factors, however, one of the key elements of any marketing plan is a correct use of the “Marketing Mix”.
So what exactly is the “Marketing Mix”? It is often referred to as the “4 P’s” and is split in to the following four elements:
Product
Price
Place
Promotion
Your Marketing Plan and ultimately its’ success will depend on the correct use of these four elements. You may need to add new products – or services – modify existing ones. You may need to change Pricing, the place of sale or the promotional methods used. Its all about finding the right balance between the “4 P’s” as modifying one of the elements will have an effect on the others. Let’s start with a brief explanation of each of the elements.
Product
What product or service are you going to sell? What specific features will it have? How will you Brand it? What type of packaging will you use? Will you offer any guarantees or warranties? What added services will you offer? Will it be a high quality product or service? These are just some of the questions you will need to answer but remember to always identify what it does for your customer.
Price
The Key question here is what are you going to charge for your product or service? Are you going to offer volume discounts? What payment terms are you going to offer? What specific pricing strategy will you use? Market skimming? Market penetration?
The pricing decision can differentiate your product from the competition- a Ford Focus and a Rolls-Royce are pretty much at opposite ends of the car spectrum. The point to make here is that pricing strategy has an effect of the other elements of the mix as you will have to find different methods of distribution and different advertising channels depending on the price level you have chosen.
Place
Where are you going to sell your product? Are you going to sell exclusively in one outlet? Are you going to sell in Mass in as many outlets as possible? Are you going to sell directly or are you going to use wholesalers or retailers? Is your product more suited to Internet sales?
Promotion
Promotion includes all the advertising and selling efforts for your marketing plan. In order to pull buyers to a store or to push distribution channels to stock and sell your products, there are five general categories of promotional efforts:
Advertising – Television, Radio, Internet, Newspapers, etc
Personal Selling – This is used when you need to make direct contact with a buyer in order to personalise your message
Sales Promotions – Samples, Coupons, Refunds, etc
Public Relations – The idea is to create positive word-of-mouth about your product not directly sell it
Direct Sales – Catalogs, Internet sales, direct mail. This allows you to target your market with a focused mailing list and send a sales letter.
So let’s try and apply the above strategies to a real product as an example. We’ll keep it simple in order to highlight the main points – Rolex Watches.
Product – Exclusive watches, produced and designed to extremely high standards, well packaged in designer boxes, excellent after sales service, branded as luxury item and targeted at high net worth individuals.
Price – Pricing reflects the target market and therefore has a high price level
Place – These watches are usually only available in specialised jewellery stores or high end department stores.(ie exclusivity)
Promotion – Advertising in high quality lifestyle magazines, Television, Sponsorship of “high end” sporting events such as yachting. This is possible due to pricing strategy and margins obtained.
The brief example above is just to emphasize how each of the elements in the “Marketing Mix” affects the others and the importance of getting the right balance to ensure a successful marketing plan. You can change each of these elements and then determine whether this change improves your sales and profitability but just remember that they are all interlinked and the slightest change in one can have a profound effect on the others – your management of the marketing mix has to be a dynamic process which is constantly being tweaked in response to market forces.
If you’d like more information on small business marketing then I recommend you take a look here for an in depth and practical resource on the subject.