Marketing strategy consists of selecting a segment of the market as the company's target market and designing the proper marketing "mix" that meets the needs of that segment. Discuss how this is achieved.
The Marketing Mix is known the elements that make up the marketing process. They include:
They are also known as the 4 “P’s.” It is important for an organization to have a good understanding of the marketing mix. Each element is important when developing a marketing plan.
Price: What is the highest amount that the customer will pay for the product or service? Many times setting the incorrect price level is the beginning of the end for an organization. An organization must be sure that the price is not too high or too low. Mistakes either way will hurt the organization’s income. When an organization is starting out, it is important that they focus their price levels on breaking-even. A break-even analysis is necessary to determine the price to set to avoid a loss.
Product: What you are trying to sell to the customer. An organization needs to have an in depth understanding about what it is they are marketing. Development of the product’s size, quality, design, brand name, packaging are important when trying to match with customer’s needs and wants. An organization should explain how their product’s features benefit the customer.
Place: Where the customer meets the product. The question is how does the customer get to that place? An organization needs to make sure the product or service they are offering is in the appropriate location where its target markets can reach it. An obvious example of poor placement is developing a ski resort in Houston, TX. It is also important to look at the transportation that could be necessary to reach its customers and the geographical barriers that might exist. A B&B will not get many visitors if they have to travel on a poorly lit, gravel road.
Promotion: The method in which the customer will gain knowledge about the product and be persuaded to purchase it. There are many different types of promotional activities that can be used to help gain knowledge, exposure, and desire to purchase
Personal Propaganda: creating and distributing your own brochures, newsletters, fliers, posters.
Promotional Activities: coupons, give-aways, sponsorships of community events, trade shows.
Professional Organizations: being involved with a professional organization or association in your field.
Media Relations Campaign: a plan to develop contacts and relationships with the local media.
Advertising: Print ads (newspapers, yellow pages), Outdoor ads (Billboards), Broadcast ads (TV and radio), Direct mailings.
When planning these different activities, it is very important to estimate what they will cost and factor that into the organization’s operating budget. When working from a small budget, it is important to take advantage of all opportunities of free publicity. Having a working relationship with the local media will be very useful when trying to generate publicity. Instead of having to spend money on a print ad in the newspaper, you can have an article written about your organization for no charge. It is also important for small budget organizations to create their own personal promotions. An organization can gain exposure by wearing a T-shirt with their logo on it around town.
A recent trend focuses the marketing mix directly on the customer. Instead of the 4 “P’s”, there is the 4 “C’s.”
Customer value: how much the customer values the product.
Cost to the customer: also includes customer’s time and energy, along with price of the product.
Convenience for the buyer: similar to place.
Communication: similar to promotion.
Many organizations that offer services struggle when trying to apply the 4 “P’s” concept to their marketing plan. They are missing one of the “P’s,” product. Services are intangible, produced and consumed at the same time, rely heavily on the organization’s personnel, and the performance of personnel. Marketing services require a complete dedication to understanding the customer. Everyone on staff in the organization must have a complete understanding of the customer, a relationship with the customer. Relationship marketing is an important concept for service-based organizations, and is discussed in more depth in the Marketing Trends section.