ESSENTIALS OF MARKETING
What is marketing?Marketing is the process responsible for identifying, anticipatingand satisfying customer requirements profitably.
What is the marketing mix'?The marketing mix is made up of four components, sometimes called the four Ps. These are:
1. Product: the firm has to identify what products the consumer wants and the way existing products can be adaptedto meetconsumer preferencesmore successfully,
2. Price: a firm has to decide on its pricing policyfor list prices, discountfor bulk-buyingand interest-freecredit, A low price may make consumers suspicious ('cheap andnasty') or the low price may be thought of as a bargain ('cheap and cheerful').If the price of the product is too high then the company may be pricing itself out of the market. If the price of the product is higher than what competitors are charging then it must be justified in some way, e.g. because the quality of the product is higher.
3. Promotion: this amounts to choosing methods that can generate sales of the product. Possibilities here include advertising, personal selling, publicity and other promotional work.
4. Place: the product has to be in the correct place - retail outlet - in order to capture sales. Exactly where a firm decides to sell its product will depend on the nature of the product.
Aspects to be considered in marketing a product include its quality, its features, style, brand name, size, packaging, Services and guarantee, while price includes consideration of things like the basic list price, discounts, the length of the payment period, and possible credit terms. Place in a marketing mix includes such factors as distribution channels, coverage of the market, locations of points of sale, inventory size, and so on. Promotion groups together advertising, publicity, sales promotion, and personal selling. The next stage is to create long-term demand, perhaps by modifying particular features of the product to satisfy changes in consumer needs or market conditions. The marketing task is to manage demand effectively.
It is quite noticeable that the marketing mix differs according to the type of product that is being sold. The fact that the term 'mix' is used implies that the four Ps - product, price, promotion and place - can be combined in different ways. One important factor that affects the marketing mix is the position of the product in its life cycle.
The period of time over which a product appeals to customers is called the product life cycle. At a given point in time a product will be at a particular stage of its life cycle. The length of this product life cycle differs from product to product, e.g. the life cycle of certain items such as clothing (flared or drainpipe trousers) and pop records may be very short indeed, perhaps a matter of months, or a few years at the outside. Other products, particularly consumer durable products such as telephones and colour TVs, may have a much longer product life cycle.
Before a product is introduced it generally has to be tested on a sample of consumers. The product's introduction may be accompanied by a blaze of publicity, heavy advertising and promotional work, e.g. the launch of a new car typically involves large amounts of advertising to inform the consumer of its existence and features. A lot of new cars are first introduced at a prestigious motor show.
In the introductory phase the sales of the product tend to be low and sluggish, and the price of the product may be higher than it will be at later stages in the product life cycle due to the lackof competition and because the firm is trying to get back some of the costs of developing and launchingthe product.
What is SWOT? SWOT stands for strengths, weaknesses, opportunitiesand threats.A company that believes in marketing is forward-thinkingand doesn't rest on its past achievements.It uses SWOT analysisto be aware of its strengths and weaknesses as well as the opportunities and threats it faces in the market.
Consequently, marketing is the process of developing, pricing, distributingand promoting the goods or services thatsatisfy customers' needs. Marketing therefore combines market research, new product development, distribution, advertising, promotion, product improvement,and so on. According tothis definition, marketing begins and ends with the customer. Truly successful marketing understands the customer so well that the product or service satisfies a need so perfectly that the customer is desperate to buy it. The product almost sells itself. Of course this will only happen if the product or service is better than those of competitors.