MARKETING
1. The Four P's
Buying, selling, market research, transportation, storage, advertising – these are all part of the complex area of business known as marketing. In simple terms, marketing means the movement of goods and services from manufacturer to customer in order to satisfy the customer and to achieve the company’s objectives. Marketing can be divided into four main elements that are popularly known as the four P’s:1 product, price, placement and promotion. Each one plays a vital role in the success or failure of the marketing operation.
The product element of marketing refers to the good or service that a company wants to sell. This often involves research and development (R&D) of a new product, research of the potential market, testing of the product to insurequality, and then introduction to the market.
A company next considers the price to charge for each product. There are three pricing options the company may take: above, with, or below the prices that its competitors are charging. For example, if the average price of a pair of women’s leather shoes is $ 27, a company that charges $ 23 has priced below the market; a company that charges $ 27 has priced with the market; and a company that charges $ 33 has priced above the market. Most companies price with the market and sell their goods or services for average prices established by major producers in the industry. The producers who establish these prices are known as price leaders.
The third element of the marketing process-placement-involves getting the product to the customer. This takes place through the channels of distribution. A common channel of distribution is:
Manufacturer → wholesaler → retailer → customer.
Wholesalers generally sell large quantities of a product to retailers, and retailers usually sell smaller quantities to customers.
Finally, communication about the product takes place between buyer and seller. This communication between buyer and seller is known as promotion. There are two major ways promotion occurs: through personal selling, as in a department store; and through advertising, as in a newspaper or magazine.
The four elements of marketing → product, price, placement, and promotion – work together to develop a successful marketing operation that satisfiescustomers and achieves the company’s objectives.
2. The Target Market
The marketing strategies of determining product, price, placement, and promotion are not planned in isolation. Marketing analysts often look at a combination of these four factors. This combination of the four P’s is known as the marketing mix. The elements of the marketing mix focus on the customer. In order to develop a successful marketing mix, researchers first ask two important questions: Who is going to buy the product? What is the potential to sell this product?
The group of customers or consumers who will probably buy the product is known as the target market. The company directs its marketing efforts toward this group of potential customers who form the target market. Once market researchers have determined the target market they wish to appeal to, the company can develop an appropriate mix of product, price, placement, and promotion. The company attempts to match consumer need or mold consumer desires to the product being offered. For example, if the target market is “middle-class teenagers,” the marketing mix might consist of the following:
Ø Product : blue jeans
Ø Price : with the market
Ø Placement : department store
Ø Promotion : advertisement on a “pop music” radio station
A successful marketing mix depends on the knowledge about consumers and their buying habits gained through market research as well as correct identification of the target market. Strategies of product, price, placement, and promotion are blended in order to reach a chosen group of consumers.
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