The marketing concept

The marketing concept THE CUSTOMER PROMOTION Market analysis Market research PLACE Planning and development PRICE PRODUCT

In the past all markets were product-orientated.(Commodity markets are still product-orientated as its the quality that matters).Nowadays markets are market-focused or customer-focused: What do people need or want? What do they prefer? How much are they prepared to buy? • Market analysis • Marketing experts divide the population into different categories called market segments. • These are usually different socio-economic groups; but then the same group can be divided again according to age, sex, household composition, geographical location, ethnic group. • Then they target a particular product or service in relation to the chosen segment, since it influencesthe nature of the product, its price, its distribution and its promotion.

Market research • It’s the actual study of the target market characteristics. • Methods: • Primary research or Field research – through internet, phone calls, mail and questionnaires surveys, or even face-to-face interviews.Field research provides up-to-date relevant and specific information but it’s expensive, time-consuming and needs a large sample group. • Secondary research or Desk research – through existing data such as sales figures, statistics and market reports. Desk research is cheaper and quicker, but data may be less relevant or not specific, or even outdated. • New technologies, mainly computer based or better Internet based, are being exploited i.e. through Internet sampling; but there are also sites that sell market research reports.

Planning and development • Objectives and strategies

The product life cycle • The stages through which a product passes from its launch on the market until its final withdrawal, is called the product life cycle. • A product life cycle may last a few months or many years.

The marketing concept THE CUSTOMER PROMOTION Market analysis Market research PLACE THE MARKETING MIX Planning and development PRICE PRODUCT

The marketing mixIn the perfect mix the product has the right design and quality and compares well with competitors;the price is attractive and competitive;the promotion is effective with successful advertising;The distribution brings the product to the right place at the right time. • If the target segment changes, a new planning and a new marketing mix will have to be altered as a consequence. THE BOSTON MATRIX

THE PRODUCT It’s the most important factor of the mix and the basis of the whole process. Each product has features that can distinguish it from similar products. To brand a product is one of the most common ways to make a product unique, as a brand is a trade mark that can only be used by the firm that registers it; it can also improve customers’ loyalty. THE PRODUCT THE PRICE It depends on internal factors – costs of production – and on externalfactors – the price of competing products. In the past: the cost-plus pricing method was applied, therefore prices were settled by adding a profit mark-up to the cost of production. Today: market-led pricing strategies are applied, which take into account supply and demand principles, the state of the economy and competition THE PRICE

PLACE It regards the distribution of the product. There are four main channels of distribution: Directly to the consumer – higher profits and closer contact with customers (e-commerce is a modern example); To a wholesaler who may sell directly to the consumer – Free storing of the goods, the wholesaler bears the risk of not selling the goods, free promotion (smaller producers); To a wholesaler who may sell the product to a retailer – The goods are distributed widely, free transport (small shops); To a retailer – It’s popular with large chains, but also with luxury products. PLACE

PROMOTION • PROMOTION • It’s how a business draws attention to itself and its products. • Advertising: • To launch a product • To improve the company image • To promote existing products • To attract new customers • To increase market shares • Advertising media – The television and the radio are popular advertising media as they can reach millions of potential customers (very expensive to make and to broadcast, but can reach mass consumers); • Online advertising (less expensive; they are effective but can be ignored because of high competition); • National or local newspapers, periodicals and magazines (less expensive, but static, silent and sometimes not coloured).

The marketing concept