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Basics of Marketing The success of most businesses rests on production and marketing: the product must be good and the marketing plan must be well-organized and effective. Marketing.
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Basics of MarketingThe success of most businesses rests on production and marketing: the product must be good and the marketing plan must be well-organized and effective.
Marketing Marketing encompasses more than just selling. In fact, marketing includes every stage of getting a product or service to the customer: selling, quality control, location of operations, pricing policies, promotion, advertising, and organizing channels of distribution. Good marketing plans are built around the characteristics of a product’s target customers which are: • Gender • Age group • Economic condition • Location • Anything else that might affect their reactions to the product
Defining the business • In order to create an effective marketing plan, a business’ overall goals must be clearly understood. A well-planned marketing strategy should be based on clear answers to the following questions: • What product or service is being sold? • How does the product or service benefit the buyer? • Is the business mainly a manufacturing concern, a retailer, a wholesaler, or a distributor? • How large is the business now? Will it get any larger? • Will the business begin in a single location or in multiple locations? • Entrepreneurs must have a thorough understanding of both their product or service and their business goals in order to communicate effectively with their customers.
Marketing Strategy (Marketing Mix) Entrepreneurs use marketing strategies to show how their products are distinctly different from their competitor’s products. Most marketing experts use a comprehensive strategy that consists of the 4 “P’s” of Marketing: • Product • Place • Price • Promotion
Product Product means more than just the goods or service being sold. The product includes such things as packaging, presentation of goods or services, and any warranty and service options that might be included with the purchase. Every aspect of the product should appeal to the type of customer identified as the target market. Entrepreneurs must also understand that their products create a business image, and that the business image, in turn, has an effect on the buying decisions of the target market.
Place Place includes all of the methods used to get a product or service into the hands of the customer. In the case of a retail operation, place simply refers to the site of the retail outlet or store. For a manufacturer, however, place refers to all the modes of transportation used to deliver manufactured goods. For the manufacturer the issue of place or location includes deciding whether products should be sold directly to the customer or through a retailer or wholesaler. Like all marketing decisions, the location of warehousing and shipping should be based on the nature of the business, the product or the target market. Retailers are particularly sensitive to the second “P” of marketing. There is an old saying that the three most important considerations for a retail business are location, location and location. Retailers depend on a high volume of business from passers-by; walk-in or drive-by traffic is essential to their success.
Price A simple pricing formula based on costs plus a percentage for profit is a valid way to start but price cannot always be dictated by costs. Entrepreneurs must take into consideration the prices of competing products and services. Often the marketplace – which includes the demands of the customer and the number of competing businesses – will have an important influence on the pricing of products and services. Pricing policies also affect consumer’s perception of a business; the prices of products or services position a business in the marketplace, and establish a reputation that could be very hard to change. For example, low-cost products could position a business as an inexpensive supplier that sells low-quality goods.
Promotion Promotion includes all the techniques used by a business to communicate with potential customers. The scope of promotional techniques available to entrepreneurs is extremely wide including such things as direct mail, coupons, yellow pages, etc. Each method has distinct advantages and disadvantages and the entrepreneur use of various media must be well-planned if it is to be effective. Advertising is just one of the promotional techniques used by a business to communicate with customers.
