"Many people think of marketing only as selling and advertising..." This is a concept that many people believe. But is it really what marketing all is about?

        In this report, we will be examining some of the most popular marketing skills required for a business to into business. Of course, there is so much about marketing, that not everything can be included. This report would merely talk about the different functions of marketing. How it can be applied in a real company, and giving examples of some of the marketing strategies used by businesses these days.

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Introduction

        To many people, marketing is only the process of promoting their products through many different ways such as advertising on television, radio and maybe banners around town. But in fact, this is the only service of what marketing really is. The concept of marketing consists of many functions and process, and in brief, marketing is defined to understand buyers’ need and wants and effectively combines marketing strategies to direct the skills and resources of the entire organization to provide high levels of satisfaction to its customers (Cravens D, 1997). In another word, marketing strategies are using different options to satisfy customers, promote the product/services and sell the ideas in an effective ways. In this report, we will be discovering the different functions of marketing and how it can be applied to businesses of all kinds in the real world. 

What is marketing?

        Marketing is an activity to enhance the flow of goods, services and ideas from producers to consumer needs and wants. Marketing strategies are using advertisements in order to satisfy customers, promote and sell the products, services or ideas in an effective ways. Everyone have their own needs, wants and demands, and in order to satisfy these unlimited desires, we would need goods and services provided to us. These needs are generally characterized into three types, and they are physical needs, such as food, warmth clothes and safety. Social needs for belonging and affection. Individual needs mainly for knowledge and self-expression (Kotler et al, 2001) Knowing the basic needs of human, marketing concept can then be applied. Marketing objectives, goals and targets have to be monitored and met, competitor’s strategies be analyzed, anticipated and exceeded. Through effective use of market and marketing research, organization should be able to identify the needs and wants of the customer and try to delivers benefits that will enhance or add to the customers lifestyle, while at the same time ensuring that the satisfaction of these needs results in a healthy turnover for the organization.

Functions of marketing

  In order to be successful in marketing, the marketing mix principles (also known as the 4 p’s) must be applied. They are used by business as tools to assist them in pursuing their objectives. The 4p’s are as follows:

Product

When an organization introduces a product into a market, they must understand the purpose of the product and who its targeting to. Kotler (2000) suggested that a product should be viewed in three levels.

Level 1: Core Product: This is the most basic level which address the question ‘what the customer is really buying?’ For example, when a customers purchase a camera, they are buying more then just a camera but also purchasing their memories.

Level 2 Actual Product: All cameras capture memories. The aim is to ensure that your potential customers purchase your one. The strategy at this level involves organizations branding, adding features and benefits to ensure that their product offers a differential advantage from their competitors.

Level 3: Augmented product: This is the section where additional non-tangible benefits should be included. Competition at this level is based around after sales service, warranties, delivery and so on.

        Besides understanding the three levels of products, many other factors and decisions have to be taken into consideration. These include:

Product design – Will the design be the selling point for the organization as we have seen with the iMAC, the new VW Beetle or the Dyson vacuum cleaner.

Product quality: Quality has to consistent with other elements of the marketing mix. A premium based pricing strategy has to reflect the quality a product offers.     

Product features: What features will you add that may increase the benefit offered to your target market? Will the organization use a discriminatory pricing policy for offering these additional benefits?

Branding: One of the most important decisions a marketing manager can make is about branding. Brands have the power of instant sales; they convey a message of confidence, quality and reliability to their target market. A brand is a tool which is used by an organization to differentiate itself from competitors.

Pricing

Pricing is one of the most important elements of the marketing mix, as it is the only mix, which generates a turnover for the organization. The other 3p’s are the variable cost for the organization. It costs to produce and design a product, it costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must reflect supply and demand relationship. Pricing a product too high or too low could mean a loss of sales for the organization. Pricing should take into account the following factors:

Fixed and variable costs; Competition; Company objectives; Proposed positioning strategies; Target group and willingness to pay. An organization can adopt a number of pricing strategies. The pricing strategies are based much on what objectives the company has set itself to achieve.

Penetration pricing: Where the organization sets a low price to increase sales and market share.

Skimming pricing: The organization sets an initial high price and then slowly lowers the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer.

Competition pricing: Setting a price in comparison with competitors.

Product Line Pricing: Pricing different products within the same product range at different price points. An example would be a video manufacturer offering different video recorders with different features at different prices. The greater the features and the benefit obtained the greater the consumer will pay. This form of price discrimination assists the company in maximizing turnover and profits.

Bundle Pricing: The organization bundles a group of products at a reduced price.

Psychological pricing: The seller here will consider the psychology of price and the positioning of price within the market place. The seller will therefore charge 99c instead $1 or $199 instead of $200

Premium pricing: The price set is high to reflect the exclusiveness of the product. An example of products using this strategy would be Harrods, first class airline services, Porsche etc.

Optional pricing: The organization sells optional extras along with the product to maximize its turnover. This strategy is used commonly within the car industry.

Place

Place strategies Refers to how an organization will distribute the product or service they are offering to the end user. The organization must distribute the product to the user at the right place at the right time. Efficient and effective distribution is important if the organization is to meet its overall marketing objectives. If organization underestimate demand and customers cannot purchase products because of it profitability will be affected. Two types of channel of distribution methods are available. Indirect distribution involves distributing your product by the use of an intermediary. Direct distribution involves distributing direct from a manufacturer to the consumer.

        Depending on the type of product being distributed there are three common distribution strategies available:

1. Intensive distribution: Used commonly to distribute low priced or impulse purchase products e.g. chocolates, soft drinks. 

2. Exclusive distribution: Involves limiting distribution to a single outlet. The product is usually highly priced, and requires the intermediary to place much detail in its sell. An example of would be the sale of vehicles through exclusive dealers.

3. Selective Distribution: A small number of retail outlets are chosen to distribute the product. Selective distribution is common with products such as computers, televisions household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread.

Promotion

A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organizations promotional strategy are usually done through advertising, public relations, sales promotion, personal selling and direct mails. An effective communication campaign should comprise of a well thought out message strategy. What message are you trying to put across to your target audience and how you deliver that message is very important. The message should reinforce the benefit of the product and should also help the company in developing the positioning strategy of the product. Companies with effective message strategies include:

Nike: Just do it.

Toyota: The car in front is a Toyota.

Promotions can be applied differently at different stages of a product life. Below is a graph of what we call a product lifecycle.

 

        As products move through the four stages of the product lifecycle, different promotional strategies should be employed at these stages to ensure the healthy success and life of the product .

Introduction - When a product is new the organizations objective will be to inform the target audience of its entry. Television, radio, magazine, coupons etc may be used to push the product through the introduction stage of the lifecycle.

Growth - As the product becomes accepted by the target market the organization at this stage of the lifecycle the organization works on the strategy of further increasing brand awareness to encourage loyalty.

Maturity - At this stage with increased competition the organization take persuasive tactics to encourage the consumers to purchase their product over their rivals. Any differential advantage will be clearly communicated to the target audience to inform of their benefit over their competitors.

Decline - As the product reaches the decline stage the organization will use the strategy of reminding people of the product to slow the inevitable.

 Conclusion

        Now that having understand the many functions of marketing, it is really hard for anyone to say that marketing is only about selling and advertising. Having recognize the 4p’s and all other information discussed in this report are still the very service of marketing. The concept of marketing are very wide and can be explore in dept. But knowing these basics skills would definitely helped your business improve. Going into business without these knowledge, its like a person lost in desert without a map, not knowing the direction. Marketing concepts would definitely help a business in setting their goal, know the product better and most importantly, satisfy the customers needs and wants.

        In marketing, all concepts are interrelated. There’s no such thing as which function is more important. In order to be successful in a business, all concepts should be seen and applied equally weighted. There is no point for a business to concentrate on the product for example, package the product into a fancy item, and on the other hand, neglect the importance concept of pricing, charging at an unreasonable price. This would not only result in disaster for that particular product line, but also damage the image of the company. A classic example would be the One. Tel Limited. The company started off from scratch a few years ago, while their goal was to raise their market share, they concentrated in pricing in order to be competitive. They made deals such as giving free talk to customers that had connected with them. For a moment, this strategy interested many customers to join. But after running for two years, the company found that they weren’t making profit and declared bankrupt. This is an example of a business that concentrated in one function and neglecting others.                         

        To be successful in business, marketing is something must be considered and planned before taking actions.    

References

1) Czinkota M et al, Marketing Best Practices, The Dryden Press (2000)

2) Rix P & Stanton W, Marketing: A practical Approach 3rd Edition, McGraw-Hill  

  Companies, Inc. 1988

3) Diamond J, Principals of Marketing, Englewood Cliffs, Prentice Hall 1972

4) Armstrong G et al, Marketing an Introduction 4th Edition, Prentice Hall International Inc. 1997

5) Kotler P., Adam S., Brown L., and Armstrong G., Principles of Marketing, Prentice Hall, 2001.

6) Lynn R, Marketing Principals and Marketing Action, McGraw-Hill Companies, Inc. 1969

7) Cravens D, Strategic Marketing, the McGraw-Hill Companies, Inc. 1997