The most important element of the mix is the product. Good marketing means developing products that fit the market. It needs to be designed to meet requirements of the target market, which is probably achieved by extensive market research. The design must keep pace with market changes.
Once the product has been chosen, the other elements of the mix become clear:
The price must be suited to the target market and to the image of the product
The promotion must be through the media that the target market watch or read
The place should be the shops visited by the target market
The place is the only element that is outside the company’s control, as obtaining shop distribution is a very difficult task. Retailers have limited shelf space, so in order to gain distribution, another product will probably have to be removed from the shelves.
The effectiveness of marketing activity is constrained by the budget available.
Industrial Markets: This is when one business is supplying another.
Businesses purchase the products from another business to produce their own products for the market. The product may have exact specifications agreed with the customer (less scope for modifying the product).
Consumer Markets: The consumer market supplies the final consumer. These products fall into three categories:
Convenience goods – These are non-durable products that are bought frequently and are consumed when used such as bread. They often carry a low profit margin.
Shopping goods – These are durable products that are purchased occasionally such as televisions and washing machines. They often carry a very high profit margin.
Speciality goods – These are very expensive items that consumers often spend a large amount of time deliberating over, due to the large investment required to purchase the product. Examples are cars and houses.
It is a much larger and more complex market. In order to understand the market, businesses look at:
- Buying habits – most purchases fall into two categories; convenience goods, which are consumed when used and shopping goods.
- The type of consumer – which are categorised into several ways; spending power, age and gender.
There are differences in customers and buying habits within each market, which are known as market segments. Each segment requires its own marketing mix.
A product can be a good (shampoo), service (hairdressing), place (tourist destination) or person (pop star). A product does something for the customer. Products provide both tangible and intangible benefits.
