When marketing a product you need to consider the 4 p's. Getting the mix right is essential to successfully market your product.
Marketing
Marketing is the management process that is responsible for identifying products that would be
likely to make a profit when sold and then selling these products to customers. Marketing finds
out what consumers want and then attempts to meet those needs, at a profit. It a can also be
defined as getting the right product to the right place at the right time. It is not the same as
selling- that is making people buy what you've got. Marketing is making people want what
you've got. The aim of marketing is to make selling superfluous. The aim is to know and
understand the customer so well that the product or service sells itself.
When marketing a product you need to consider the 4 p's. Getting the mix right is essential to
successfully market your product.
The four P's are:
* Product- can be a good or service. In competitive markets, businesses have to be
customer driven. They may use types of product differentiation (e.g. package design
and/or a brand name) in an attempt to convince potential customers that their good or
service is different from competitors' products.
The four types of products are:
. Star
- High share of market in the 'growth' stage of the product life-cycle.
-Requires significant injections of capital to finance the rapid growth.
-May have negative cashflows but seen as having potential for high sales, and profit.
2. Cash Cow
-High markets share, bringing in high sales revenue, cashflows and (usually) profit.
-No market growth likely.
-Product may have a personality/image in the market.
-The large amounts of cash bought in can be used to subsidise 'stars'.
3. Problem Child
-Low share of a market with high potential for growth.
-Relatively large injections of finance needed (as with 'stars').
-Uncertainty about future sales revenue, cashflow and profit.
-Decision needed on whether or not to halt production, or (if possible) to sell a brand.
4. Dog
-Not going anywhere- no growth potential.
-Any profit has to be reinvested just to maintain market share.
-Identify and remove from the product portfolio.
* Price- setting the right price for a product is a crucial aspect of marketing. There are ...
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3. Problem Child
-Low share of a market with high potential for growth.
-Relatively large injections of finance needed (as with 'stars').
-Uncertainty about future sales revenue, cashflow and profit.
-Decision needed on whether or not to halt production, or (if possible) to sell a brand.
4. Dog
-Not going anywhere- no growth potential.
-Any profit has to be reinvested just to maintain market share.
-Identify and remove from the product portfolio.
* Price- setting the right price for a product is a crucial aspect of marketing. There are
short-and long-term objectives to be considered when pricing goods or services e.g.
survival may become the priority in a recession, and imply low prices to maintain some
sales and cashflow. Economic theory assumes that a price will be determined by market
forces reaching equilibrium. The economic environment. A business may simply have to
try and match the market price/going-rate for it's products, or may have some control
over its prices.
* Place- Making goods available to users/consumers involves two main decisions:
. Method of Transport-Depends on the type of goods. There will be several factors, e.g.
most rail journeys also involving road transport, and whether a business should have its own
fleet of road vehicles.
2. Channel Of Distribution-The procedure, or 'channel management' required to get a
product to the customers. The traditional channel includes using the wholesaler, but there are
other possible channels.
* Promotion-The overall objective of promotion is ensuring the survival and the growth
of a business through an increase in long-term demand for its product(s). Selling will be
the outcome of successful promotion.
Market research is the collecting of data, the aim of which is to understand better what is
happening in the marketing place, as the marketing department of a firm needs to know about
consumer's views and economic trends.
Primary data is data you have gathered yourself, whereas secondary data is somebody else's
data you use.
Market research involves doing market research on customers, analysing their needs, and then
making strategic decisions about product design, pricing, promotion and distribution. The
purpose of market research is to provide information on particular market to those managers
responsible for the firm's marketing strategy, about what people want-a particular group of
potential customers will need to be targeted.
Data can be:
* Primary- i.e. collected for a specific purpose. It will involve either a census (of every
person in an area) or sampling (of a subset of the population).
or...
* Secondary-i.e.. Used for another purpose besides the original one. It could be internal
data (from within the organisation, e.g. employee details or costings), or external data
(e.g. from a government department, a newspaper, the TUC or the CBI).
and...
* Quantitative- i.e. in the form of numbers, e.g. showing the market share of different
businesses, or the number of adults who will have seen a particular advertisement on
television.
or...
* Qualitative- i.e. without, e.g. giving the motives for customers buying, or not buying, a
particular product.
In most cases market research will involve choosing a sample to represent the whole target
group. The larger the sample, the more accurate the results will be, but costs will also be
greater- a full national census costs millions of pounds, e.g.
Random sampling is where every member of the target group/population has an equal chance
of being chosen to provide responses. Computers might do the random selection.
Systematic sampling involves selecting, for example, every 10th item or person from a list of
the target group.
Stratified sampling identifies distinguishable subgroups in the total group, then a certain
number of members of each subgroup are chosen (at random).
Cluster sampling involves selecting a geographical area, and then all the members of that local
group/population are sampled, e.g. a sample of small retailers in a particular town.
Field or primary research is when new data is obtained for a specific purpose, this can be
provided by the marketing department of a firm. Data is usually gathered by surveys, (face-to-
face, telephone, or by post). An advantage of field research is that the firm can have control
over the whole process, and it can be more effective, but it does take longer and will cost the
firm more.
Desk or secondary research is the use of existing, already collected data. This could be anything
from department of trade and industry reports to a company's sale statistics. Also company
reports, government statistics, and surveys published by research organisations can be used as
secondary sources of information. Desk research is quicker and cheaper than field research, but
findings are not necessarily accurate or always relevant to your product.
Marketing principles, there are many priorities within an organisation, but if it is truly
marketing oriented, many of the following principles will be high on its agenda.
Market research must establish whether customers' expectations are satisfied by current
products or services. Anticipating the future and forecasting tomorrow's customer needs and
expectations is the task of marketing research. This is very vital. Generating income or profit
clearly states that the need of the organisation is either to be profitable or to generate as much
income as possible e.g. like a charity. Satisfactory growth can be achieved by entering new
markets or creating a new product or both. Having a clear plan is essential for an organisation.
The whole emphasis of the planning process is for the organisation to 'think customer' and 'think
marketing'. The PEST analysis examines changes in a market place caused by political,
economic, technological factors. Any organisation unaware of what is going on in the business
world will risk being outmanoeuvred. Changes in the law will add to uncertainties. Statue law
like the consumer protection law, and the voluntary agreements like the monitoring of advertising
standards authority. Clearly understanding who the competition is and what benefits they are
offering is essential for an organisation.
Principles can be arranged into three categories:
* Needs of the customer
* Needs of the organisation
* Influence of the market
