Marketing

I

Introduction

Marketing, process of identifying, anticipating, and satisfying customer requirements for consumer goods or services. Early marketing techniques involved little more than making potential consumers aware of a product’s existence and benefits, and getting it to the market. Now, however, the marketing process starts even before decisions are taken about what products should be made.

Marketing concentrates on the buyers, or consumers, determining their needs and desires, educating them with regard to the availability of products and to important product features, developing strategies to persuade them to buy, enhancing their satisfaction with a purchase, and, finally, building trust and long-term relationships with them where appropriate. Marketing also looks to create successful brands to which customers are attracted and remain “loyal”. Strong brands are increasingly important for businesses, as long-term relationships with consumers generate greater profits.

Marketing management includes researching, planning, organizing, directing, and controlling decision-making regarding product lines, pricing, promotion, and servicing. In most of these areas, the marketing department has complete control; in others, as in product-line development, its function is primarily advisory. In addition, the marketing department of a business is responsible for the physical distribution of the products, determining the channels that will be used, and supervising the efficient flow of goods from the factory or warehouse.

II

Tailoring the Product

Merchandise generally similar in appearance, that is, in style or design, but varying in such elements as size, price, and quality is collectively known as a product line. Product lines must be planned according to consumer needs and wants.

In order to develop a line effectively, market research is conducted to study consumer behaviour. Changing attitudes and modes of living directly affect the demand for products. For example, greater awareness of the importance of eating healthily has led to a decline in demand for foods such as crisps and chocolate bars.

Also, a high-income economy triggers a demand for products very different from those selected in a declining business cycle. The availability or lack of disposable income, meaning income over and above that spent for basic necessities such as food, shelter, and clothing, affects the buying pattern for so-called luxury products. Similarly, the purchase of durable or long-lived goods, such as refrigerators, cars, and houses, may be deferred when the economy is declining and may increase rapidly in periods of prosperity. Staple products, such as food and clothing, tend not to be seriously affected by the business cycle.

The life cycles of products require careful study. Virtually all product ideas lose in time the attraction that initially drew people to buy them. Technological changes can speed up this process, as some producers of video cassette recorders and 35-mm film cameras have found. Manufacturers may also accelerate the obsolescence of a product by introducing new, more desirable products or versions of the existing product. Consumers today expect product innovations and tend to react favourably to new features. This has an important bearing on the usable life deliberately designed into a product, which in turn has a significant effect on the costs to the manufacturer and ultimately on the price to the consumer. Competition between manufacturers of similar products naturally accelerates the speed of changes made in those products.

III

Pricing the Product

The two basic components that affect product pricing are costs of manufacture and competition in selling. It is unprofitable to sell a product below the manufacturer’s production costs and unfeasible to sell it at a price higher than that at which comparable merchandise is being offered.

Other variables also affect pricing. Company pricing policy may require a minimum profit on new product lines or a specified return on investments, or discounts may be offered on purchases in quantity. Pricing is also affected by the image the company wants to create in consumers’ minds. Companies such as ASDA Wal-Mart or Primark purposefully set their prices low as they seek to attract those customers looking for a bargain or value for money. In contrast, companies at the top end of the market are more likely to deliberately charge higher prices, to emphasize their high quality or exclusivity.

Attempts to fix resale prices normally violate competition laws, which usually prohibit manufacturers from controlling the prices set by wholesalers and retailers. Such control can still be maintained, however, if the manufacturers market directly through their own outlets.

Attempts have also been made, generally at government insistence, to maintain product-price competition in order to minimize the danger of injuring small businesses. Therefore, pricing decisions are reviewed by the legal department of the marketing organization.

IV

Promoting the Product

Advertising, personal (face-to-face) selling, sales promotion, direct marketing, and public relations are all techniques that can be used to persuade people or organizations to buy.