Id like to start by saying that market is a set of condition where people (sellers and buyers) meet each other and exchange what they need – first have goods and services to offer, second money to pay for them. But in the context of this topic I would define a market as people or organizations that buy or may buy the products, or an area where they are sold.
If the companies respond quickly to the needs of a market they are usually called market-driven or market-oriented.
As we are talking about marketing, I would define this category as the process of developing, pricing distributing and promoting the goods and services that satisfy people’s needs. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself.
So marketers have to identify or anticipate a consumer need; develop a product or service that meets that need better than any competing one; persuade target customer to try the product or service; and in the long term, modify it to satisfy changes in customer needs or market condition.
In my opinion marketing is not selling. The difference between them is quite clear. The “selling concept” assumes that resisting consumers have to be persuaded to buy the existing goods. Thus products are sold rather then bought. The ”marketing concept” assumes that the producer’s task is to find wants and to fill them. In other words, you don’t sell what you make, but you make what will be bought. As satisfying existing needs, it also create new ones.
I would also say that the marketing concept rests on the importance of customers to a firm and states that:
- All company policies and activities should be aimed at satisfying customer needs
- Profitable sales volume is a better company goal then maximum sales volume.
To use the marketing concept a business should:
- Determine the needs of their customers (Market Research)
- Analyze their competitive advantages (Market Strategy);
- Select specific markets to serve [Target Marketing), and;
- Determine how to satisfy those needs [Market Mix).
Rather then making a decision on the basis of intuition and guesswork good information about the market is necessary and that is why most companies undertake market research. They collect and analyze all the info. they can get about the market: the size of a potential market, population, shifts, local development, local economic situation should also be monitored to enable early identification of problems and opportunities. They are usually based on a questionnaire given to present customers and/or prospective customers, can disclose problems and areas of dissatisfaction that can be easily remedied, or new products or services that could be offered successfully. Moreover marketing information can be got by simply by observing things around them. They can visit competing stores to check on facilities and prices. They can evaluate their customer mix by recording how many and what kinds of customers shop in the store at different times. Competitor advertising can be monitored by collecting ads. from local media.
Telephone interviewing is one of the best methods for gathering information quickly, and it provides greater flexibility than mail questionnaires. Interviewers can explain questions that are not understood. Depending on the respondent’s answers, they can skip some questions or probe further on others.
But telephone interviewing also has drawbacks. The cost per respondent is higher than with mail questionnaires, and people may not want to discuss personal questions with an interviewer. The way a interviewer talks, small differences in how they ask questions, and other differences may affect respondents’ answers. Finally under time pressures some interviewers might even cheat by recording answers without asking questions.
After this we gonna realize what type of product or a service we wonna produce and who will be our customers. Concentrating their marketing efforts on one or a few key market segments is the basis of target marketing. Every market can be divided into segments, or in other words, into separate groups of consumers. The major ways to segment a market are:
- Geographical segmentation – specializing in serving the needs of a customer in a particular geographical area.
- Customer segmentation —identifying and promoting to those groups of people most likely to buy the product. In other words, selling to the heavy users before trying to develop new users.
As for the factors we think about they are usually – demographic, like age, income, educational background, occupation, size of a family, type of home and neighborhood and so on, and psychographic – consumer’s opinions and interests, hobbies and some others.
Then a product is compared with the goods already established in the market by quality and quantity standards. To be a access you must be ahead of your competitors.
Competition never stops. That is why market segmentation must never stop as well. It should be on a permanent basis.
Once a target market has been identified, a company has to think about so-called market opportunities – has to decide what goods or service to offer. This means that much of the work of marketing has been done before the final product or service comes into existence. It also means that the marketing concept has to be understood throughout the company, e.g. in the production department of a manufacturing company as much as in the marketing department itself.
Lets go further. Now we need to understand what type of a marketing strategy to use. If a firm wants to be a success it should tailor its product offerings, prices, distribution, promotional efforts and services towards their particular market segment. The best situation is when the strategy addresses customer need which currently are not being met in the marketplace and which represent proportional size and profitability.
- As for our plans for the future, company marketing strategies often address long-run activities. But the managers who implement these strategies are usually rewarded for short-run sales. And to avoid some misunderstanding many companies are taking steps to attain a better balance between short and long-run goals. They are making managers more aware of strategic goals, evaluating managers on both long-run and short-run performance, and rewarding managers for reaching long-run objectives. Some marketing plans are poorly implemented because the planners fail to make detailed implementation plans. Thus, people at all levels of the marketing system must work together to implement marketing plans and strategies.
But let me tell you that before we start choosing a strategy we need to understand quite good what kind of SBU our firm or company is. SBU – strategic business unit – a product, a product line, a division, a department or an organization. And usually we can distinguish between:
Stars. An SBU that has a high share of a high-growth market. Obviously, stars need great deal of financial resources because of their rapid growth. When growth slows, they become cash cows and become important generators of cash for the organization.
Cash cows. An SBU that has a high share of a low-growth market. They produce a great amount of cash for the organization but, since the market is not growing, do not require a great amount of financial resources for growth and expansion. As result, the cash they generate can be used by the organisation to satisfy current dept and to support SBUs in need of cash.
Question marks. When an SBU has a low share of a high-growth marked the organisation must decide whether to spend more financial resources to build it into a star, or to phase it down or eliminate it al together.
Cash traps or dogs. When an SBU has a low-growth market, it may generate enough cash to maintain itself, or it may drain money from other SBUs. The only certainty is that, cash traps are not great sources of cash.
Thus, depending on whether the SBUs are products, product lines, entire divisions, or departments, an organisation may have one star, three cash cows, two question marks, and two cash tarps. After classifying each SBU according to the business portfolio matrix, management must then decide which of the four alternative strategies should be pursued for each:
- Build. If an organisation has an SBU that it believes has the potential to be a star (probably a question mark at present), this would be an appropriate objective. Thus, the organisation may even decide to give up short-term profits to provide the necessary financial resources to achieve this objective.
- Hold. If an SBU is a very successful cash cow, a key objective would certainly be to hold or preserve the market share so that the organisation can take advantage of the very positive cash flow.
- Harvest. This objective is appropriate for all SBUs except those classified as stars. The basic objective is to increase the short-term cash return without too much concern for the long-run impact. It is especially worthwhile when more cash is needed for a cash cow whose long-run prospects are not good because of a low market growth rate.
- Divest. Getting rid of SBUs with low shares of low-growth markets is often appropriate. Question marks and cash traps are particularly suited for this objective.
SBUs change position in the business portfolio matrix. As time passes, question marks may become stars, stars may become cash flows, and cash cows may become cash traps.
- Ok, lets keep on going. Once the basic offer e.g. a product concept, has been established, the company has to think about the marketing mix, i.e. all the various elements of a marketing programme, their integration, and the amount of effort that a company can expend on them in order to influence the target market. The best-known classification of these elements is the ‘4 Ps’: product, place, promotion and price.
Aspects to be considered in marketing products include quality, features (standard and optional), style, brand name, size, packaging, services and guarantee.
Place in a marketing mix includes such factors as distribution channels, locations of points of sale, transport, inventory size, etc.
Promotion groups together advertising, publicity, sales promotion, and personal selling.
Price includes the basic list price, discounts, the length of the payment period, possible credit terms, and so on. In setting price, the goal should be to maximize profit. The ingredients of profit are, costs, selling price and the unit sales volume and they must be in a proper proportions if the desired profit is to be obtained.
The “best” price for a product is not necessarily the price that will sell the most units. The “best” selling price should be cost oriented and-market oriented. It should be high enough to cover your costs and help you to make a profit. In determining the best selling price, think of four elements:
- direct costs;
- manufacturing overhead;
- non- manufacturing overhead ;
To make a long story short, it is the job of a product manager or a brand manager to look for ways to increase sales by changing the marketing mix.
And at the end of my story I feel like saying a few words about producers and consumers markers. Few consumers realize that the producer market is actually lager then the consumer market, since it contains all the raw materials, manufactured parts and components that go into consumer goods, plus capital equipment such as buildings and machines, supplies such as energy and pens and paper, and services ranging from cleaning to management consulting, all of which have to be marketed. There is consequently more industrial than consumer marketing, even though ordinary consumers are seldom exposed to it.
Source by Michael Newman