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Basics of Marketing
The success of most businesses rests on production and marketing: the product
must be good and the marketing plan must be well-organized and effective.
Marketing encompasses more than just selling. In fact, marketing includes every
stage of getting a product or service to the customer: selling, quality control, location of
operations, pricing policies, promotion, advertising, and organizing channels of
distribution. Good marketing plans are built around the characteristics of a product’s
target customers which are:
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Gender
Age group
Economic condition
Location
Anything else that might affect their reactions to the product
Defining the business
In order to create an effective marketing plan, a business’ overall goals must be clearly
understood. A well-planned marketing strategy should be based on clear answers to the
following questions:
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What product or service is being sold?
How does the product or service benefit the buyer?
Is the business mainly a manufacturing concern, a retailer, a wholesaler, or a
distributor?
How large is the business now? Will it get any larger?
Will the business begin in a single location or in multiple locations?
Entrepreneurs must have a thorough understanding of both their product or service and
their business goals in order to communicate effectively with their customers.
Marketing Strategy
Entrepreneurs use marketing strategies to show how their products are distinctly
different from their competitor’s products. Most marketing experts use a comprehensive
strategy that consists of the 4 “P’s” of Marketing:
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Product
Place
Price
Promotion
Product
Product means more than just the goods or service being sold. The product
includes such things as packaging, presentation of goods or services, and any warranty
and service options that might be included with the purchase. Every aspect of the
product should appeal to the type of customer identified as the target market.
Entrepreneurs must also understand that their products create a business image, and
that the business image, in turn, has an effect on the buying decisions of the target
market.
Place
Place includes all of the methods used to get a product or service into the hands
of the customer. In the case of a retail operation, place simply refers to the site of the
retail outlet or store. For a manufacturer, however, place refers to all the modes of
transportation used to deliver manufactured goods. For the manufacturer the issue of
place or location includes deciding whether products should be sold directly to the
customer or through a retailer or wholesaler. Like all marketing decisions, the location of
warehousing and shipping should be based on the nature of the business, the product or
the target market. Retailers are particularly sensitive to the second “P” of marketing.
There is an old saying that the three most important considerations for a retail business
are location, location and location. Retailers depend on a high volume of business from
passers-by; walk-in or drive-by traffic is essential to their success.
Price
A simple pricing formula based on costs plus a percentage for profit is a valid
way to start but price cannot always be dictated by costs. Entrepreneurs must take into
consideration the prices of competing products and services. Often the marketplace –
which includes the demands of the customer and the number of competing businesses –
will have an important influence on the pricing of products and services. Pricing policies
also affect consumer’s perception of a business; the prices of products or services
position a business in the marketplace, and establish a reputation that could be very
hard to change. For example, low-cost products could position a business as an
inexpensive supplier that sells low-quality goods.
Promotion
Promotion includes all the techniques used by a business to communicate with
potential customers. The scope of promotional techniques available to entrepreneurs is
extremely wide including such things as direct mail, coupons, yellow pages, etc. Each
method has distinct advantages and disadvantages and the entrepreneur use of various
media must be well-planned if it is to be effective. Advertising is just one of the
promotional techniques used by a business to communicate with customers.