The Marketing is involved in the process of creating a product before it is even designed, it is the driving force in modern business.
The Marketing use the Market research for obtain and analyze information about:
- Geographical location and size of the potential market
- Market trends
- Local regulations and legislation
- Activity, strategy and performance of competitors
- The profile of potential customers
- The needs of customers
All this information is then used to develop marketing strategies which are aimed at a specific target or sector of the market. This is called Market segmentation. A business may concentrate on one, several or all the different segments.
- There are different variables that might be used in segmenting a market:
- Lifestyle as sports and exercise goods and services
- Age for example fashion clothing are preferred by young market
- Ethnicity: the people with different backgrounds have different wants as the food
- Income and social classes for example luxury goods aimed at wealthier consumers
- Gender for example man (hunting and fishing articles) and woman (cosmetics product)
The companies can obtain information from various sources:
- Official statistics and reports published by professional or governmental agencies
- Sales invoices, reports and accounts collected by the company itself
- Market research organizations
- Interviews and questionnaires
Each company needs a marketing mix floor composed by the different strategies to be used to sell on the market. It is known as Marketing mix, a combination of, before, 4 and now, 7 factors, called “The seven P of marketing mix” :
Product: when companies developed a product, they need to make decisions about all the details of the products. One of the most important aspects related to a product is branding. This is the name of the product that makes it different from other. Branded products are normally sold as being of a better quality than unbranded products. This means that they are also sold at a higher price, but consumers are happy to pay more because they feel that they are getting the best.
Price that can be:
- Cost-plus pricing: it means that they add up the costs of manufacturing and selling the product, and then they add on an element for profit
- Customer-oriented pricing: this is when companies find out by carrying out market research what the potential buyers of a certain product are prepared to pay
- Competitor-oriented pricing: the price is based on the prices charged by competitors for similar products
Place: Companies must carefully choose the right channel of distribution to make sure that their products are in the right place, at the right time for customers to buy. They have to decide how to launch their product on the market for example through wholesalers, retailers, directly to customers or through Internet. The choice of the distribution channel is influenced by: type of market, type of product, costs involved and size of the business.
Promotion: gives the consumer information about the product.
There are different methods of promoting products:
- Advertising: is the way wherewith the public is informed about the existence of a product
- Sale promotion: incentives are given to customers (free samples, discounts, special offers, free gifts)
- Personal selling: sale representatives and agents personally contact potential customers
- Direct mailing: post or e-mail
- Sponsorship: companies sponsor sports or cultural events as a form of publicity
- Trade fairs: they are good opportunities for business to make new contacts and to generate new sales
People: the consumers do not want to deal with companies and impersonal brands, now it is vital to humanize the brand. This process allowed the identification of the brand with people that at that moment the offer.
Process: having an efficient and functional production system, and express it clearly, helps the consumer to perceive immediately the business efficiency and the company to work in an way organized and productive.
Physical Evidence: Making them understand immediately to the consumer the quality of proper product.