The Oxford English Dictionary defines Marketing as the action or business of brining or sending to market.
According to Kotler (1994) marketing is a process which 'consists of analysis market opportunities, researching and selecting target markets, developing marketing strategies, planning marketing tactics, and implementing and controlling the marketing effort'. Marketing was born in the 1950s and can be characterised as the new psychological approach of making profit. Before Marketing, the supplier was selling goods or services directly to the customer and in return he was paying in money or exchange goods. Marketing does not start after production but it starts long before the goods or services go into production. Then new Marketing approach goes deeper into the customer's importance, trying to offer the product, I the right place, at the right price and at the right time .
Nowadays most of the companies do not start producing goods or offer services before they meet customer's objectives. Therefore companies can be divided into two categories, the Market-driven and the internally oriented business. Market driven businesses focus on the customer. They define the markets that fall within firms' business.
All the departments of the company have in mind that the success of the business is depended entirely on the customer's satisfaction. They know exactly how the customers' criteria are set, trying to match their Marketing Mix with these criteria. Market driven businesses acknowledge the important role of marketing and they invest in market research and track market changes. Most of the companies nowadays employ people that will contribute to a Marketing success. The main job of those people is to forecast changes within the market and concentrate their strategies in understanding competitive strategies and forestall competitors' actions. Market driven companies try to find markets that no other company had discovered.
They act very fast to these new markets and they are able to manufacture and distribute their products before anyone else. On the other hand internally driven companies' view Marketing expenditure as a luxury, which is not essential in making profit. The convenience of the company comes before the customer needs. They see the price as the main factor for making more sales.
Such businesses ignore competition, are very vulnerable when the customers' needs changes and they are forced to go out of business quickly. The companies that understand customers (market-driven) can move a step forward by developing an effective Marketing Mix. Because Marketing is much more than advertising and selling, it encompasses everything from what products or services you sell to how you get them to the consumer, most people find it more convenient to define Marketing in terms of the Marketing Mix or the 4 Ps. Jerome McCarthy in 1960 first list the four Ps as the Product, Price, Place and Promotion.
The Marketing Mix is the business overall offer or value to the customer. The four Ps can be separated into two groups. Product, Price and Place as the offer mix and Promotion as the Promotional Mix. Product includes everything from packaging design, branding, trademarks, warranties, and quarantines, product life cycles and new product development. A product is anything either tangible or intangible (services) that satisfies the customers needs .
Companies develop a distinctive name, packaging and design and they form a brand. Brands are often supported by logos. These logos create a prestige and remain into the customer's mind and thus help the purchase of the product. Brands can be divided into two types. Those are the manufacturer brands and the own-label brands.
Manufacturer brands are created by producers where they have the responsibility of the marketing e.g. Nescafe. On the other hand own-label brands or distributor brands are created and owned by distributors e.
g. Tesko Corn flakes. Price is one very important element in the Marketing Mix. It is the ability to set profitable and justifiable prices of the products. All the other elements of the Marketing Mix include expenses from the companies' point of view. Price is the unit that the company receives for the product or service that it provides.
Companies must be able to set a fair price (not too expensive or too cheap) in connection to the other parts of the Marketing Mix. This means to offer a price lower than those of the competitors. If a product is made more attractive (added value by additional feature), it makes that product more valuable to customers . Also when price has effect on distributors and retailers, firms must be able to offer a price to meet both retailers' and customers' expectations. For example Kellogg Co. must offer Corn flakes at a price that will be profitable both for the Company and the distributor i.
e. Tesco and simultaneously be attractive to the customer. Some years ago companies set their prices only by cost-orientated methods i.e. calculate costs and other expenses and deduct upon expected sales and then set a price or even launch a new product. This method had a lot of drawbacks since it would lead to the increase of the price product resulting in sales fall.
Another drawback is that it takes what is convenient for the company considering the customer factor not important. Companies that establish Marketing orientated pricing have used physiological techniques like trade-off analysis, economic value to the customer analysis. Place is the third factor of the Marketing Mix and covers the physical distribution of goods, i.e. channels, coverage, distributors, transport e.t.
c. A product should be available in quantities every time customers want to buy it and also be in convenient locations. A success of the product depends entirely on the distributor. This process is called Physical distribution. This can be defined as a set of activities concerned with the physical flows of materials, components and finished goods from producer to channel intermediaries and consumers . I.
e. Kellogg Corn Flakes success in U.K. market was dependent upon the availability of big retailer groups like Tesco, Sainburys e.
t.c. The advantage of using distributors is that it helps companies to reduce distribution costs and effort, as there will be less transactions between different producers providing their goods to different customers. Physical distribution deals with problems like at what level of customer service should be provides, how should the orders be handled, inventory control and how much inventory should be held. The next question is where this inventory should be located and how many warehouses should be used, how will the products be transported and how the materials should be handled during transportation.
Promotion is a process that aimed to determine the strategies and necessary action plan to achieve communication objectives. Promotion can be divided into four elements: Advertising, Public relations, Sales Promotion and Personal Selling. There is a strong theory of how advertising works. The AIDA model was developed in the first part of the century to show that. It consists of Attention - Gain attention of the audience Interest - kindle interest in the product/Service on offer Desire - Arouse desire for your product above any desire of your competitor's product.
Action - The Customer buys the product . Advertising strategy involves an analysis of the target audience; it sets objectives, budget decisions, message and media decisions and evaluates advertising effectiveness. Sales promotion is incentives to customer and the main aim is to increase purchases. I.
e. free gifts, money off vouchers, buy one get the second half price, free samples e.t.c. Public relations are the ability to create an environment that will help the company to promote and sell its product. This can be any form of publicity i.
e. learning about the product from an independent body and not in a form of advertising by the company, seminars, donations. Sponsorship is another opportunity for companies to create publicity around its brand name in the news media. Sponsorship of sport event provides the type of a popular indirect promotion and exposition of the brand. Exhibition is another way of public relations. Buyers, sellers and competitors are gathered together.
It is an opportunity to reach interested consumers by providing them with a range of products in display. It is an opportunity to provide new products by organising a live demonstration to hundreds of people about the use of the product. Personal selling is the most direct and successful way to sell products. Examples of personal selling are from door to door method or company's assistants at department stores. Companies use methods like questionnaires and surveys or make presentations that can help them understand buyers behaviors. There is a growing view among marketing academies that a fifth P -People.
Should be valid and important part of Marketing Mix. It is very crucial for companies to select the best staff. This staff should be well trained to provide motivation and customer care. In retrospect, today companies that do not follow Marketing approach and fail to analyse correctly the demand or need of the customer go out of the market quickly.
Companies that see Marketing as a long-term investment and adopt a customer orientation program are the ones that take the lead. Extensive research is required by companies that aim to provide the specific information needed by management to make a final marketing decision.