key Marketing Princibles

What is marketing?

Marketing may be narrowly defined as a process by which goods and service are exchanged and values determined in terms of money prices.  That means marketing includes all those activities carried on to transfer the goods from the manufacturers or producers to the customers.

The marketing Concept

The marketing concepts hold the key to achieving organizational goals consist in determining the needs and the wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors.

Under marketing concept the emphasis is on selling satisfaction and not merely on the selling product. The objectives of marketing are not the maximization of profitable of sales volume but profits through the satisfaction of customers.  Consumers are the pivot point and all marketing activities operate around this central point it is therefore essential entrepreneurs identify the customers establish a rapport with them, identify their needs and deliver the goods and service that would meet with their requirements.

Here is the Component of marketing concept:

1.       Satisfaction of Customers:  In the modern era, the customer is the focus of the organization. The organization should aim those goods and service which will lead  to satisfaction of customers.

2.       Integrated marketing:  the function of production finance and marking should be integrated to satisfy the needs and the expectation of customers.

3.       Profitable Sales Volume:  marketing is successful only when it is capable of maximizing profitable sales and achieves long- run customer satisfaction.

The difference of Marketing and Selling

The basic difference of them lies in the attitude towards business

Starting point                      focus                         means                                        ends

Selling concept

Factory                         product                   selling Promoting                    profit through

                                                                                                                                              Sales volume

Marketing Concept

    Market                     Customer needs            coordinated marketing           profit through

                                                                                                                           customer satisfaction.                    

The importance of Marketing in small social business.

Since the marketing is the consumer oriented it has a positive impact on business firms.  It enables the entrepreneurs to improve the quality of their goods and service.

Marketing helps in improving the standard of living of the people by offering a wide variety of goods and service with freedom of choice and treating the customer as the most important person.

A large scale of business  can have it is own formal marketing network , media campaigns and sales force but small  unit or business may have to depend totally on  personal efforts and resources, making it in formal and flexible.

Marketing makes or breaks small enterprise. And enterprise grows, stagnates or perishes {fall} with the success or failure as the case might be success of marketing. 

 Marketing Research

 It is the process of collecting valuable information to help you find out if there is a market for your proposed product or service.  It helps you to take decision concerning the type of product; price and sales promotion   can be made rightly with the help of marketing information at the right time.

Marketing information can be collected from the following sources

Ø  Primary resource.

Ø  Secondary resource

Primary resource

It is the new research that you personally carried out. This data can be collected in either a quantitative or qualitative format. Quantitative – interested in “how many/much”, not ‘why’. Based on asking a valid sample, pre-set questions, to obtain valid data.

For example doing Exit Surface which is carrying out face to face as they leave your competitor store. This would help you to understand the reason for visit frequently and purchase from them.

Qualitative information is a primary form of market research which focuses on consumer feelings and opinions on a product or service. For example depth interview which is that the researcher going with the consumer on a shopping trip in store. it is all about to find out why they buy?

Secondary research

Secondary research is the processes of researching existing Information such as the government Census, library, books websites and the company yearly reports. The new entrepreneur can use these to find out and see the behaviour of the consumers regarding on his product or service.

Pros and Cons of Primary Research

Pros	Cons
Question aimed at answering co’s.  Objectives.	Expensive
Latest (updated) information	Risk of bias( influence) from interviewer
Assesses  consumer psychology	Need past data to compare finding.

Pros and Cons of Secondary  Research

Pros	Cons
Low cost	Quickly out of date
Good  general overview of market	Not tailored to co’s own needs
Based on actual sales figures or large samples	May  be expensive to join association/obtain report

A sample is “a smaller (but hopefully representative) collection of units from a population used to determine truths about that population” (Field, 2005)

Why sample?

Resources (time, money) and workload

Gives results with known accuracy that can be calculated mathematically

3 factors that influence sample representative-ness

Sampling procedure

Sample size

Participation (response)

When might you sample the entire population?

When your population is very small

When you have extensive resources

When you don’t expect a very high response

Types of Samples

Probability (Random) Samples

Simple random sample

Systematic random sample

Stratified random sample

Multistage sample

Multiphase sample

Cluster sample

Non-Probability Samples

Convenience sample

Purposive sample

Quota

The sampling process comprises several stages:

Defining the population of concern

Specifying a sampling frame, a set of items or events possible to measure

Specifying a sampling method for selecting items or events from the frame

Determining the sample size

Implementing the sampling plan

Sampling and data collecting

Reviewing the sampling process

Market segmentation.

It is the process of dividing the market in to distinct groups due to the difference of the needs, preference and buying capacity of customers.

It enables you to match your marketing effort to the requirement of the target market.  Instead of wasting your effort in trying to sell to all types of customers a scale of unit can focus its effort on the segment most appropriate to it is market.

Market can be segmented on the basis of following variables:

      Geographic Segmentation: Where are our customers located, and how can we reach them? What products do they buy based on their locations? The characteristics of customers often differ across nations, states, regions cities or neighbourhoods. The entrepreneur can decide to operate in one or a few or all the geographic areas, but pay attention to differences in geographic needs and preferences.

      Demographic Segmentation: How do the ages, races, and ethnic backgrounds of our customer’s affect what they buy?  Variables such as age, sex, family size, income, occupation, education, religion, race and nationality are widely used for market segmentation.

      Psychological variables: What do our customers think about and value? How do they live their lives?  Personality, life style, social class, etc. can also be used for market segmentation. For example, some products like pens, watches, cosmetics and briefcases are designed differently for common men and status seekers.

      Behavioural Segmentation: What benefits do customers want, and how do they use our product?  Buyers are divided into groups on the basis of their knowledge, attitude, use or response to a product.

Benefits of Market segmentation

      It allows the business to sell more products overall and perhaps increase it is profit.

      By identifying different Market Segments a business should understand its consumers better. Greater knowledge about it is customer will allow the business to vary it is product to suit their needs better.

      It might enable business to target particular groups with particular products

      It can help to prevent products being promoted to the wrong people.  This would be wasteful of resources and might possibly lead to losses.

      It might allow a business to market a wider range of differentiated products

      Customer may feel that their needs are being better targeted and develop loyalty to the business.

Positioning and Targeting market.

Targeting market is when you choose and select group of people in order to sell same product to all of them. This is because of that they share common needs that the company decides to serve. It is also call ‘differentiated marketing’

Mass marketing or ‘undifferentiated market’ is the process of selling same product  to everyone it is the opposite of the  targeting market.

Positioning

      The place of the product occupies in consumers mind relatives to competing product

      Typically defined by consumers on the basis important attributes.

Market segmentation:   Identify the market then develop the customer profile

Market targeting:          evaluate the market segments then select market segment to target     

 

Market positioning:   position for each market segment then develop a marketing mix for each target segment

Marketing Mix

Marketing mix is a systematic and balanced combination of the four inputs which constitute the core of a company’s marketing system – the product, the price structure, the promotional activities and the place or distribution system”. These are popularly known as “Four P’s” of marketing.

An appropriate combination of these four variables will help to influence demand. The problem facing small firms is that they sometimes do not feel themselves capable of controlling each of the four variables in order to influence the demand.

Marketing Mix

Product	Price	Place	Promotion
Features	List Price	Location	Advertising
Design	Discounts	Transport	Personal Selling
Variety	Allowances	Channels	Sales Promotion
Quality	Payment Period	Coverage	Publicity
Brand Name	Credit Terms Delivery
Packaging		Availability
Sizes		Inventory
Services
Warranties

Product: The first element of marketing mix is product. A Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Products include physical objects, services, events, persons, places, ideas or mixes of these. This element involves decisions concerning product line, quality, design, brand name, label, after sales services, warranties, product range, etc. An appropriate combination of features and benefits by the small firm will provide the product with USP (unique selling point). This will enhance the customer loyalty in favour of its products

Price: The second element is the price, which affects the volume of sales. It is one of the most difficult tasks of the marketing manager to fix the right price. The variables that significantly influence the price of a product are: demand of the product, cost, competition and government regulation. The product mix includes: determination of unit price of the product, pricing policies and strategies, discounts and level of margins, credit policy, terms of delivery, payment, etc. Pricing decisions have direct influence on the sales volume and profits of the firm. Price, therefore, is an important element of the marketing mix. Right price can be determined through pricing research and by adopting test-marketing techniques

The pricing policies mainly followed by the small firms are:

      Competitive pricing: This method is used when the market is highly competitive and the product is not differentiated significantly from the competitor’s products.

      Skimming-the-cream pricing: Under this pricing policy, higher prices are charged during the initial stages of the introduction of a new product. The aim is to recover the initial investment quickly. This policy is quite effective when the demand for a product is likely to be more inelastic with respect to price in its early stages; to segment the market into segments that differ in price elasticity of demand and to restrict the demand to a level, which a firm can easily meet.

      Penetration pricing: Under this policy, prices are fixed below the competitive level to obtain a larger share of the market. Penetration pricing is likely to be more successful when the product has a highly elastic demand; the production is carried out on a large scale to achieve low cost of production per unit; and there is strong competition in the market.

3. Promotion:  Promotion refers to the various activities undertaken by the enterprise to communicate and promote its products to the target market. The different methods of promoting a product are through advertisement, personal selling, sales promotion and publicity.

4. Place or Physical Distribution:   This is another key marketing mix tool, which stands for the various activities the company undertakes to make the product available to target customers. Place mix or delivery mix is the physical distribution of products at the right time and at the right place. It refers to finding out the best means of selling, sources of selling (wholesaler, retailers, and agents), inventory control, storage facility, location, warehousing, transportation, etc. This includes decisions about the channels of distribution, which make the product available to target customers at the right time, at the right place and at the right price.

Service and non profit

An organization that exists to achieve some goal other than the usual business goals of profit, market share, or return on investment

Such as social business, churches , schools and governments.

      Shared Characteristics with Service  Organizations

      Market intangible products Production requires customer’s presence

      Services vary greatly

      Services cannot be stored

Unique Aspects of Nonprofit
Organization Marketing Strategies

      Setting of marketing objectives

      Selection of target markets

      Development of marketing mixes

Non-profit Organization Marketing

Ø  Identity desired customers

Ø  Specify objectives

Ø  Develop, manage, eliminate programs and services

Ø  Decide on prices

Ø  Schedule events or programs

Ø  Communicate their availability