Learning Outcomes 1 & 2
08/10/2012 - 05/11/2012
Task 1 (L.O.1.1)
What is the Marketing Process?
There are many different definitions of the Marketing Process, here are just two of them. i) “Marketing is the social process by which individuals and organizations obtain what they need and want through creating and exchanging value with others.” (Kotler and Armstrong 2010)
This basic definition of marketing explains how societies and organisation interact, where an organisation fulfils the wants or needs of individuals. In return, the organisation hopes to make a profit.
ii) “Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organisational goals” (Marketing Principles, BPP Learning Media,2010 pg.6) This definition looks at marketing more from the view of an organisation. It takes into account a lot more factors, such as the marketing mix, and looks at marketing as something that has to be done in order to achieve their goal, ie. Profits.
The marketing mix is essential for an organisation to establish both its target market and unique selling point, it uses the 4 P’s to help find these. The four P’s are the idea of modern marketing theorists and they cover the ways that an organisation can influence consumers to buy their particular brand. The Four P’s are Product, Price, Place, and Promotion.
A product is anything that can be offered to the marketplace for consumption that will satisfy a need or want. It is not just something physical (tangible), it can also be a service provided e.g. cleaners, psychics etc., where, once the transaction is finished the consumer does not have anything to show for the money spent. These are non-tangible goods. The packaging of a product is important, not only as protection, but for communication (how to use a product), to remind consumers of the brand, and also to express company brand values (fair trade, supporting charities etc.). (appendix 1.1.1) Price
“Costs will dictate the minimum price that can be charged in order to make a profit” (Marketing Principles, BPP Learning Media Pg.19)
Except for Loss Leaders, the purpose of a product is to make a profit for an organisation. The product must be bringing in more money than it’s costing to make or it’s not a viable source of income. This involves balancing a range of factors. Some examples are: 1. The price of competitors: If a product costs too much when compared to a similar product, the company could price itself out of the market. 2. What the target market is willing to pay: “The amount your target market is prepared to pay for your product depends on its features and the target market's budget.” (http://www.learnmarketing.net/marketingmix.htm). 3. Consumers Perception: Some consumers will equate the price of goods with quality. What matters for a product in relation to pricing is the average price paid. Eg. Fashion & technology starts off with high prices, while FMCG’s start low
Traditionally in the 4P’s, place refers to distribution. It is concerned with where the product is bought and consumed, and getting the product in the right place at the right time (S. Hilliard, notes). Distribution also concerns itself with where a product is made, how it is stored and how many people are involved with a product before it reaches the shelves. The more people involved, the more expensive the product. If the producer of a product sells directly to the public, they must be easily accessible. There are three main distribution strategies available:
1. Intensive Distribution: This can be used for impulse or low-priced goods e.g. Coca-Cola. 2. Selective Distribution: This is used when a product is sold in a few places. Products still gets to wide geographical markets, but at the same time, feels like there’s some exclusivity to it. Eg....