MARKETING

Market is a place where the sellers and buyers gather to decide the market price of a commodity. An effective market system acts as an information network linking together producers and consumers in a continuous, back and forth patterns. This information is important if producers are to meet the changing needs of consumers in cost-efficient manners.

Four Key Elements of Marketing Mix:

　

Marketing decisions involve with four key elements; Product, Distribution, Communication and Price. These elements combined make up the market mix. Every marketing strategy involves decision about which products make available to the market place, where to sell them, how much to charge for them, and what to tell the public about them.

I-    Products:

     The product is a goods, the concern of the manufacturer is how to develop a product that the people are willing to buy. The product must satisfy the desire of the consumer, otherwise, the buyers do not want to purchase. In order to comply with the market demand, we should concern about the size, color, brand name, packing, advertisement and promotion.

II-   Distribution:

Channels of Distribution

 

The complex patterns of ownership, transport and storage that link the producer and customers are called channels of distribution. The distribution element of the market mix refers to where the product is sold, how it is delivered and by whom.

1- Advertising:

Advertising is defined as any paid form of non-personal presentation and promotion of ideas, goods and services. The purpose of advertising is to tell the public about the firm and its products, and to persuade potential buyers that the firm’s products are better than those of its competitors. Started another way, the purpose of advertising is to stimulate demand. It does this by showing how the product can meet a consumer need or by providing information about the product.

A- Modes of Advertising:

There are two main techniques that the advertisers use in television, radio, newspaper and magazine… etc. One is to provide the information about a product. The other is to persuade the consumers to buy it. It, of course, can combine the two.

B- Advertising Objective:

The ultimate objective of most advertising is to sell more products. They encourage the people to use the advertising product more often and to introduce a new product to a product line.

III- Price:

How much charge to a product is one of most important matters involved in the business negotiation. It usually refers to the price unit, which is made up of a measuring unit, a unit price, a name of currency, trade term and shipping place.

For examples:

US$ 500.00 per M/T                             CIF L/A

HKD US$ 30.00 per carton                   FOB Dallas

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IV- Communication:

The product cannot be sold by itself, they must be told about the product before they can buy it. Some businesses promote their products through the personal selling, that is to say directing face to face interaction between the salesperson and customer or the television advertisement, newspaper and magazine… etc.

1- Sales Promotion:

Sale Promotions are another way for the firm to communicate with the potential customers. Example of sales promotions is pointed of purchase displays, free samples, coupons, gifts, product demonstrations and sweepstakes. In short, the sale promotion is very essential for most business.

A- Point of Purchase Displays:

Point of purchase displays direct the attention of the buyer to the product. They are placed at the point of purchase, that is, in the store, almost any product can benefit from those displays. However, where customers are expected to find the products sold in supermarkets, where the customers are expected to find products for themselves.

B- Samples:

Manufacturers and retailers give away free samples to encourage people to try a new product, especially food or household item.

C- Coupons:

A coupon is a piece of paper entitling its seller to discount on a particular product.

D- Gifts:

Makers of candies, laundry, soaps, food and other consumer products after using gifts to build customer loyalty for their products. Sometimes, the gift is presented to the customer at the time of purchase.

E- Product Demonstrations:

Demonstrations help sell a great many products. Many of us have been called in our homes by vacuum cleaner salespeople, who offer not only to vacuum all floors but also to shampoo the living room rug and to bath the dog. The key to a successful demonstration is getting the customer involved with the product.

F- Sweepstakes:

A sweepstake is a contest in which prices are awarded on the basis of chance. The promoters are required by law to disclose the odds of winning the sweepstakes, to show that the winners are located and price are delivered. The success of a sweepstakes depends on the product promoted, and the amount of advertising supporting it.

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    Three Approaches to Market Segmentation:

There is no single best way to segment markets; a segmentation approach that works for one market will not always work for another. The business exclusive should study a variety of course before deciding which is appropriate for the situation at hand. Three methods of segmenting markets are demographic segmentation, geographic Segmentation, and benefit segmentation

1- Demographic Segmentation:

The most widely used segmentation variable are demographic, such as income, ethic background, and age… etc.

A- Income:

Family income is very useful in segmenting market. The German statistician, Mr. Ernest Engel, stated that as family income increases, the percentage spent on the clothing and transportation increase, the percentage of income spent on the food decreases, and the percentage spent on housing remains constant.

B- Ethic Background:

A second set demographic variables useful for segmenting markets including nationality, region, and race. For example: research has shown that Hispanic-Americans coming from many difficult countries usually prefer the well-known brand name product. In the same manner, religion influences some aspects of market behavior. Mormon does not buy the cigarettes and liquor… etc.

C- Age:

Many marketing managers find that segmenting markets by age works well for their products. Family with infants is the primary market for baby foods. The people over 65 years old are the principle user of medical service and drugs.

2- Geographic Segmentation:

Another relatively easy way to segmenting market is geographically or by region. The demand for many products varies from one section of the country to another and results from historical and culture distinctions. For example, consumption of Mexican food is highest in Southern California and Taxas… etc.

3- Benefit Segmentation:

Another popular form of segmentation is benefit segmentation. Instead of segmenting market on the basis of income, ethic background, age or geographic location, practitioner of benefit segmentation look to the benefits that people seek in a product. For example, a product may have two benefits; style and low cost. Consumers favoring style as the primary benefit make up one segment. Consumers favoring the low cost make up the other. Although people would like to get as many benefits as possible for a product, certain benefits are usually given much greater weight in purchase decision.

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