Marketing is variously defined as:
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. (American Marketing Association)
(2) determination of its price,
(4) development and implementation of a promotional strategy. (The Business Dictionary)
The action or business of promoting and selling products or services, including market research and advertising. (The Oxford Dictionary)
And there are hundreds more definitions to describe the processes by which good and services find their way from producer to buyer. It is the farms stand owner giving you a slice of peach to sample, it is Nike sponsoring international sporting events; it is remembering a customer likes cream in his coffee, and it is full page ads in the New York Times. It is every effort you make to sell your product.
As noted in the Business Dictionary’s definition above, there are four (some times 5 and occasionally more) “Ps” of Marketing which encompass the range of items which you can control in the marketing process. They are considered the fundamental base on which you build a marketing plan.
Product : You must create the right product (services being a product) for the right customer.
But the product is more than its basics: it encompasses the color, the brand, the packaging, and, most of all, the perception the customer has of it. Each potential customer sees the same array of ball point pens in an office supply store, but each customer buys based on a specific responses to the display. One may be attracted by the wrap-around packaging which looks like a pencil case while another is only interested in fine points with black ink. The person shopping for school supplies for three children may choose a lower priced package of a dozen pens, while the executive may select a pen with a professional look from a noted manufacturer.
The product must fill a real or perceived need the customer has. A man who is hungry may fill that need with an apple or a $200 meal. A customer may decide they require a pair of jeans and for some that need will be filled by a pair of Levis. For others the need will be filled by $3000 Gucci jeans. These are not the same customer or the same product. You must figure out what your customer thinks they need and and fulfill it.
Price: the right price for the product for the customer.
Perception is a key quantity in the customer’s evaluation of the appropriate price. In the jeans example above, the Gucci customer is likely buying the label as much as the jeans. That customer is not price sensitive (the degree to which price affects buying behavior) in that case. We all have a range of sensitivity to price: some are very sensitive to the price of school clothes for their children and will look for bargains but will pay whatever is asked for sports shoes. Timing may also factor into price sensitivity: You may be willing to pay more to repair a computer malfunction in the middle of a work project than at other times. You will need to evaluate your customer’s sensitivity on the specific product or service you are selling to determine the price at which s/he will buy.
Place encompasses the distribution channel as well as the actual physical placement of the business and the product.
The distribution channel is the route traveled by a product from producer to the end user and includes all the interim stops along the way including, but not limited to, wholesalers, distributors, importers, agents and retailers. Each of these receives the item at one price and sells it at a higher price. The advantage to the producer of distributors, wholesalers, agents, etc is their access to customers the business doesn’t have. The disadvantage is the cost to the final buyer is thereby increased by each stop along the way.
The location of a business is tantamount in some cases and irrelevant in others. We are all aware of online companies in remote regions. A manufacturing concern may decide that access to transportation is more critical than access to customers. A retail company may live or die on the strength of their location.
The placement of products to customers (such as in a physical store or on a website) may be crucial to the sale of the product. Next time you are in a grocery store note the placement of cereals, for instance. The major firms have pride of place and position their offerings at eye level for the targeted customer (Cocoa Puffs on a lower level than Raisin Bran). As you wait in line to check out in almost any store you are surrounded by items which are impulse buys. On most travel sites, the first hotels which appear for any city are the higher priced properties.
Some manufacturers will forgo additional sales to “protect” the image of their product by only allowing it to be sold in specific locations. There are brands you will never see in discount stores: high end watches, for instance. Some perfume and cosmetic companies will only allow their product into department stores of a certain level and never discount. The companies are supporting their image, placement and price point.
Promotion is the entire set of activities undertaken to enhance the sales of your product or service to the customer. It includes all marketing, public relations, advertising, sales incentives, internet and email marketing, direct mail, trade shows, sampling, word of mouth – even your business cards. It is everything you do to put your product or service in the customers line of sight. It is something as small as a handwritten note of congratulations on a promotion, to sponsoring a major league sports team.
It has long been said that the most effective marketing is word of mouth and there is much truth in that statement: I will certainly trust my friend’s evaluation of a restaurant over the newspaper’s. However, it has never been as true as it is today with the wide spread use of on line business reviews. They are to be relished and feared as your customers take to the internet to detail their interface with your business. The fact that the review or comment is unfair does not make it disappear (although you should certainly respond thoughtfully).
We now all rely on evaluations of products and hotels written by people we don’t know and who may or may not have any relevant experience. I once booked a hotel in the Italian Alps which had stellar ratings. Given that it had bunk beds and was effectively a hostel suggests that the average age of reviewers hovered around 20.
You have the same issue with reviews of your business: you don’t know who wrote them or how knowledgeable they are (or aren’t) about your product. It forces you to have excellent customer interface every time to avoid a bad review by the disgruntled customer who thinks you should have solved his computer crash in an hour.
To determine the most effective marketing for your business, begin with your customer: who are they, where are they and what is the best way to reach them?