221 Putting It Together: Marketing
Summary
This module covered the marketing function and its role in contributing to the success of a business. Below is a summary of the topics covered in this module.
What Is Marketing?
We define marketing as a set activities that a business undertakes in order to create an exchange between businesses and customers. In short, they are activities that create value in order to persuade customers to exchange their money for the product, good, or service.
The Four Ps of Marketing
The marketing mix contains four components, which are referred to as the four Ps: product, price, place, and promotion.
External Marketing Environment
When businesses send a product, good, or service out into the market they have controlled what they send, how they send it, what they charge, and how they will promote it to consumers. What they cannot control is the market environment. Factors such as the state of the economy, changing technologies, cultural and social norms, the legal and regulatory environment, and competition make up the external marketing environment.
Market Research
The ultimate goal of market research is for companies to understand who their customers are and what they want. Using a six-step approach, the company can create a report that enables it to make informed decisions about products, goods, and services.
The Marketing Plan
Once a company has determined its objectives and the strategies needed to achieve those objectives, it crafts a marketing plan to execute against those strategies.
Branding
Branding is the most recognizable part of the marketing mix. A brand can be a mix of words, colors, symbols, or any other feature that distinguishes one product from another. Brands create value for the company, and if the brand is successful it will create brand loyalty among consumers.
Pricing
There are many strategies that companies can use to price their products. Penetration, skimming, odd pricing, everyday low prices, high/low, and cost-plus are just some of the strategies companies can adopt to achieve their financial goals.
Distribution
How companies get their products into the hands of consumers represents the “place” component of the four Ps. Companies can choose a direct, indirect, or speciality approach to product distribution.
Promotion
The promotion of a product can be a complex and broad set of activities that range from loyalty programs, coupons, celebrity endorsement, event sponsorship, sales, and discounts. How a product, good, or service is promoted to consumers is driven by the target market and the characteristics of potential buyers.
Social Media Marketing
The Internet and advances in mobile technologies have resulted in an explosion of social media such as Twitter, Facebook, and Linkd-In. Today companies are using social media as an integral part of their marketing activities and as a way of capturing real-time information about consumer behavior.
Synthesis
On February 1, 2015, a notable event occurred in the history of television: 114.5 million Americans watched a football game on TV, making it the most watched television program in U.S. history. Are there really 114.5 million football fans in the United States? Probably not. Why did so many people watch? Answer: the commercials!
Advertisers paid $4.5 million for 30 seconds of commercial airtime during this event. That works out to $150,000 per second. What were those companies doing when they made the decision to spend so much money? Marketing!
This is of course an extreme example of marketing in action, but if you begin to look closely at the world around you, you’ll find that companies’ marketing efforts are everywhere. Why do you shop where you shop? Are you a Coke or a Pepsi drinker? Do you only purchase items when they are on sale? Is your keychain (real or virtual) full of customer-loyalty cards? Marketing efforts are at work practically every time a customer perceives the value of a product or service and decides to swap some hard-earned money for it. Such marketing triumphs are just not the happy result of arbitrary circumstances, though—they’re the product of strategic planning and research. Understanding how marketing efforts are created and conducted can help you be a better-informed consumer of products, goods, services, and information.