Business Education: Marketing Basics

Four Ps of Marketing
In 1960, Jerome McCarthy defined a framework for understanding and making decisions in marketing called the Four Ps, which make up what is called the marketing mix. The marketing mix includes the product itself, the price at which it will be sold, the places the product will be sold, and how the product will be promoted. Determining these four aspects of a prospective product is useful in that doing so provides objective considerations for developing a plan to sell what you plan to create.
Since its proposal in the 1960s, McCarthy's Four Ps have been almost universally accepted in marketing models.

Product
The product itself is a very important part of marketing. A product can be a physical good or an intangible service. The company needs to pay attention to the quality of the product to ensure it meets customer needs. They should consider its design; physical features (if it is a good) such as color, shape, and texture; and the packaging it is in. For both goods and services, customer service needs to be considered before, during, and after the sale. If it is a service, the exact service and how it will be carried out should be considered. All of these factors should be pleasing to the consumer.

Price
Pricing is a very important decision for a product because it can impact sales and opinions on the product. There are many factors that go into pricing decisions. This includes the costs, including fixed, variable, and direct and indirect costs. It also includes the competition. If the market is saturated, the company may have to lower the product's price to compete. It also depends on the group they are targeting and how much they would be willing to pay. Some companies also price as part of a positioning strategy. Penetration pricing is when companies offer the product at a low price initially to increase sales and market share. Skimming is when a company instead has a high price and then lowers it to make it available to more and more of the market. With competition pricing, a company looks at competitors when pricing. In bundle pricing, they tie the product to other products. Cost-based pricing is done based on costs and the desired profit. With premium pricing, companies price their product high to show that it is exclusive. Companies use a variety of pricing practices depending on the product.

Placement
The placement element of the four Ps of marketing refers to the distribution or how the product gets from the company to the consumer. It focuses on the distribution channels utilized as well as the elements involved such as order processing, inventory management, warehousing, and transportation. The goal is to make an efficient and effective distribution system that is as cost-effective as possible. It also includes where the storefront or business is located. Of course, many companies utilize the internet to sell their goods and services and then ship the items to their customers. Placement must be convenient to the customer and cost efficient for the company.

Promotion
No matter how great a product is, it will not do well if no one knows about it. This is why promotion is so important. Promotion is the act of marketing a product so that people become aware of it and hopefully want to purchase it. This can include many facets. One is public relations, including press releases, sponsorships, trade fairs and other unpaid promotions, and advertising and sales promotions. There are also different promotional strategies. In push marketing, businesses bring their products to customers. New products can benefit from this. In pull marketing, businesses try to convince consumers to come to them through sales promotions, brand loyalty, and advertising dollars. Both are commonly used.

Expanded Marketing Mix
In the 1980s, Booms and Bitner proposed an additional three Ps to add to McCarthy's Four Ps of Marketing, which together are often called the 7 Ps of Marketing or the Expanded Marketing Mix. The three added elements include consideration of the people, the process, and the physical evidence.
People refers to all human factors in sales, including customer interaction, employees, and general relationship mechanics. Often this is expressed through decisions regarding policy, uniforms, and customer service.
Process refers to the flow of service delivery. This varies greatly between business types, but often has to do with operations and efficiency. This is usually expressed as particular training policies, checklists and standardization, and best practices in business.
·        
Physical evidence refers to the actual physical environment that customers will interact with, which goes on to influence the customer experience. For instance, souvenirs are tangible, physical products that remind the customer of the experience. Another example might be the noise-level at a basketball game, which can be either appealing or irritating to a particular customer base.

Advertising
There are many forms of advertising, including print, television, online, and radio. Within each of these are subsets. For instance, online advertising includes social media ads, banner ads, and pop-up ads. Many companies use an assortment of different advertising techniques, some of which can support each other. The goals of advertising include reaching consumers, teaching consumers about a business' products, convincing people to purchase the product, building brand loyalty, increasing sales, and more. Typically, marketers build advertising campaigns with a step-by-step process. First, they perform research to find out how best to advertise the product to their target market. Then, they create a budget. Next, they create the advertisements, often using a specific theme or idea. They decide on the type of media to be used and schedule it in the best way. Finally, they set the campaign in motion.

Marketing Research
Companies perform market research to learn about their customers and the factors that affect their company. It can go a long way to producing quality marketing campaigns. There are different types of marketing research. Sales research involves looking at the sales numbers and the strategies the company was taking when sales were high as well as when they were low. They could look at the times they did not do anything, and see how sales were then. The goal is to recreate the wins and avoid the losses.
Companies also do product research. In this research, companies try to identify the characteristics of a product or service that will fulfill the customers' needs. It is done to help produce the best product that will satisfy the customer. Companies will also look at what products can be developed with existing and upcoming technology. Advertising research aims to make advertising more effective. For instance, a company may show an ad to a sample audience before releasing it widely to test its efficacy.

MIS
A marketing information system (MIS) helps marketers make good decisions. It collects and analyzes internal and external data and then sends out that information so marketers can better make decisions. It includes user interfaces, which allow the marketers to evaluate and understand the data; application software; marketing databases; and system support. There are many software programs that create an MIS. It helps the company make decisions based on actual information and data. Business managers use it to better understand their customers and the right decisions to make. It can help them understand the marketing environment and its changes. A business manager might use it to come up with the right marketing plan.

Collecting Market Data
Marketers collect as much market data as possible to help make marketing and business decisions. Marketing research can take many forms. Companies may give out surveys to ask consumers about their behavior.
These can be done in person, by mail, by phone, online, or through email. They form focus groups to find out information. A group will come together to talk about and evaluate a product. They will also look at public records. The data may be primary data or secondary data. Primary research is when marketers do original research. For instance, they give out a new survey. With secondary data, marketers look for data that already exists. They may do an evaluation of several studies, for instance. Primary data can be specifically tailored to the company, but can be expensive. The company may not have the means or resources to collect it. It can be used to find the most up-to-date information, however. Secondary data can be much cheaper. Sometimes it is hard to find because companies don't always share their information. The data may be outdated or not exactly what the company needs.

Marketing Plans
A marketing plan is vital for any business. It gives a direction for marketing efforts, incorporates important research, and serves as a guide for the marketing team. It contains various information, including details on the target market, the company's competitive position, the various methods that will be used to reach the market, and strategies for differentiation. First, the marketing team should research the target market and the best ways in which to reach them. A marketing plan typically encompasses many tactics because different consumers can be reached different ways. Marketing activities may include print, television, and radio advertisements; sponsorships; press releases; a website; a social media presence; and more. There also needs to be a realistic marketing budget to support these activities. After the plan is created, they should constantly revisit it and make changes as necessary. It should contain both short-term and long-term goals, both of which should be realistic. It is also important for marketers to constantly evaluate the success of marketing activities by finding out the return on investment. They should try to measure as many of the activities as possible to evaluate where the money is best spent.

Marketing Strategies
There are a variety of marketing strategies a business can employ. With an undifferentiated marketing strategy, the company has the same marketing strategy and marketing mix (product, placement, promotion, and price) for the whole target market. It doesn't differentiate between anyone. This can be easier and less expensive because the company just needs one campaign, but it can also be less effective because the segments in markets differ in tastes and responses to marketing. They might benefit from different strategies. In a differentiated marketing strategy, the company divides the target market into segments based on similar characteristics and creates a marketing mix and strategy for each segment.
Although more expensive, it can be more efficient. A third option is a concentrated marketing strategy in which a business focuses only on one segment of the target market and markets towards them. Again, they only need one plan, but they are risking everything on one market and possibly ignoring other potential customers.

Competitive Marketing Strategies
A company can choose from one of many penetration strategies to get sales from competitors. They may try price adjustments by lowering prices or increase the amount of promotion with an effort like an advertising campaign. They can try different distribution channels to make it easier for consumers to get their products. It is also a good idea to directly improve the product so that more people are interested in it and start to prefer it to competitors' products. Another type of marketing strategy is horizontal diversification. The company produces products that are different than its current offerings, but which might be desired by their current market. They might be able to increase sales this way and still target the same market.

Market Segmentation
Market segmentation involves breaking up a large target market into segments to try to find an ideal group to target. There are various ways a company can segment the market, including by the population's demographics; the physical location of the population; and psychographic characteristics such as lifestyles, values, attitudes, personalities, social class, and interests. Segments need to be measurable, large enough to generate a profit, stable, convenient to reach, and made of people who prefer the same products. Once a company has segmented the market, they may choose a concentration or multi-segment strategy. In a concentration strategy, the company chooses one segment to pursue. This will be good for a company that has a specific product that would appeal to one group. For instance, a very expensive car company such as Ferrari only focuses on people who choose to drive very expensive cars. The brand does not offer cheaper cars because they want their brand to be known as an ultra-luxury brand. With a multi-segment strategy, companies market to more than one segment and may change the marketing mix accordingly. More sales can be achieved because there are more possible customers.

Factors That Influence Decisions in Marketing
Business ethics should be considered during the decision-making process. Marketers have to be sure not to do something unethical when marketing or they can get in trouble with consumers or even the law. Sociocultural factors also affect marketing. Different cultures respond to different types of marketing. Marketers should take advantage of available technology. For instance, many organizations utilize social media because it is inexpensive and wide-reaching. Of course, marketers have to follow laws and regulations or they could be subject to fines or other penalizations.
Marketers evaluate the market and use different methods to forecast sales to help them make marketing decisions. For instance, they may perform trend analysis to find patterns in sales data to get an idea of future sales. They can use that to evaluate past marketing strategies and help create the best ones for the future.

Product Life Cycle
A new product has a life cycle, characterized by introduction, growth, maturity, and decline. In the introduction stage, the goal is to make people aware of the product and create a market. There are different pricing strategies such as penetration pricing or high skim pricing. The company brands it and promotes to early adopters. In the growth stage, the company tries to get more market share. Promotions work to get consumers to prefer the product over other offerings. They may add new features to the product or add new types of distribution. It will be promoted to more people.
Once a product reaches maturity, the sales growth decreases as competition may arise, causing a possible lower price. The company works to keep the market share it has as well as maintain its profit. They may improve the product to make it more differentiated and work to promote these differences to consumers. In the decline stage, sales begin to decrease.
Companies may choose to keep the product with or without changes, harvest it with lowered costs, or discontinue it.

Product Lines and Product Mixes
A product line is a group of related products a company offers. They may be related by price, function, target market, or other characteristics. A product mix comprises all the products a company offers. Its width refers to the number of product lines with it, its length covers the number of products in a line, its depth covers the number of versions of the same product there are, and its consistency refers to the uniformity of those versions. There are various factors that influence decisions on product lines and product mix. Companies should consider how much products cost to make and their sales potential. They need to consider what products their target buyers will purchase. If there is a reason their main products won't sell, they might need to develop new products. Additionally, if a product is older, they may want to add new features to entice people to stay with it. Companies are constantly changing their product mix and lines.

Branding
Branding is very important for a company to make its product known in the market. It is how the company distinguishes its product or products as differentiated and may include logos, names, graphics, shapes, and more. It can help its product stand out and build loyalty to it, especially as it matures. There are different types of branding strategies. Sometimes they use company branding, where the brand is connected with the general company but not individual products, such as Rolex Watches. In product branding, the name of a product is important, such as Hershey's Kisses. Attitude branding involves connecting the product with a feeling. They may successfully connect the product to happiness, such as in Coca Cola's Open Happiness campaign. In iconic branding, the brand helps with the person's identity. For example, Apple is an iconic brand that has become synonymous with modernity, innovation, and aesthetic design. With a no-brand strategy, the packaging is simple as if there is no brand, such as the packaging for the Japanese brand Muji. In the previously mentioned brand strategies, the labels and packaging are crucial to promoting the brand. For instance, an expensive watch will generally be packaged nicely and elegantly.
Brands are a very valuable intangible asset.

Distribution Channels and Channel Integration
Many companies use intermediaries to make the flow of products more effective and efficient. A direct channel takes the product straight from the producer to the consumer. This might be a face-to-face sale or an online sale. An indirect channel takes it through nonaffiliated retailers, wholesalers, or other parties. It may be a one-level channel with one intermediary such as a retailer, a two-level channel with a wholesaler and retailer, or have even more levels. Some companies take advantage of horizontal or vertical integration. Horizontal integration happens when a company acquires a similar company. A company that owns a popular website might take over another, for instance. In vertical integration, a company will also own another part of the production and/or distribution process. For instance, a company that makes chocolate chip cookies takes over a firm that makes chocolate chips or opens a bakery to sell their cookies. Exclusive distribution channels have just one distributor; selective distribution channels have a few; and in intensive distribution, the products are located in many outlets.

Distribution System Parts
A distribution system involves getting a product from the production line to the customer. It contains various parts. First is order processing, in which the consumer places an order that translates to the purchased products. It is important that this be both efficient and accurate.
Next is materials handling, which is all of the processes involved with caring for, storing, and moving the materials of production and products. With inventory management, companies strive to keep the cost of inventory as low as possible while increasing the quality of the products. A good system can reduce costs significantly. Many companies warehouse products and need to find ways to make that as efficient as possible to reduce costs. Finally, transportation to get the finished goods to consumers must be done as quickly and inexpensively as possible. Technology has helped distribution systems a great deal. One example is using bar codes so a company can always know where a product is. Many computerized systems run parts of the distribution system.

Retailers
Mass merchandisers are large retail stores that sell many different types of products. They may sell anything from furniture to clothing to appliances, all in the same store. Sears is an example of a mass merchandiser. Discount stores such as Wal-Mart generally sell items at lower price points than other sources, often at a lower quality. Many people like to buy at chain stores, which are stores owned by one company that sell similar products in many locations. People like shopping at familiar places because they are accustomed to them and feel comfortable in them. They know what to expect. Specialty stores specialize in a specific type of product and related goods. For instance, a small store that sells only bath and body items may be a specialty store. These sometimes offer higher prices, but employees will often have more knowledge of the items the store sells. Supermarkets specialize in all types of foods and drinks.

Factors That Affect Retailing Choices
One factor that affects what retailers a business chooses for its products is store location. A company should make sure the store is located conveniently for its market. The product mix also plays a factor. A company may want to look for a store that offers products that will aid in sales of its own products. For instance, a toy manufacturer will want to target toy stores where people are specifically going to shop for toys. The atmosphere also plays a part. The company will want the atmosphere to match the product.
For instance, a company that manufactures high-end clothing may look for an exclusive boutique to sell their products. How the product will be displayed matters. Products that are displayed to stand out, such as the books that are on a special table at a bookstore, will garner more attention and sell better.
Companies may look for these opportunities. All of these factors play a part in retailing choices.

Stages Consumers Use to Make Decisions and Factors That Affect Decision Making
Many consumers go through a process when deciding to make a purchase. First, they may recognize a need such as a need for a new car. Next, they will search for information such as information on the new models. After that, they will evaluate the different alternatives such as looking at the prices and features of the models. They will make a decision on whether to purchase and what to purchase. Afterwards, they will evaluate their purchase and whether it met their expectations. Various factors affect decision making, including cultures, society, personal factors (how easily the person spends), and demographics. Various adverting strategies try to entice buyers at a specific decision-making spot, such as a call to action or information when someone is comparison shopping. There are many motives behind making a purchase. Some people buy emotionally—i.e., a buying a sports car to impress neighbors or feel younger. Some buy based on physical need, such as buying a basic car to fulfill basic needs. Different marketing strategies are made to fulfill different needs.

Selling Process
The selling process is made of a number of steps. First is prospecting, or the process of looking for new customers. Sellers should consider existing customers and their traits as well as where new customers might be.

The pre-approach is researching and understanding potential customers. If a seller knows what the customer is looking for, he will be able to give the best sales pitch.

The approach is the start of the relationship and is crucial because it will identify the seller as someone a buyer isn't interested in or as someone offering help. The seller must engage the person and come off as knowledgeable, able, and willing to help.

The presentation should be based on how the product will benefit the buyer. It's not just that a dress is beautiful, but that the dress will make the buyer beautiful.

In the closing, the salesperson strives to effectively move it to a sale. They figure out what needs to happen to have the customer agree to the sale.

Finally, the follow-up can help sustain a relationship and keep repeat customers. The car salesman might call the customer to ask how he likes his new car.

Sales Support, Order Taking, and Creative Selling
There are many processes that are related to the sales process that can make a large difference in the success of selling. Sales support provides support services to salespeople. They may monitor the accounts of customers, gather data that is useful to the salespeople, answer the phone, work on scheduling, process sales leads, manage sales targets, and help with correspondence between the sales team and customers. Some people perform order taking. They do not attempt to convince anyone to buy but instead are responsible for takeing the orders. In creative selling, the salesperson follows a step-by-step process to engage the customer and hopefully secure the sale.

Factors That Influence Customer Satisfaction
Customer service is one factor that influences customer satisfaction. Customers want to feel like there is someone easily accessible to contact if something goes wrong and that the company hears their concerns and responds appropriately to the situation. Companies with good customer service will often be able to retain a customer even after a problem as compared to a company with poor customer service. Many companies focus on relationship marketing. They strive to form a relationship with the customer. They may provide more personalized service or reach out to customers. The customers will feel more valued. They may strive to increase customer satisfaction. Of course, customer satisfaction is influenced by the quality of the product as well as efficient service. They do not want to feel cheated by the company; instead, they want to feel like they're purchasing from a responsible company that cares about its customers. Companies that get satisfied customers will see more repeat customers.