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6.4. Marketing

DISCOVERING CONNECTIONS

  1. What is marketing?

  2. What does marketing include?

  3. Can you tell the difference between marketing and promotion?

  4. Is marketing a theoretical or an applied discipline?

  5. What is your opinion: are high marketing costs worth the efforts and expenditures?

READING

Text 1

Scan the text for subheadings. What do they tell you about the topic of the text? What do you want to learn about the topic?

Concept of Marketing

What does the term of “marketing” mean? Many people think of marketing as selling and promotion. In fact selling is only the tip of the marketing iceberg.

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 organizational objectives. Marketing activities can be organized into seven functions:

Product/service management is designing, developing, maintaining, and improving products and services that meet consumer needs.

Distribution involves determining the best ways for customers to locate, obtain, and use the products and services of the organization.

Selling is communicating directly with potential customers to determine and satisfy their needs.

Marketing-information management is obtaining, managing and using market information to improve business decision-making and the performance of marketing activities. It includes marketing research and the development of data basis with information about products, customers, and competitors.

Financing is budgeting for marketing activities.

Pricing is setting and communicating the value of products and services.

Promotion is communicating information about products and services to potential customers. Advertising and other promotional tools are used to encourage consumers to buy.

Marketing planning is aimed at satisfying customer needs better than competitors do, resulting in sales and profits. A company’s plan that identifies how it will use marketing to achieve its goals is called marketing strategy. Developing a marketing strategy is a two-step process.

The first step is to identify a target market. Since no organization can satisfy all consumer needs, it must concentrate its efforts on certain needs of a specific group of potential customers. This is the target market. One of the advantages of target marketing is the possibility of becoming the leader in a specific market segment. Market segmentation involves aggregating prospective buyers into groups that 1) have common needs and 2) will respond similarly to a marketing action. As a consumer you are exposed to marketing activities all of the time. You take part in many of those activities. You see or hear advertisements. You see the brand names of products on packages and on the clothes that you and your friends wear. You interact with salespeople in stores, etc. A great deal of marketing is not even aimed at final consumers. Businesses also market products and services to other businesses which then use them in their own business processes or sell them to final consumers. This is the so called business-to-business market (B2B).

The second step in developing a marketing strategy is to create a marketing mix. A marketing mix or 4 ps is the blending of four marketing elements. They are as follows:

Product: a good, a service, or an idea to satisfy the consumer’s needs;

Price: what is exchanged for a product;

Promotion: a means of communication between the seller and buyer;

Place: a means of getting the product into the consumer’s hands.

To increase the chances of developing a product or service that meets customer needs and can be sold at a profit, companies carry out a marketing research. Marketing research estimates the demand for specific products and services, describes the characteristics of probable customers, and measures potential sales. Marketing research studies people as buyers and sellers, examining their habits, attitudes, preferences, dislikes, and purchasing power and almost every aspect of the seller-buyer relationship. It also investigates distribution systems, pricing, promotion, product design, packaging, brand names, etc.

The steps in marketing research are the following:

  1. Define the marketing problem.

  2. Study the situation.

  3. Develop a data collection.

  4. Gather and analyze information.

  5. Propose a solution.

All marketing research studies involve gathering and analyzing information. A great deal of information about consumers and competitors is available to businesses without doing new studies. Analyzing existing information gathered for another purpose but used to solve a current problem is known as desk research or secondary research. Studies carried out to gather new information (primary data) specifically directed at a current problem are field research or current research. The most common types of marketing research are surveys, focus groups, observations, and experiments. Surveys gather information from people using a carefully planned set of questions. A focus group a (is a small group of consumers taking part in a group discussion of their experiences with a product or service. Observations collect information by recording the actions of consumers rather than asking them questions. An experiment presents two carefully controlled alternatives to subjects in order to determine which is preferred or has better results.

To implement a marketing program successfully, hundreds of detailed decisions are often required, such as writing an advertising copy or selecting the amount for temporary price reductions. These decisions, called marketing tactics, are detailed day-to-day operational decisions that must be taken right away.

Within the field of economics, two types of marketing are defined: micromarketing and macromarketing. The former describes the activities of individual firms, beginning with originating and producing products and ending when the products reach the final user, the customer. Macromarketing, by contrast, describes how the whole system of production and distribution works in a society. Marketing is not confined to profit-making companies that manufacture products. Doctors, lawyers, hospitals, colleges, museums, and other service enterprises also engage in marketing.

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