M A R K E T I N G

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M A R K E T I N G

Popular definitions of marketing describe it as the processes that lead organizations to produce and services that meet the needs of customers. Marketing strategies ar accomplished by designing a set of activities that “push” or “pull” a product or service to the consumer. These activities are frequently termed the Four P’s of marketing: product, price, place, and promotion. Owner-managers must develop a marketing mix that optimizes the revenues of the business while minimizing the expenses to the organization. Marketing activities can be divided into two categories: strategies that “pull” or lure the consumer; and strategies that “push” or put psychological pressure on the customer. Pricing and advertising are often described as pull strategies, and sales promotions and location can be thought of as push strategies.

In order to develop strategies that appeal to the potential consumers of a business. It is necessary to understand the needs and wants of that individuals. This can be accomplished through marketing research. Marketing research will assist in providing answers to such questions as: Who are my customers? What kind of people are they? Where do they live? What are they going to buy and under what circumstances are they going to buy? It will also provide pricing information, as well as feedback about the research of promotional programs.

Retailers frequently try to distinguish themselves from their competitors by segmenting their markets. Market segmentation involves determining the attributes of similar classes of products or services, establishing the potential buyers for those products and looking for a gap or niche that is unfilled. Once that segment is defined, the owner or manager of a business will need to develop an understanding of the needs, wants, and consumer buying behavior that leads to the purchase of a product by that segment. Occasionally , an owner-manager will choose to use a type of marketing strategy that attempts to reach all potential buyers for a particular class of products (known as broadcast strategies because of its wide appeal) This technique is used most frequently for convenience goods.

Locating the business in an area that reaches the desired market segment is a decision that make you accessible to your targeted customers. It must be determined which product line to be most attractive to the reach of the location. This may require market research on consumer buying behavior. For example, if the location is close to a manufacturing facility, work quality jeans and easily washable tops may be most attractive to potential customers. On the othar hand, university students may seek jeans that can be the primary garment in a wardrobe. To keep in mind that the product that is offered by the store should be consistent with the life-style needs of the customers who are most likely to shop there.

Establishing a price that optimizes revenues and sales volume. Pricing policy can range from barely covering the cost of the goods to such a high price that no one will buy the product. Prices can be set high to “skim the cream” off the market, thus providing the retailer with a higher level of unit profitability or they may be set low to penetrate the market and build sales volume.

Promoting a product is a major expense to any business, especially during the start-up period. Promotion includes advertising and sales promotions such as coupons, special displays, and bargain sales. In this simulation the term “sales promotions” are going to be used to describe those in-store activities employed to promote sales such as window displays and point-of-sale displays, as well as coupons, rebates, and other incentives. Most retail businesses use a combination of promotional activities to pull and push consumers into the store. Some of these include radio, TV, and newspaper, advertisements, shopping center flyers and flyers delivered to homes or sticked to the wipers of the cars in surrounding neighbourhoods. Once the consumer is attracted to the store, the sales force will be a major determinate in selling the product.

Most businesses use a combination of these media attract customers. There is no correct formula for a given business, and the effectiveness of specific promotional activities changes over time. For example during the start-up of a new business, the primary promotional activities are aimed at “pulling” potential customers into the store and then “pushing” them to buy. After the business has been operating for a period of time, the owner-manager may switch the promotional strategy to one that focuses on “pulling” in returning customers.

Marketing strategies must be continually evaluated for their effectiveness. One problem that faces many business owners-managers is to determine which of the marketing activities is most or least effective. Market research helps provide some of the answers. It can be as simple as surveying competitors determining their strategies or conducting a pencil-and-paper survey of customers; and as complex as hiring a market research company to perform elaborate consumer research. Some effective practitioners report they frequently rely on their intution to assist in planning and evaluating marketing strategies. Although this approach will not provide the quantifiable data that creates good controls for the small business, it is useful in providing additional data for a more effective promotional decision making.

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