The following are features of marketing:
- Product. This is anything that satisfies a need or a want and may take various forms:
- Physical product
- Person (as a service provider) etc.
- Needs. This is what one cannot do without
- Wants. Things that are optional or can afford
- Demand. This is a want for a specific product that is backed by a willingness and ability to purchase.
- Market. Consists of potential consumers sharing a particular need or want.
Before any business can venture into any market, they need to look at factors that might affect their market. This is referred to as Market Environment Scanning and is divided into two broad dimensions:
Micromarketing environment. These are factors that are internal and directly controllable by the business. They include:
- The line of the business
- The overall objective
- Marketing intermediaries that help the business promote, sell, and distribute its products, etc.
Macromarketing environment. These are factors beyond the business’ control and often provide opportunities or pose threats to the business. They are:
Competitive Forces Model
For every product or service that is offered, other businesses offer the same. A business that wants to stand above its peers must employ Porter’s five forces of competitive positioning tool. The forces are:
- The threat of entry– Any product or service that is performing well will always attract new entrants, who in turn erode profits for the already existing businesses. To mitigate this, the existing businesses need to employ barriers like economies of scale or patenting their products or service.
- The threat of substitute products or services– Where one product can be used instead of the other. This will cause the demand for the initial product or service to decline. Here, a business can decide to lower its prices.
- Power of buyers– How they can easily drive down prices e.g., by switching to alternatives
- Power of supplier– How they can increase prices. This can be through hoarding etc.
- Intense rivalry– Often, when a product is homogenous, tactical moves are employed by competitors to outdo each other. If there are many competitors, this will reduce the market’s attractiveness.
Elements of a marketing mix
- Segmentation. This refers to how a business divides its market and targets a specific group.
- Targeting. This refers to the business focusing on a set of buyers who share common needs and characteristics.
- Positioning. Refers to having their products clearly defined, and benefits derived from them.
Importance of marketing
- Maintaining a long-lasting relationship between the business and its consumers.
- Source of information on the changing needs of the consumers.
- Build a good reputation.
- Helps the management in decision-making about a certain product.
- Boost sales etc.
Without marketing, no business can survive!