Marketing: Steps And Elements Of The Process

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Marketing is the process of identifying customer needs in a market and creating products that satisfy those needs. By doing this successfully businesses will generate profits. Marketing is not a one-off activity, it has to be ongoing as customer needs and markets are always changing. There are several different aspects to marketing and a business that wants to effectively market itself should undertake all the steps.

1. Market Research

This involves gathering information about the size and growth of a market and the level of competition within that market. This helps firms to understand both their position within the current market and how the market is changing over time.

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Example. Looking at changing sales figures for a business’s own products over a period of time.

2. Customer Profiling

Customer profiling is about creating the fullest and most detailed picture of a business’s customers. The profile should take into account: age, gender, income, likes and dislikes, sports, hobbies, where they live, personality type, hobbies, and interests.

Example. The main customers of the company are small businesses local to Manchester.

3. Targeting

Targeting is when a specific group of customers, defined by their profile is targeted by a business. This works best if the target group is very well defined: it does not mean that the firm will not sell to customers outside of its target market.

Example. Magazines are a good example of how individuals are targeted according to their hobbies, interest, and lifestyles.

4. Advertising and Promotion

Advertising is paid for communications from the business to the customer. A range of different media can be used for advertising: TV, magazines, radio, leaflets, technology, or posters. Promotion involves distributing information about products to others who then promote them –many magazines have review sections where they “test” and talk about a product. Promotion is a form of advertising.

Example. Advertising in craft magazines, attending a business-to-business meeting at the Manchester Chamber of Commerce, putting an advertisement on the Chamber of Commerce website.

5. Pricing

Firms use different approaches to setting the price of their product or service.

  • A business may work out the costs of production – fixed and variable costs and then add either a percentage or fixed amount as a mark-up.
  • A business may take into account what they think the customers are willing to pay
  • A business may set the price about what its competitors are charging.
  • Alternatively, a business may take a more strategic view of where it wants to be in the market. There are different types of strategic pricing strategies: Price skimming is a strategy in which a firm charges the highest initial price that customers will pay. Examples of this are new games for PS4 or X box. As the demand of the first customers is satisfied, the firm lowers the price to attract another, more price-sensitive segment; Penetration pricing is the tactic of offering a low price for a new product or service during its initial offering to attract customers away from competitors. Examples would include the launch of a new type of chocolate bar, where consumers must be persuaded away from their existing choices.

6. Public Relations (PR) and Managing social media

PR is the careful management of communications between the business and customers. With the growth of social media, businesses must have a presence on social media, however, it is equally important that they manage what is being said about them.

Example. Creating a press release about a special aspect of the company, e.g. the business has been printing on their site for over 60 years.

Market Segmentation means breaking the total market down into different segments. In each segment, the customers will have the same characteristics. There is a range of such characteristics that can be used to divide a market. Three of the main headings are:

  • Geographical segmentation is when a business divides its market according to geography. This can be done by areas, such as cities, counties, regions, or countries. A market can also be divided into rural, suburban, and urban areas.
  • Demographic segmentation is dividing the market according to age, race, religion, gender, family size, ethnicity, income, and education.
  • Socioeconomic segmentation is dividing the market according to characteristics such as income, occupation, and education.

Examples of segmentation relevant to CDP are:

Geographical, the vast majority of the customers live or are near to where the business is based in Manchester.

Demographic, most of the customers of the printing business are male and middle-aged. Whilst customers of the design service come from a wider demographic they tend to share the same socioeconomic group.

Socioeconomic, most customers of the design service manage or are setting up new businesses. They or their business have relatively high disposable income.

The marketing mix is the process of combining the main elements of marketing together in a way that best suits the market segment that the business is targeting. The main elements are the 4Ps; Product, Price, Place, and Promotion.

  • Product. A business must have the product that consumers want to buy; it is why it is important to undertake market research to fully understand how the characteristics of a product meet the wants and needs of customers. Plus how it is different from a competitor’s product. Furthermore, demand for a product changes over time and so there is a life cycle for each product. A successful business will have a mix of products at different stages of the life cycle. The key question that a marketing department has to ask is: “What can I do to offer a better product than other firms in this market”.

CDP has two distinct products. Firstly printed materials. Most of this output now takes the form of promotional leaflets; the volume of printing has declined in recent years. Leaflets are a non-differentiated product, the final output will look the same regardless of who printed it. Secondly, in a design service, where the designs are sold to larger companies, the number of design commissions is growing year by year. The product is highly differentiated; designs produced by different designers will look very different

  • Price. The price the customer is asked to pay is possibly the most important element of the marketing mix. Changing the price of a product directly impacts the demand and sales revenue of the product. Furthermore, the price can also affect the customer’s perceptions of the product. A price lower than one charged by a competitor means an inferior product in the eyes of some consumers.

The market for printed materials is very price-sensitive, so there is little scope for increasing prices: customers would be most likely to move to another printer. In contrast, the prices charged for design work are less price sensitive.

  • Place. Where the products are sold or how they are distributed to customers is an important part of the marketing mix. The product must be easily and conveniently available for customers.

Nearly all the printed output is for businesses in the Manchester area. It is either delivered to the customer, for a small additional charge or collected from the printing shop. In contrast commissions for designs are coming from a diverse range of companies and individuals, many from the Manchester region but also from across the UK and even two from Holland and Belgium. Recently several designs have been produced for small craft companies. The design proofs are either sent electronically or by courier.

  • Promotion. Promotion includes advertising and is paid for communication and PR which are typically not paid for communications such as press releases, exhibitions, or events. One of the best forms of promotion is word of mouth, where current customers tell others about the product, either directly or through social media. This is why managing a business’s social media reputation is important

Most of the printing jobs are now repeat business, customers who have used the firm for many years. CDP pays to be listed in Yellow Pages and the past it printed a calendar, with the company name that was sent out to names on a mailing list. Other than that, the printing side of the company no longer advertises or promotes itself. To begin with the designer side of the business paid for advertisements in the house magazine of the Manchester Chamber of Commerce. This generated some work and they still attend monthly meetings of the Chamber where they meet and socialize with other local businesses owners.

The 4Ps have been summarised as: “Putting the right product in the right place, at the right price, at the right time”. No one element is more important than the other, each element combines to make a product different from a competitor’s products. The way the marketing mix is combined makes the Unique Selling Point USB for the product and helps differentiate it. 

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