Major Marketing Concepts an Entrepreneur Should Know

admin

By: Site Engineer, Staff

full bio

In this article, the entrepreneur will be exposed to concepts of marketing to enable him to know what the concept is, what marketing is, in addition to the – four Ps of marketing: pricing, product, place (distribution) and promotion.

The major aim of an entrepreneur is to develop a product, get the product down to the consumer by making the product down to the consumer through a promotion at a given good price.

The entrepreneur has a lot of problems at his hand. He initiates a product into a commercial stage and makes sure that the product gets to the consumer.

In trying to influence the consumer’s responses towards his products, the entrepreneur uses some variables. These are a product, price place (distribution) and promotion.

An effective entrepreneur should have firm control of each element of the variables called the marketing mix otherwise his effectiveness would be in doubt.

What is Marketing

According to American Marketing Association 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. It encompasses a wide range of activities.

In most large organizations, each division has its own marketing department, coordinated by specialists. Some of them conduct research to determine what consumers want to buy; some use that research to design new products and services; others make decisions on how to price the firm’s offerings; still others handle the transportation, storage, and distribution of the goods and, finally, some are responsible for advertisings promotion, publicity, and personal selling. Marketing is involved in all decisions related to determining a product’s characteristics, price, production quantities, market entry date, sales, and services.

Although, we generally think of marketing in connection with selling tangible products for profit, but also involve services and ideas as well. Social activities, religious leaders, politicians, universities, and charities of types rely on the principles of marketing to “sell” themselves and their causes to the public. When the term “product” appears here, it refers to both goods and services.

The Reality of Need and Wants

Think about what you really need: water, shelter, clothing, companionship, affection, knowledge and achievement.

Needs

They are very basic things that are essential to your physical, psychological, and social well-being. When your needs are not met, you feel deprived and are highly motivated to change the situation.

Wants

They are based on your needs, but they are more specific. When you are hungry, you need food, but you may want rice and beans or jollof rice, depending on your experiences, your culture and individual personality.

Producers do not create needs, but they do shape your wants to exposing you to alternatives. If the producers are accurate in assessing your wants and needs, they will provide the products and services that are most satisfying to you.

The Marketing Mix Variables

As you make decisions about how to satisfy your customers, you are creating a marketing mix and as well as creating features that differentiate your store from others and make it more appealing to your target customers.

The marketing mix is a combination of four major ingredients:

  • Product (ideas, goods, or services),
  • Price,
  • Place (distribution), and
  • Promotion.

These are regarded as the four Ps – to respond to the needs of the intended customers.

Product

The entrepreneur’s first marketing task is to make a decision on the goods or services that will attract customers. The key is to determine those customers’ needs and wants and then translate them into desirable products.

1. Decision Area: Product

  • The Product: The setting of tangible and intangible attributes of the goods, service, person, or idea that is being exchanged.
  • Brand Name: Words, letters or members that may be spoken.
  • Warranty: A manufacturer’s promise that product is fit for the purpose for which it is intended.
  • Packaging: The activities that involve designing and producing the container or wrapper for a product.
  • Services: Activities, benefits, or satisfaction that are offered for sale or are provided in connection with the sale of goods.

2. Decision Area: Price

  • Pricing: Activities concerned with setting the price of a product.
  • Discount: A reduction from the asked price of a product.

3. Decision Area: Place (Distribution)

  • Channels of Distribution: The route taken by a product as it moves from the producer to the final consumer.
  • Physical Distribution: The physical movement of goods from the point of production to the point of consumption.

4. Decision Area: Promotion

  • Personal Selling: Person-to-person communication between a marketer and members of the market.
  • Advertising: Non-personal connection that is paid for by an identified marketer to promote a product.
  • Sales Promotion: Promotional activities other than advertising, personal selling, and publicity that stimulate consumer purchases and dealer effectiveness.
  • Public Relations: Any communication created primarily to build prestige or good-will for an individual or an organization.

Social trends usually provide a clue to the types of products that consumer will want. Rising crime rates, for example, have created a growing need among small businesses for security services. Similarly, the rapid increase in the number of working women has inspired clothing manufacturers to produce more high priced corporate women’s suites.

Price

The moment the basic decisions are made about products, the company must decide on how to price them. The entrepreneur will be very careful here because of the sensitivity of the society’s response. For instance, a higher price above the competitor’s price takes the product out of the market whereas a lower price may make some customer to perceive the product as being inferior.

Place

The third element in the marketing mix is a place (or distribution); how products get to customers. Transportation comes into play here also, but place entails decisions about distribution outlets. The entrepreneur must select the middlemen (wholesalers and retailers) that would assist him in getting the goods and services to the final consumers.

Promotion

The most important decision a company makes is how it should inform prospective customers about its products. The alternatives are many, and the choice may determine the success of a marketing effort. Some companies emphasize on direct selling, hence use salespeople in doing the job. Others, including the many producers of cloth, promote their products through advertising mainly on television or local newspapers.

The entrepreneur is therefore advised to adopt the promotion method that will help him get his consumers convinced.

The right decisions about product, price, place, and promotion yield the marketing mix that best meets the needs of the customers.

Functions of Marketing

It is necessary that the entrepreneur knows the functions of marketing and this places him in a position of making those functions suitable for his company’s objectives.

Some of these functions are:

(i)         Assembling and Buying

Assembling means a collection of goods from many sources. This is one of the first steps in marketing.

On the other hand, buying involves all those activities that pertain to:

  • Careful determination of needs for the goods to be bought,
  • Selection of sources of supply,
  • The determination of quality and suitability of goods to buy an agreement on prices and terms of purchases such as date of shipping or delivery of goods bought.

(ii)        Storing

Manufacturers must store their products awaiting orders from wholesalers. Storing goods is a necessary activity in marketing. Retailers equally store goods for their consumers.

(iii)       Grading and Standardizing

There is some difference between grading and standardizing.

  • Grading: This is the actual sorting of a supply of a given commodity according to the established grades. The example includes rice into the long or short grain, eggs into jumbo, large and small, meat into lean, fat and bony.
  • Standardization: This describes the uniform quality, quantity, type, weight and size of a product. Products are standardized to prevent them from being adulterated. Some products are described so accurately and sellers can rely on standardization when ordering the product. For example, when ordering the buyer can say buy me the 100-watt light bulbs or 14-inch television set and so on.

(iv)       Selling and Advertising

It involves the act of attracting buyer’s attention, developing his interest, creating or intensifying his desire and persuading or getting him to take action. On the other hand, advertising is used to stimulate demand. Selling involves title transfer.

The entrepreneur can do this by buying advertising space in newspapers and magazines, buying time on radios and televisions or other media to tell consumers about his goods. By this method, consumers are influenced to buy their goods or services.

(v)        Market Information

The need for market information exists before a product is sold and continues after the sale has been made. However, market information can come through many sources such as consumers’ suggestions, market studies, newspapers, trade papers, government publications, and personal observation sometimes.

(vi)       Transportation

When goods are sold and transferred from manufacturer to wholesaler to retailer and from retailer to consumer, transportation is involved. Transportation can be done by vehicles, canoes, ship, trucks, and railways.

(vii)      Financing

When goods are produced, they are financed. The producer who buys the rice or maize, the wholesaler who buys from the maize producer and the retailer who buys from the wholesaler will all finance their purchases through the marketing process.

(viii)     Risk Taking

Generally, many of the risks that affect business operations arise from external factors over which the business has no control. The entire marketing process is full of risks such as:

  • Personal risks, e.g., illness, injury, and death.
  • Dishonest risks, e.g., embezzlement, robbery theft, breach of contract, bad debts and price manipulation.
  • Price risks, e.g., the decline in the price of goods ordered in advance.

Business risks, e.g., liability for damages, inadequate suppliers, change in money value, delays and loss of customers.

 

Don’t forget to share this post!

share:
Whatsapp Share Icon