Strongpreneur#Business Growth Strategies
April 22, 2019 298
Strongpreneur#Business Growth Strategies
April 22, 2019 298
Many individuals and organizations participate in performing the various marketing activities which we have just described. In spite of their large numbers, they can be classified into three broad categories; namely, producers, middlemen, and facilitators.
Also, we may include consumers, as a fourth category, among those who perform marketing functions, because sometimes they participate in the performance of marketing functions such as the transportation of the goods. They may also actively take part in financing the seller by paying in advance for goods or participate in pricing-fixing through haggling.
a) General Merchandise Wholesalers
b) Limited Line Wholesalers
c) Specialty Wholesalers
b) Commission Houses
c) Manufacturers agents
d) Selling agents
As the preceding discussion shows, marketing revolves around the consumer, obviously because every company needs his patronage in order to remain in business in the long run. The marketing concept expresses this simple idea that all activities of the business organization should be coordinated and oriented toward the satisfaction of the needs of the consumer, as a means of attaining organizational goals.
The concept suggests that the company should accept the following fundamental ideas in formulating and implementing its policies:
Since the concept was first articulated in the 1950s, Philip Kotler and his associates have broadened it by adding that marketing should not consider the needs of only its customers, but also the welfare of society. This broadened form of the concept is called the social or societal marketing concept.
The marketing concept is a relatively new philosophy, which was developed in the United States of America in the 1950s. Two business philosophies – the product orientation and a sales orientation – predated it.
A product orientation philosophy or concept rests on the premise that a well-engineered, well-manufactured, and fairly priced product can be sold easily, to achieve the company’s objectives. The sales orientation philosophy which succeeded the product orientation one rests on the notion that, with good selling techniques, any product can be sold.
The basic difference between these two earlier orientations, on one hand, and the marketing concept on the other is that while they focus on the needs of the seller, the marketing concept focuses on those of the buyer. Focusing on the needs of buyers is known as consumer orientation.
The marketing concept was developed in the western world, in the light of the experiences of business in that part of the globe. Although in developing countries, however, some people have questioned the relevance of the concept.
For instance, the expert has cautioned against its indiscriminate adoption in developing countries, because, in his view, its appropriateness is a function of:
In his opinion, the concept is not appropriate for consumer goods companies who operate in a sellers’ market, if they seek to maximize profits in the short run. It is no wonder, therefore, that the concept does not appear to have been adopted by many businessmen in Nigeria.
Whatever it’s conceptual and operationalization limitations, especially in developing countries, the marketing concept represents a useful model for achieving long-run consumer patronage and hence corporate goals.
Marketing, as we stressed earlier in our definition of the term, takes place within a dynamic environment. This environment impinges on the marketing of the organization’s goods and services. It consists of two main factors:
The significance of the internal marketing environment lies in the fact that, in making its decisions, the marketing department is constrained by the company’s personnel, financial, and production capacities and policies. However, top management can control this environment.
Although the external environment is outside the control of the marketer, it cannot be ignored. This is because changes in the environment can affect the availability of marketing input (e.g., marketing personnel), and the ability and willingness of marketing intermediaries and facilitators, to continue to patronize the company.
For these reasons, the marketing environment must be analyzed and predicted, so that the company can formulate its marketing plans accordingly. This is more so given the constantly changing nature of the environment, which may thus generate threats and opportunities to which the company must react quickly.
Marketing programs aim at coping with the internal and external marketing environment of the marketer. This involves the formulation of product, price, promotion and pricing policies and plans. These constitute the company’s marketing mix, which we shall examine in greater detail.
The term marketing mix is used to describe the combination of the four Ps – price, promotion, product, and place – which a company uses as a facet of its marketing strategy. These four Ps, alternatively called marketing decision variables, constitute the controllable variables in marketing. They are so-called because the company can manipulate them at will.
The unique ways in which the components of each of the four Ps are combined partly specify each company’s marketing strategy. It should be noted, however, that the selection of a marketing strategy also involves the choice of target markets, the choice of marketing objectives, and the scheduling of selected marketing actions, and the establishment of a marketing control system.
Identifies the decision areas for each variable.
The four Ps are examined below.
The term product is used in marketing to refer to what the company offers for sale. It consists not only of the tangible entity but also the bundle of services and other intangible or symbolic attributes that accompany it. These non-tangible attributes include the image of the product, and the pre-sale and the post-sale services which the company offers along with it, such as instructions for use, maintenance, and repairs. For example, a refrigerator includes the physical entity, the image that attaches to it, the guarantee, the instructions, and the accompanying repair and maintenance services.
It is usual to find companies that produce many products. A group of related products that are offered by a company is called the product line. For example, Lever Brothers have a variety of Tree Top fruit drinks made up of lime, orange, pineapple, grapefruit, and blackcurrant. These are related and together make up a product line. On the other hand, the whole array of products which a company offers for sale is called its product mix. Using Lever Brother as an example again, its product mix consists of soaps, non-soap detergents, toilet preparations, edible oil and fats, and fruit drinks. Each of these makes a product line, while all, taken together, make up the company’s product mix. The number of product lines in the company’s product mix makes up the breadth of the mix, while the depth refers to the number of product items in a product line. A product item is an individual product version or brand. For example, blackcurrant is a product item while Omo is another.
We can classify products into two broad categories – consumer and industrial products.
Products that the consumer buys so that he or his family may enjoy the benefits of satisfaction contained in it are called consumer goods. On the other hand, those which are bought for resale, or the production of other products for sale, are referred to as industrial products. A note of caution is necessary here.
Ordinarily, if you see a man on the street, you cannot tell whether he is a teacher, an engineer, or a farmer unless you find out what work he does. Similarly, a product cannot be classified as a consumer or an industrial product unless we inquire into the purpose for which it is bought.
A car, generator or table bought for household use is a consumer product. But the same car, generator or table bought for resale, or to aid the production of other products intended for sale, is an industrial product.
We may further classify consumer goods into convenience, shopping, and specialty products. Convenience Products are those which the consumer normally buys with minimal effort, without the inclination to compare prices from one shop to another. The purchase is routine, and the products are usually inexpensive and frequently bought. Examples are ball-point pens, bread, handkerchiefs, ice-cream, and milk. Shopping Goods are those for which the consumer puts forth considerable effort in buying. They are usually more durable and expensive than convenience products. Examples are shirts, suitcases and radio sets.
Finally, specialty products possess unique characteristics. Consumers spend a lot of time making up their minds on which type they want, plan meticulously for the purchase and are willing to spend considerable effort and time until they find the exact types they want. Examples are cars, furniture, and works of art. They are usually expensive.
Industrial goods may be classified into raw materials, equipment, accessories, component parts, services, and supplies.
Raw materials are goods which have not been processed at all, or which have been processed only to the extent necessary for convenient physical handling. They form part of the product. Examples are rubber lumps and sheets used in manufacturing tyres and tubes, and cotton used in making threads and textiles.
Major equipments are installations or major capital items such as power generating plants, bulldozers, and tractors they are usually expensive, infrequently bought, and are the main determinants of a firm’s production capacity.
Accessories are less expensive and have shorter lives than major equipment. Like major equipment, however, they do not form part of the finished product. Examples are typewriters, photocopy machines, and calculating machines.
Parts are finished or semi-finished items needing little processing. They form part of the finished products. Examples are clocks, light bulbs, and seat belts, which form part of a car.
Services are intangible products. Examples are management consulting, advertising, cleaning and legal services which firms make use of. Supplies are frequently purchased items, which are usually inexpensive and which do not form part of the finished products. Stationery and fuel are examples.
The above classification has significance for marketers since a company’s marketing strategy will depend partly on the nature of the product being offered for sale. For example, a company marketing tractors will be expected to have a different marketing strategy from one marketing chewing gums.
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