Theodore Levitt, marketing expert

Text A. What is marketing?

Marketing is the term given to all the different activities intended to make and attract a profitable demand for a product. On the one hand, it is made up of transporting, storing and selling goods and, on the other hand, a series of decisions you make during the process of moving goods from producer to user. Marketing operations include product planning, buying, storage, pricing, promotion, selling, credit, and market research.

Here people mostly talk about the marketing mix or 'The Four Ps’, that consists of:

choosing the right product (what a company produces/ makes or offers);

selling it at the right price (what it costs to the buyer / consumer);

using the right kind of promotion (the ways to make the product popular and well-known; this includes advertising);

making it available in the right place (where you sell the product and how it reaches the соnsumer; also known as distribution).

Marketing people's job is to match these things to the needs of consumers (the people who buy and use products). People who buy the products of a particular company are that company's customers/clients.

The ability to recognize early trends is very important. Market research helps the producer to predict what the people will want. And through the advertising he attempts to influence the customer to buy.

 

THE MARKETING CONCEPT

(we must produce what customers want, not what we want to produce)

 

this means that we

PUT THE CUSTOMER FIRST

(we organize the company so that this happens)

we must FIND OUT WHAT

THE CUSTOMER WANTS

(we carry out market research)

 

we must SUPPLY exactly what the

customer wants

we can do this by offering the right MARKETING MIX:

'The Four Ps'

the right PRODUCT

at the right PRICE

available through the right channels of distribution: PLACE

presented in the right way: PROMOTION

Text B. The four Ps

PRODUCT -the goods or the service that you are marketing. A 'product' is not just a collection of components. A 'total product' includes the image of the product, its design, quality and reliability – as well as its features and benefits. In marketing terms, political candidates and non-profit-making public services are also 'products' that people must be persuaded to 'buy' and which have to be 'presented and packaged' attractively. Products have a life-cycle, and companies are continually developing new products to replace products which sales are declining and coming to the end of their lives.

PRICE -making it easy for the customer to buy the product.

Pricing takes account of the value of a product and its quality, the ability of the customer to pay, the volume of sales required, and the prices charged by the competition. Too low a price can reduce the number of sales just as significantly as too high a price. A low price may increase sales but not as profitably as fixing a high, yet still popular, price.

As fixed costs stay fixed whatever the volume of sales, there is usually no such thing as a 'profit margin' on any single product.

PLACE - getting the product to the customer.

Decisions have to be made about the channels of distribution and delivery arrangements. Retail products may go through various channels of distribution:

1. Producer → end-users (the product is sold directly to the end-user by the company's sales force, direct response advertising or direct mail (mail order).

Producer → retailers → end-users.

Producer → wholesalers / agents →retailers → end-users.

Producer → wholesalers → directly to end-users.

Producer →multiple store groups / department stores / mail order houses → end-users.

Producer → market → wholesalers / retailers →end-users.

Each stage must add value to the product to justify the costs: the person in the middle is not normally someone who just takes their 'cut' but someone whose own sales force and delivery system can make the product available to the largest number customers more easily and cost – effectively. One principle behind this is 'breaking down the bulk': the producer may sell in minimum quantities of, say 10,000 the whole seller, who sells in minimum quantities of 100 to the retailer, who sells in minimum quantities of 1 to the end-user. A confectionary manufacturer doesn't deliver individual bars of chocolate to consumers: distribution is done through wholesale; and then retailers who each "add value” to the product by providing a good service to their customers and stocking a wide rangeof similar products.

PROMOTION -presenting the product to the customer.

Promotion involves the packaging presentation of the product, its image, the product’s brand name, advertising andslogans, brochures, literature, price lists, after-sales service and training, trade exhibitions or fairs, public relations, publicity and personal selling. Every product must possess a 'unique selling proposition'(USP) – the features andbenefits that make it unlike any other product in its market.