Principles of Marketing
Have you ever wondered how Apple, a computer company was able to create and launch the wildly successful iPod, but when Microsoft tried to venture into MP3 players it was a total disaster? This was despite Microsoft having more money to push the product into the market.
Marketing is the set of activities a company undertakes to promote and sell a product or service.
Any actions a company takes to attract an audience to the company's product or services through high-quality messaging comes and maintain relationships with them is called marketing.
The 4 Ps of Marketing
E Jerome McCarthy introduced the idea of the 4 Ps of marketing (also called marketing mix): product, price, place, promotion in the 1960s.
These 4 Ps explain how marketing interacts with the audience at each stage of the lifecycle.
The 4Ps are interrelated- the company must find the right combination of product, price, promotion, distribution and price to gain an advantage over its competitors.
The most important thing for any company is to have or make something that customers want to buy.
A product is the a bundle of attributes (features, functions, benefits, and uses) capable of delivering value to the customer in tangible or intangible ways.
The product might be in the form of physical goods or a service, or a combination.
To make a product successful, you need to step in the customer's shoes to understand their needs, decide the features of the product, determine differentiation from competing products and understand the USP (unique selling point). Most companies are started by people who get an idea about how to make something better than the currently alternative.
Some things that you need to keep in mind:
- Does the product add value for the customer?
- Is the product a vitamin or a painkiller (good-to-have or must-have)?
- Does it satisfy a market need?
- How quickly can the product be launched?
- Are customers willing to pay for it? How much will they pay?
- Will customers be willing to switch from the current product they use for this need?
- Can this product be profitable at some scale?
All the ways a company uses to build awareness for the product are known as promotion. It focuses on showing prospective customers the benefits of using your product.
Sometimes the communication could be around educating potential customers about the value of an offering, and sometimes it could mean making customers aware of the existence of the product and where they can find it.
Companies use many forms of promotion, including advertising online or on television, billboards and magazines, product placements in movies, sales people, news media coverage and event sponsorships etc.
Promotion focuses on getting customers to make a short-term purchase- often just a free sample or trial to get them hooked. Some of the most popular ways marketers use are coupons, discounts, special packaging, free trials, freemium plans etc.
Distribution refers to the act of bringing your products to customers. It is also used to describe the extent of market coverage for a given product.
The correct place to put your product is wherever your customers are. It could be a brick-and-mortar store or an online website. In today's age, a digital presence can make it easier to reach your potential customers irrespective of what the product is. The company also needs to make sure that the user understands how to get the most out of the product and how to reach out if they need help.
Often there are several ways to reach customers. Marketing must have a clear understanding of the types of distribution channels, of the trends influencing those channels, how those channels are perceived by customers, and customer preferences in general to have the best shot of catching the customer's eye.
The price is the amount you ask a customer to pay to acquire the product.
Marketers need to price their products in such a way that customers feel that they are receiving fair value. They also need to make sure that the product is profitable for the company.
There are multiple ways to approach pricing: cost based, market based, value based etc.
Some factors are:
- Does the customer have an alternative?
- How much do competing products charge?
- What is the value received by the customer from the product?
- How much is the customer willing to pay?
All of these components play an essential part in the marketing of a product.
At its heart, marketing takes a product or service, identifies ideal customers, and informs the customers about the existence of the product and its benefits.