It’s good to be with you all again. This lesson begins a new section of the syllabus: marketing. We will distinguish between the terms marketing and market, look at marketing activities and describe the marketing mix. The lesson will conclude with a look at market research.
What is a market?
A market exists under any conditions where buyers and sellers are in contact directly or indirectly for the purpose of exchanging goods and services. The four elements of the market are buyers, sellers, goods and services, and price. If any of the elements is removed, then the market will not exist.
The term market is also used to describe the extent of the demand for a commodity. Hence, a large market means that there is a large demand for the good or service.
What is marketing?
Marketing refers to the set of human activities and efforts which is interrelated and focused on bringing the goods and services to the consumer. It has to do with getting the right goods to the right people at the right price and at the right time in the most profitable and efficient manner.
These include market research, pricing, packaging, branding, sales promotion, advertising and distribution.
The marketing mix
This refers to everything a firm can do to influence the demand for the product. It is a collective term that is used to refer to the whole range of marketing activities, techniques and strategies that a firm uses to reach its target market.
The variables of the marketing mix can easily be remembered by referring to the four Ps: product, price, place and promotion.
- Product – The good or service that the consumer wants.
- Price – Profit is usually incorporated in the price.
- Place – Product must reach the place where the good or service is required for distribution.
- Promotion – This refers to the ways in which consumers are made aware of the availability of the product or service and the qualities it has. Advertising is the most dynamic aspect of product promotion.
Market research Concept
The marketing concept requires that a firm be aware of customers’ needs to try to meet those needs and to attempt to make a profit in the process.
Market research assists the firm to meet the goal of the marketing concept by helping the process of finding out what the consumer wants.
Market research investigates what consumers are buying or are likely to buy in the future. It is normally done before the advertising campaign. Sometimes, it is carried out after the product is well established in order to assess and improve advertising and evaluate product performance.
Reasons for conducting market research
Market research will help in making decisions about:
- where to sell a good or service.
- how to sell it.
- consumer tastes – that is which customers need the product and exactly what they want and what they dislike
- how to price the product.
- how to promote the product.
- competition – who are the competitors in the market place and what they are doing.
- what the size of the market is.
- consumer behaviour – how consumers will react to certain conditions or when faced with certain factors.
In other words, market research helps us to see what influences the consumer.
Market research refers to a systematic approach to collecting information, recording and analysing information collected and adopting the information to the marketing plan of the business.
Market research includes the following types of research:
- Advertising or media research
This is research to see the best means of advertising at the lowest cost. It can also be done after the advertising campaign to test how successful the campaign was in terms of increasing market share.
- Business and economic research
This is done to study the trends in business, prices and location of plants and distribution centres. It also studies the changing economic conditions which affect the business.
- Product research
This tests how consumers will accept new products or changes in existing products.
- Distribution research
This is used to look at the effectiveness of the channels of distribution of the product.
- Packaging research
Used to test the design, colour and other physical features of the package
- Sales research
This tests the potential size and make-up of the target market in terms of age, sex income, etc.
- Consumer research
Used to find out why consumers prefer some goods and services to others and to research the size of the market. It also involves research to see if there are any changes in people’s incomes, tastes or brand loyalty.
That’s it for today. Keep safe until next week when I will continue with topics related to marketing. Bye for now.
Factors that Influence Consumer Behaviour
Consumers will adjust their demand for particular goods and services as the prices of them change. Generally speaking, the lower the price, the greater the quantity demanded.
- Price of substitutes
If the price of substitutes is lower, then consumers will switch from the relatively dearer goods and services to the relatively cheaper goods and services.
Consumers will gravitate towards the better quality products and may even be willing to pay more for them.
People differ in their preferences for goods and services, so the marketer has to identify these preferences.
Long-standing traditions and customs may influence demand. For example, some households purchase Grace products because their mothers and grandmothers purchased this brand and they see no reason to stop.
The amount of money earned affects one’s ability to purchase goods and services, therefore, some highly priced goods and services will only be purchased by the higher-paid wage earners.
- Spending patterns
Some consumers are accustomed to spending a certain amount of money. If prices fall, they may not spend any on those goods and services, because they have already established a pattern of spending which they are not willing to change.
- Brand loyalty
Marketers often try to create loyalty for their products among consumers. The hope is that the customer will stay with their existing product because it has satisfied them for sometime.
Customers who are loyal to certain brands cannot be easily wooed or enticed away from these products since they are satisfied with them.