Term Paper on "Marketing Mix Is a Model of Crafting"

Term Paper 5 pages (1928 words) Sources: 3 Style: APA

[EXCERPT] . . . .

marketing mix is a model of crafting and implementing marketing strategies and elements that improve the efficiency of the selling process. The model was developed by Neil Borden (Borden, N. 1964) who first started using the phrase in 1949 and it stresses the "mixing" or blending of various factors in such a way that both organizational and consumer are attained.

In order to meet markets' needs a business must develop products that satisfy customers, establish the right price, get the goods to the right place, and it must make the product known through promotion; this process represents the marketing mix, witch is often referred to as the "4 Ps," meaning product, price, place and promotion. The marketing mix concept is very simple and it reveals the fact that a successful company must be customer oriented, must understand customers' needs and wants. Specialists underline that we should understand that there is a major difference between marketing and selling. The selling process focuses on products and has as an ending goal profits from sales volume, achieved by promoting and hyping; on the other hand, the marketing process focuses on users' needs, having as an ending goal profits from satisfied customers, achieved by planning and marketing mix.

Product

Products must meet customer requirements whatever these might be and products should do what they say they can do and what they are expected to do. For example, Ford cars are popular and became classics because of their mass appeal and general high quality. Headed by Henry Ford, Ford Company entered the automotive manufacturing business on June 16, 1903 and now it is considered to be one of the largest automobile manufacturer in the world, delivering dependable and classy line of automobiles. Ford has produced their models with comfortable and luxurious features, offering something that will complement most of peoples' lifestyles and preferences. The appearance of the product is also very important, and people pay also important prices for this aspect.

Marketing specialists consider that a good product makes its marketing by itself because it gives benefits to the customer and because it offers a differentiation consisting in: design (it can be a decisive advantage), packaging (it provides a better appearance and a convenient use), safety, "green" element (a friendly product to environment gets an advantage among some segments). The Ford Company has understood very well these concepts, and has permanently improved its products, delivering cars that are exciting to look at, and in the same time, cars that are comfortable and exciting to drive, cars that have constantly changed their features, in accordance with customers' demands. Ford had to face the European competition witch was creating new products, while Ford was confronting high costs due to excess capacity and a crucial weakness in diesel engine technology. Ford had to reorganize its European management structure, to develop new models, to improve its position in diesel engine technology and transmissions and, finally, Ford achieved the development of its Premier Automotive Group.

Without fail, understanding a product and the reasons why this product would be the most important factor to a client will help a company to promote it to potential clients more effectively, because it will be able to promote some special features like a new design, quality, guarantee or safety.

A good marketing manager will be interested in knowing what need the product addresses, engineers would think in terms of its functional specifications, manufacturing people will be thinking about how to make it, the accounting group will be wondering what it costs to make (or buy) and marketing people would think more in terms of its features and benefits. This is the main reason for which "product" is an important part of the marketing mix, because marketing specialists have to discover those features and benefits that make a product different from others, features that have a great importance because they influence the selling process and help specialist to identify and quantify the target.

Price

Price is the one of the aspects of the marketing mix which creates sales revenue (all the others are costs), representing a direct determinant of the value of sales made; an organisation's pricing policy will vary according to time and circumstances. Researching consumers' opinions about pricing is important as it indicates how they value what they are looking for as well as what they want to pay, and, as a result, price is really determined by the discovery of what customers perceive is the value of the item on sale.

The price reflects the image of the product. For example, upmarket products are associated with premium prices. People are willing to pay more if they now they will get a good product, with features that respond to their needs and make their life easier.

There are a number pricing techniques to choose from:

1. Cost-plus pricing. A common way to make pricing decisions is to calculate how much it costs to do a particular job or activity, and then add on a given percentage as a return for the job or activity.

2. Hour-based pricing. Many small businesses are able to work out what their typical costs are for every hour of work they do and they charge a standard rate per hour.

3. Penetration pricing. When a firm brings out a new product into a new or existing market, it may feel that it needs to make a lot of sales very quickly in order to establish itself and to make it possible to produce larger quantities. It may therefore start off by offering the product at quite a low price. When market penetration has been achieved, prices can be raised.

4. Skimming. When you bring out a new product, you may be able to start off by charging quite a high price. Some customers may want to be the first to buy your product because of the prestige of being seen with it, or because they want to be associated with your product before anyone else.

Ford products are priced to take production costs into account, allow a margin for profit and, in the same time, to compete with other products from other suppliers, because competition is very intense in the market. The motor vehicle market advertises very often on price, but the price is established after a long process, considering the customer profile and the target on the market. Undoubtedly, the price is an important factor that influences customers, but, in the same time, it influences the image of the product and of the entire company.

Place

Placement if the product is crucial. Given this argument, defining a channel strategy is not simply an arbitrary matter. There are often many paths which a product can take: middlemen, agents, shops, stores - these are called the channels of distribution; in essence, all these places and people must be in partnership with the company.

Specialists consider that there are two methods in the distribution of products process: conventional distribution or a vertical marketing system. In the conventional distribution channel, there can be one or more independent product manufacturers, wholesalers, and retailers in a channel; the vertical marketing system requires that producers, wholesalers, and retailers to work together to avoid channel conflicts. Ford has chosen the vertical marketing, establishing an image that all the Ford show-rooms in the world should try to develop. Ford Company, a global automotive industry leader, manufactures and distributes automobiles in 200 markets across six continents, having about 300,000 employees and 108 plants worldwide. Ford has one of the largest dealership networks in Europe, and every location has been strategically planned in order to have a good coverage and to be as close as possible to every customer.

Promotion

Promotion is considered to be a communication process that takes place between a business and its various publics (individuals and organizations that have an interest in what the business produces and offers for sale).

In general, specialists consider that there some basic promotion tools: advertising, event marketing, online marketing, sales promotion, public relations, personal selling, alliances, and each of them has its own advantages.

These tools can be implemented using television, radio, newspapers, posters, billboards, brochures, flyers, or the Internet. In order to choose the appropriate channel, the firm must identify the target audience and discover what the targets' media preferences are. It is very important to understand that the function of promotion is to affect the customer behavior in order to close a sale and this is why the message must: get attraction, capture interest, create desire and finally require action that is to say close the sale.

Promotion is also divided into "above-the-line" promotion that is directly paid for and "below-the-line" promotion. Ford's promotional strategy covers all of Europe and television represents the main above-the-line promotion, because it combines two important elements in the advertisement - sound and image.

Conclusion

The bottom line is that firms want to make their business profitable and a business can become profitable if it meets some important conditions:… READ MORE

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