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MARKETING CONCEPT AND MARKETING MIX
Marketing concept is the idea or belief that consumers/customers should be treated as a king. The interest and desires of consumers must be taken into consideration by bringing out products or any business activities. The basic idea behind the marketing concept is consumer orientation. That is, the consumer must have this in mind while planning. It is assumed that consumers are always right i.e. “consumer sovereignty”.
Marketing concept involves these fundamental propositions.
- Consumer Needs: ask the consumer about his needs.
- Product development: Development of products to suit the need of the consumers.
- Planning and organization: Planning and organizing marketing programmed to bring the product to the consumers
- Post sales activities: Carry out post sales activities that will ensure the products are satisfactory to the consumers
MARKETING MIX
This is a collection of controllable factors that can be used to influence the behavior of consumers. It is a combination of controllable variables such as product, price, distribution, place and promotion which spells out the marketers’ strategy to satisfy the needs of the consumers and to increase the sales of the goods.
ELEMENTS OF MARKETING MIX
- Product: This is the goods and services offered for sale. It deals with the product features, packaging, labeling and quality of the product.
- Price : This is the value placed on a product. It consists of the price level, discounts and payment terms
- Promotion: This is concerned with informing customers of product features and persuading them to buy the product. It consists of advertising, sales promotion, personal selling and public relations.
- Place: this is concerned with putting the right quantity of product in the right location at the appropriate time. It consists of the market average, channels of distribution, inventory planning, physical distribution and transport.
MARKETING MIX
PRODUCT MIX: A product mix may be defined as a bundle of physical and psychological satisfaction that a buyer receives from a purchase e.g sugar. It can be an idea, goods or service.
Products fall into two categories
- Consumer product: Products purchased to satisfy individual or family needs e.g. shoes
- Industrial product: products bought for the use of production of other products by the firm.
PRICE MIX: This is the placing of price on a particular product that will suit the customers and fetch higher revenue to the manufacturer. The components of price mix are discounts, margins, freights, payments, credit terms, allowances, make-up, setting base price
BASIC PRICING POLICIES
- Market penetration: the price of the product is low in order to penetrate the market. This is good for new product
- Market skimming: High prices are set in other to make high profit and to appeal to the more affluent segment of the market
- Target return pricing : This is aimed at securing in a given period of time a predetermined rate of returns on investment
- Product line pricing: Some products are made less leaders i.e. loss leaders products are basically non-profitable but they stimulate buying of other profitable lines.
- Variable pricing : e.g. soft drinks, fruits and cold water may be high price during the dry season and low in the rainy season
- Bid pricing: This policy is used when contracts are awarded as a result of tender.
- Pricing with the market leader: A new company entering into market will have to follow the price levels set by old companies in the industry.
- Pricing above the market: Under this policy, a firm will charge prices that are higher than those of the competing firms.
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