4.1 The Role of Marketing

Definition and Nature

Any business caters to Needs or Wants of customers and Marketing exists to address such needs or wants of customers.

• Needs are products and services that are necessary to human survival such as food, water and shelter

• Wants are products and services that are not always needed for human survival and growth but is use for entertainment, pleasure and desire of a human. These range from technological products to beauty services.

The nature of Marketing is to research into the particular reasons that a customer would purchase the product or service, these reasons can range from price to the features included to aesthetic reasons. Business rely on marketing to reach out to customers and inform them of their product or service.

What is the Market?

A market, by definition, is a place or process whereby customers and suppliers make a trade. A market can only exist when there is a demand for a particular product or service, and of course a business willing to provide for that product or service.

What are the different types of Markets?

• Consumer Market = The market that caters to the general public such as clothing, technology or automobiles

  • • Cater for private individuals. Pertains to buyers who purchase goods and services for consumption rather than resale.

• Industrial Market = The market that caters to organizations such as businesses or governments

  • • The marketing of goods and services by one business to another.

• Niche Market = The market that caters to very specific and specialized products or services

• Producer Market: Producers buy goods and services and transform them into a sellable product, which they sell to their customers for the purpose of making a profit.

Four Main Objectives:

1. Ensure that the right products are supplied to fill the needs and wants of the customers

2. Set the price appropriately for a wide range of customers to be able to purchase it

(Also ensure that the price is better than any competitors)

3. Distribution of products must suit a wide range of customers for convenience

4. Ensure that there is sufficient and effective promotion or marketing of the product/service

Marketing's Relationship with Business

Finance

• The Finance department must set budgets for the whole company, and due to the marketing department's ever-changing costs (usually fluctuating with the importance of the products launch), the Finance department must ensure that the marketing department has enough budget to execute their duties effectively.

• Marketing departments in this day and age must innovate their strategies towards more Above The Line methods due to the far-reaching presence of digital media, and so the Finance department must take into account the marketing departments wishes to exceed their original budget in order to gain maximum market exposure.

• There may be issues and conflicts between Finance and Marketing departments such as:

  • • Exceeded budgets due to innovations or over-commercialization

    • Finance wishing to price certain products or services high enough to gain profit, but the marketing department would rather keep the price low in order to gain an advantage in market penetration

      • (low prices = more customers willing to purchase the product/service)

    • Marketing may wish to offer extended credit packages such as interest-free repayment plans to entice customers, but the Finance department would argue that any form of extended credit may lead to potentially company-crippling liquidity problems.

Marketing Goods/Products and Services

• Intangibility

• Inseparability

• Heterogeneity

• Perishability

• Product Strategy

• Price Strategy

• Place Strategy

• Promotional Strategy