What are the components and elements of marketing? Pricing is one of the most important. Price setting involves consideration of many aspects of the market, including cost of production, competition, market condition, and quality of product. Promotion Planning is another component. Learn about the key components to marketing success.
There are many Components of Marketing
- Consumer behaviour
- Marketing management
- Marketing research
- Marketing strategy
- Marketing mix
- Product management
- Promotional Planning
Consumer behaviour is the study of consumers and the processes they use to make purchasing decisions. It attempts to understand the decision-making and motivational processes of buyers, either individually or in groups, by studying characteristics such as demographics and behaviour.
It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general. Often focus groups are used in the study of consumer behaviour.
Marketing management is a business discipline which deals with the application of marketing techniques and the management of marketing resources and activities. Marketing managers are often responsible for influencing the level, timing, and make up of customer demand for their product.
The role of a marketing manager can vary significantly based on a business’s size, corporate structure and sector .In a large consumer products company, the marketing manager, or brand manager, may act as the overall manager of their product.
Marketing research is the process of gathering information to identify and study marketing opportunities and issues. Researchers generate and evaluate marketing activities, monitor marketing performance, and improve understanding of marketing effectiveness.
Marketing research specifies the information required, and designs the method of collecting information. It manages the data collection, analyses results, and communicates the findings and their implications.
Marketing strategy is the development of a strategic plan to deliver the targeted marketing objectives for the brand, product or company. A key objective of marketing strategy is often to keep marketing in line with a company’s mission statement.
Marketing strategies underpin the marketing plans designed to achieve marketing targets and objectives, which usually have measurable results. Marketing strategies are often developed as multi-year plans, with a tactical plan outlining and targeting specific actions to be accomplished in the current year or period.
Marketing strategies can often be dynamic and interactive. They are partially planned and partially reactive to the market. The strategy will consider internal factors such as the marketing mix, performance analysis and strategic and budgetary constraints.
It will also consider external factors include customer and competitor analysis, target market analysis, evaluation of the technological, political, economic, social and cultural environment.
Once analysis of internal and external is completed, a strategic plan can be developed to identify business alternatives, establish goals, determine the optimal marketing mix to attain the goals, and plan implementation. The plan will include monitoring progress and a set of contingencies to react to problems in the implementation of the plan.
Marketing mix has four elements -product, pricing, promotion and distribution. This can be summarised as ;-
Having the right product in the right place at the right time and at the right price.
Marketing Mix Modelling
Marketing Mix Modelling can be used to determine the optimum marketing budget and allocate it across the marketing mix to achieve the defined strategic goals. It can also be used to allocate spend across a portfolio of brands and manage brands to create value.
Pricing factors include cost of production or delivery of a service, market place, competition, market condition, and quality of product.
Pricing per unit may be based on factors such as a fixed amount, quantity deal, promotion or sales campaign, turnover discount, payment or credit terms, specific quote, tender price, shipment or invoice date, and many others.
Price setting involves consideration of many aspects of the market.
For basic commodities such as food, price will be based on cost plus margin.
For products at the luxury end of the market, more consideration will be given to the value that consumers place on an item. Scarcity is often manipulated to drive price up.
The expected life cycle of the product will be a factor.
What value do customers place on the products or services?
What are the company pricing objectives?
Should we use profit maximization pricing?
Should there be a single or multiple pricing?
Should prices vary country to country? Are there local taxes?
Should there be quantity discounts?
What are competitors charging?
Should we use a price skimming or a penetration pricing strategy?
Are there any legal restrictions – retail price maintenance, price collusion, or price discrimination?
The price floor is determined by costs.
The price ceiling is determined by demand factors such as price elasticity
The price level selected should achieve three things:
- Meet the financial goals of the company and ensure profitability
- Be realistic -Will customers buy at that price?
- Support a product’s positioning and be consistent with the other variables in the marketing mix
Product management is a marketing role that deals with the planning, forecasting, and marketing of products at all stages of the product lifecycle. The main focus is on driving new product development.
The product manager is effectively the general manager of a product or group of products. The role consists of product development and product marketing with the objective of maximizing sales revenues, market share, and profit margins. The product manager is often responsible for analysing market conditions and defining features or functions of a product.
Promotion Planning is one of the Components of Marketing .It can include special offers, incentives, advertising, sales promotion, direct marketing, and public relations. A promotional mix allocates budget and resources to each element.
A promotional plan can have a wide range of objectives, including new product launch, sales increases, market share acquisition, creation of brand equity, positioning, defence against competitor pricing, or creation of a corporate image.
There are three basic objectives of promotion;-
- To present information to consumers-educate and inform.
- To increase demand.
- To differentiate a product.
There are different ways to promote a product in different areas of media. Promoters use internet, TV and radio advertisement, websites, special events, endorsements and newspapers to advertise their product. There may be a special offers, discounts or competitions.