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Marketing

Marketing is a series of activities which are aimed at both meeting customers´ needs and making an appropriate profit in return. It covers market research, environment analysis, branding, distribution, sale stimulation, pricing and many other activities which are generally divided into inbound and outbound marketing, i.e. activities within a company and out of a company respectively.

Market research represents an essential activity of marketing. Only the firm which succeeds in finding the right customer for its product and offers them the right product at the right price in the right market and in the right way can survive.
As the market is very wide, market research is carried out in just a part, a market segment. A market segment is a homogenous sub-set of customers demanding similar products and services. Segmentation follows either demographics (age, gender, income) or geography (region, cities, countries).
The objective of such market research is to get proper information on products which the company sells as well as the competitive products. With regards to the competition this means mapping out which firms form the competition and what their marketing tools are. With regards to consumers this means finding out who they are, where, when and why they buy the products and why other people do not buy them, and prices of competitors products and their strategy.

Marketing strategy is a decision-making process leading to permanent positioning on the market. It outlines the way in which marketing tools are used to attract and satisfy the target market and achieve a firm´s objectives. The basis of marketing strategy is formed by the so called STP, i.e. segmentation which leads to finding specific needs in the market, targeting which sets the needs that should be satisfied prior to the others, and positioning which aims to place an offer in the target market.

Different firms use different strategies, for example growth strategy the goal of which is to gain new markets, competitive strategy consisting of lower prices, higher quality and innovations, or market niche strategy focused on finding a niche in existing markets.

All marketing activities make use of the basic tools known as the marketing mix, i.e. product (assortment, quality, design, packaging, trade mark, warranty, service), price (costs, discounts, payment terms, credits), place (distribution channels, logistics) and promotion (ways of presenting a product to customers).

Product is not only the goods or services themselves but one of the basic components of a marketing plan. To form a working marketing strategy, products are categorised into three main groups. Convenience goods represent goods which people need very often and are not willing to invest any effort to get it (food, drinks, toiletieries). Shopping goods are bought occasionally and consumers usually spend time choosing and buying them (cars, furniture). Specialty goods are those of specific interest (sewing machine).

Each product in the market goes through its life cycle, consisting of introduction, growth, maturity and decline in sales depending on time.

Price is affected by many factors such as manufacturing costs, quality of products, competition, market environment and distribution channels. Each company prepares its own pricing strategy taking in account the factors mentioned above together with its marketing goals and objectives. From this point of view there are different strategies that can be implemented. Economy strategy is based on low costs and prices to keep the product on a market. Penetration strategy consists of very low prices which help the product get to the market. Premium strategy results from uniqueness of a product which leads to its high price.

Place, or mostly described as distribution, refers to the system of getting a product from manufacturers to consumers. It is distributed in two basic ways, either directly from a manufacturer to a consumer or via intermediaries, e.g. wholesalers, retailers, agents or distributors. The system which uses intermediaries forms a chain generally called a distribution channel. Although there are distinct disadvantages to this system (higher costs and then prices, low control of product marketing), direct distribution is not widespread. Intermediaries provide both manufacturers and customers with benefits: better assortment of goods, improved efficiency, routinisation of transactions, easier to look for goods and customers, etc.

Promotion consists of a wide range of activities such as exhibitions, conferences, direct advertising, providing free gifts, money-off coupons, discount vouchers, competitions and loyalty cards all with the aim to attract demand of target customers. A basic rule used in marketing sales is represented by the acronym AIDA: Attention
(to attract customers´ attention), Interest (make customers interested in the product), Desire (persuade customers to consider buying the product) and Action (selling the product).