Blog post by: Steve Vanevenhoven, Baer Performance Marketing Intern
Not long ago, my father and I were driving along the highway when he pointed out some new billboards being set up. He asked me if the billboards were considered to be a part of marketing, and of course, I told him that yes, they were. He consequently asked me if other advertising, the development of products, and pricing strategy were also categorized as marketing, and I gave him the same response. My dad then replied, “Well, I guess everything is marketing,” and actually, he isn’t too far off.
The American Marketing Association defines marketing as “… the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” (American Marketing Association)
This definition can be broken down using the “four P’s of marketing”. These parts include product, promotion, place, and price. Creating the product or service is often a part of marketing that many people do not recognize. This process involves finding a need and satisfying that very need. During this step, it becomes imperative to develop a product that is the size, color, and exact dimensions that customers will buy.
Promoting a product or service is what most individuals associate with marketing. Some common advertising mediums include television, radio, newspapers, trade show booths, magazines, event sponsorships, direct mail pieces, and billboards. Social media has also recently been added to the mix of marketing mediums.
Sometimes, determining where to offer a product is a no-brainer. For example, it would probably not be a great idea to launch a snowshoe company in Florida. However, it is often very difficult to answer questions about location. The business must first assess the demographics of an area to see if there is enough sales potential. During this process, marketers need to consider their competition, as well. Transportation is also a key element in this equation, especially if the product is only offered online. A company has to determine the appropriate method of transportation, which could be via ship, train, plane, or truck. Each of these has their distinct advantages and disadvantages.
There is also much thought that goes into how to price certain products. There are many pricing strategies that marketing professionals use including penetration pricing and price skimming. Penetration pricing means offering a product at a low price, which is used to gain market share. Price skimming is the opposite of penetration pricing. When this tactic is used, the price is artificially held at a higher point. This will generate less sales but offer a higher profit margin.
The product, promotion, place, and price each play an integral role when defining marketing. Each piece has to work in unison to create a successful marketing campaign. Simply put, marketing is, in fact, what determines the success of a business.
Resources:
http://www.marketingpower.com/AboutAMA/Pages/DefinitionofMarketing.aspx
9206327648
