Before an organization introduces a product to the market, planning goes on behind the scenes as to what product or service must be delivered based on market demand or market need, the price that must go with the product, the location or place the product must be sold and the channel of sales or means of advertising. They are known as the four P’s of marketing and it is basic for every business enterprise to consider these fundamental blocks if they want to succeed in their trade.
Peter & Donelly (1998) defined marketing management as “the process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges with target groups that satisfy customer and organizational objectives”.
The scholarly definition above is elaborating or throwing more light on the introduction I gave and we actually going to delve deep. For an organization to come up with a product or service idea, it starts with the business leader. He first conceives a business idea by dreaming about it and nurturing it in his heart until it becomes part of his whole being. It becomes his talking point and he walks the talk all the time. Anytime he speaks, he speaks about a particular thing he loves and wants to do. It becomes a burden on his heart. What is on the heart of the business leader therefore is usually what he has been created or called to do and he spearheads the product or service that must be sold either by knowledge or harnessing experts with the talents and creativity to assist him to achieve his dream. This actually begins the planning process and it is done by the strategic management units of organizations. Planning is a process because it considers one issue after the other.
‘Executing the conception’ is bringing into existence, the product or service idea that was conceived by the business leader earlier on in our discussion. Execution is done in the form of a tactical approach. That is how to deploy the product or service idea to the consuming public. The idea must be executed in a strategic manner and the product or service the organization chooses to sell, how much to sell it, where to sell it and the channel of selling it is part of the strategy. They are called the four P’s of marketing and are the first and foremost consideration in the planning of any professional business enterprise.
The product the organization chooses to sell must be based on market opportunity, market need and market demand. So that in spite of the love and passion the business leader has for the product or service he wants to deploy, he should have spotted a gap in the market that can be exploited, customers must be seeking the product out there passionately and there must be huge market out there so that the organization can make profits. Of course apart from the desire and love to roll out with the product or service idea, the other important thing that every business leader looks out for is making financial profits because running a business is both time and monetary investment.
Pricing to a large extent determines how fast or slow the product or service is sold in spite of quality. If the segments of target markets that the organization is looking at are of a certain class and values quality, price will not be a barrier at all. However, if it is the other way round, it could be a major obstacle. It is important for the organization to consider the type or category of customers they are targeting and their spending power. It will help them to structure their prices in such a way to meet the expectations of their target market. In planning their prices, an organization must recognize the presence of competitors especially ones who are in similar products or services and their price could be a major threat to their entry and stabilization. It is important therefore to set prices that can compete with available markets. In the event customers find their prices high, they can go for substitute products with affordable pricing or vice versa.
Michael Porter’s five forces can be applied here: industry rivalry, the threat of new entrants, threat of substitute products, bargaining power of buyers and bargaining power of suppliers. It simply means that, the organization must always be mindful that there is a business rivalry amongst competitors in their field and that is why they must watch their prices. They must also be aware that new companies can come into the industry with prices that can challenge theirs. Other organizations may have similar products their customers can go for if their prices are not competitive enough. Customers also have the power to bargain for reduced prices and because competitors can bargain with their suppliers, their cost prices are likely to go down and thus reduce their prices for the same amount of quality to snatch customers of competitors. These are the permutations so an organization must be informed by this chart and come up with prices that can satisfy these inevitable competitor challenges.
The channel the organization also uses to inform its target customers of the availability of their products is so important. Are they going to use television or radio because their target market listens to these mediums more than the others? Are they going to use newspapers, newsletters, letters, brochures, pamphlets or leaflets because their target customers read these materials more than the others? These are the critical considerations when an organization is choosing an advertising channel for their sales. It is very paramount to know where the organization’s products are available for their customers to go and purchase. This can have serious implications on sales growth or decline.
By what ways can the organization send the physical product to sales points for customers to buy them? Is the organization dealing with wholesale buyers alone for that matter, once wholesale trucks comes for them, they are done with sales and they have their money? Or apart from wholesale buyers, they also deal with small shops and small buyers who can supply them to the end-user in homes, communities and the ordinary customer walking on the streets. The convenience of the customer must supersede any interest in taking this important step. Selling services is intangible so they cannot go through the same channel as physical goods. Services can be offered at physical locations. For instance, a mobile telephone business can have a physical location for selling telephones at the same time use the location to setup connections for customer access; conduct repair and maintenance work and sell telephone accessories and hardware. The sale of the telephone is the physical product and granting access and maintenance is the service aspect. If the two goes together, it enhances the selling chances of the organization. However, the organization could have just sold the phone and allow the customer to look for connection and maintenance services elsewhere. There are organizations that only do repair and maintenance work and they charge customers for it separately. This is the service aspect and it is a firm indication that service alone can be sold and can sell. That is why the term ‘products’ and ‘services’ are used interchangeably depending on where they fit appropriately.
Some organizations can also sell the telephone and give customer advice to the client to follow to connect on reaching his destination. Avenue is made sometimes to call the organization to assist with any challenge. Organizations that resort to this offer have not developed a separate service department yet. Registration and online job centers can give you website addresses to enter and complete registration processes or submit CV’s to complete job applications. Payment for internet service to gain access to websites and perform these tasks is indirect payment of services to the internet company indicating again that services are sold and paid for. One of the other ways to sell a service is to offer ideas in the form of giving advisory services which are duly paid for by customers. Whiles rendering the advice, the organizational representative is speaking from knowledge in his head that brings business solutions to the client. This is the way ideas can be sold.
The organization provides the service and the client is the recipient. So there is an exchange of need and provision and the customer is one of the target groups of the organization’s service. The customer is expected to receive satisfaction by this exchange or transaction and by so doing, management of organizations also meet their daily objectives as outlined or stated in their mission statement.
The writer is a marketing specialist with a degree in international marketing
Tel: 0246334085/Email: [email protected]