Marketing
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Introduction
The marketing mix is a very valuable tool used by businesses. It encourages businesses to produce and sell goods that meet the needs of consumers and society efficiently. Marketing is defined as “the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives”. The marketing mix is the blend of “tools” that an organization will use to achieve its objectives with particular target market.
Marketing Mix
There are many different definitions describing marketing and the marketing mix. Most definitions are focused upon customer orientation and satisfaction of customer needs. The marketing concept is the philosophy that firms should analyze the needs of their customers and then make decisions to satisfy those needs, better than the competition. Marketing research is used to define the market segments, their size, and their needs. It is the job of the marketing team to satisfy those customers needs by making decisions about the controllable parameters of the marketing mix. A firm must find a way to discover unfulfilled customer needs and bring to market products that satisfy those needs. Some of the steps involved in market research are: analysis of the situation to identify opportunities, the marketing strategy that is formulated, the decisions regarding the marketing mix, and the final implementation of the plan.
At the heart of the marketing mix concept is four components known as the four Ps. The four Ps are; product, price, place and promotion. Getting the right balance between these four factors is the key to successful results.
The Four Ps are:
Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual good or service, and how it relates to the end-users needs and wants.
Pricing: This refers to the process of setting a price for a product, including discounts.
Promotion: This includes advertising, sales promotion, publicity, and personal selling, and refers to the various methods of promoting the product, brand, or company.
Placement or distribution refers to how the product gets to the customer; for example, point of sale placement or retailing. This fourth P has also sometimes been called Place, referring to “where” a product or service is sold, e.g. in which geographic region or industry, to which segment (young adults, families, business people, women, men, etc.).
Getting the product factor right is very critical. A product or service that really meets customer demands, and is both original and superior than the existing competition, could be a beneficial. Product development is an important part of this, often the result of extensive consumer research implemented through surveys, questionnaires and flyers. The quality, style, servicing, packaging, warranty and labeling of the product can also be derived from the information gathered. Price mainly depends on product and can also affect the promotional options available. Pricing needs to be set in a manner that is appealing to the target market. To high of a price might send customers to a competitor, while two low of a price could affect the organizations profits. Promotion and placement will also be determined by the target market. For years now Starbucks coffee has proven successful marketing. The company is a great example of how proper use of the marketing mix can make a company very profitable.
Starbucks
Product
Pricing
Promotion
Placement
Starbucks Corporations target markets are determined through demographic segmentation, particularly age segmentation, and are generally classified into two divisions, college students and business executives. The author points out that the Starbucks Corporations pricing strategy is largely based on competition. With prices ranging from a minimum of $8 and a maximum of $18, Starbucks coffees are in the average price range for the specialty coffee market. Starbucks wide range of business activity allows it to utilize numerous channels of product distribution. The paper relates that the company adapts vertical channel integration, wherein the corporation owns and operates its own production facilities, warehouses, and retail stores.
Do you see any overarching consumer trends that are driving business today?
Let me start by saying that we see a fundamental change in the way consumers buy their products and services. In addition to the price, the convenience, and other benefits, consumers are demanding more. They want products or services that create a powerful and enduring emotional connection. We at Starbucks have seen significant loyalty and value around the trust we have built with our customer. The issue of trust has become and is the most powerful foundation for consumer choice.
The implication for marketers is to strike the balance between profitability and social consciousness and sensitivity. Traditional advertising and marketing is not enough to build this relationship; those companies that turn their backs on the balance of short-term business and long-term sensitivity and relationship will lose in the market place
Starbucks
How do you explain this need by consumers for emotional connection?
Employees are one of the most important resources to Starbucks. If the company is to prosper, the employees must be treated well. All employees are eligible for Starbucks health care and benefits package, as well as a starting wage above the minimum. Starbucks strong commitment to the environment is guided by an environment committee. The Company endeavors to offer an environmentally safe product, as it believes that the welfare of people, plant and product are linked. Starbucks prides itself on being a “good citizen” locally and in the various coffee producing countries. They make significant contributions to local charities that focus on children, the environment, the homeless, and AIDS research/support.
The Company holds approximately 39 federal trademark registrations in the United States.