Marketing Basics

Which of these groups are important for your company?
• Neighbours – Who are they?
• Local banks.
• Local politicians.
• Local authorities and agencies.
• Local press.
• Trade organisations.
• Unions.
• State agencies.
• Other – Who are they?
How will you reach them?
• Sponsorship.
• Press releases.
• Visits / Open Days.
• Information / newsletter.
• Profile in local newspapers.
• Donate your products / services for a worthy cause.

PR builds and maintains a good reputation.

Public relations is exactly what it says: Building a relationship with the public.

Channels of distribution
You need to understand the channels of distribution that you will be using for your product / service. Each industry is different and fortunes have been made (and lost) on changes to the channels of distribution. Look at how Dell has changed the way people buy computers – and how slow other computer companies have been to catch up.
The fewer the stages within a distribution channel, the lower the distribution cost – which is why lots of businesses try to cut out the middleman. On the other hand, the middleman provides a useful service – holding stock, sourcing customers, advising on market conditions – and cannot always be dispensed with. You need to balance distribution costs with promotion costs. Very often, sales channels with low distribution costs have high promotion costs – for example, mail order.
Consider also alternatives to the traditional channels above that are making huge changes in the way people buy. How will they impact your business?
So, you need to be able to answer these questions:
• What distribution system are you considering?
• Why?
• What do your competitors do?
• Where are the weaknesses in your system?
• How can they be corrected?

With services, you have nothing to show until you have done the work – and sometimes not even then. If you offer a service, when you agree a price it is a good idea to explain exactly what your customer can expect – for example:
• What your service consists of.
• The time needed to complete the service.
• The time when the service will start.
• The price.
• The agreed method (and time) of payment.
• Whether the cost of materials is included.
• Whether other expenses (travel to the customer’s location, for example) are included.

To establish your price, it is important to know what your customers are used to paying, and what they are prepared to pay. (At this stage, price has nothing to do with cost – that comes later!)

Make sure you can answer the following questions about your product:
• Describe briefly the product(s) you want to launch.
• Describe your product’s core.
• Describe your product’s surround.
• What choices do you offer your customers?
• What extras do you offer compared to the competition?

a product is not only the product itself (the core), but also the services and intangibles that surround it (the surround). For example, a pub sells pints (core) and quick service and atmosphere (surround); a clothes shop sells clothing and appearance or personal image, a flower shop sells plants and flowers and ambience in the house. What do you sell?
The customer also wants a choice. What you have to offer consists of a range, a selection of choices, products that complement each other and make it attractive for the customer to come and buy. A pub also sells meals, a clothes shop also sells accessories, a flower shop also sells earthenware. What range of choices do you give your customers? Customers also want to know what extras come with your product.
What do you do that the others do not do? Think about packaging, service, personal attention, brand articles, originality, creativity and so on. What extras do you offer?

Within Promotion, we will look closely at Advertising, Personal selling, Public Relations, the Internet and Customer Service.

Recognising that selling services was different from selling products, marketing theorists later extended the marketing mix to include the 3Ps of service:
• People.
• Physical evidence.
• Process.