Importance Of Tools Of Marketing
‘The simplest definition of marketing is managing profitable customer relationships’ (Introduction to Business Processes, Operations, Management and Marketing, 2011, p. 6). Any Businesses cannot build strong relationships without this function in an organization. In this essay, I am going to analyse importance of marketing and tools of marketing.
Definition of marketing
Although marketing is often seen as advertising through televisions, newspapers or magazines and selling products or services to customers, marketing is the process of understanding customer needs precisely, build a product planning and choose most efficient marketing channel, and attempt to increase demand and develop new markets. REFERENCE
Why is marketing important? …show more content…
Definition of marketing mix according to The Economic Times (2015) is the set of tactical marketing tools that a company uses to promote its brand name or products. The 4Ps make up the major part of its tools – Product, Promotion, Place and Price. Sometimes it includes additional of 3Ps – People, Process and Physical Evidence. Firstly, Product refers to the goods and services that company offers to the target …show more content…
When setting prices, companies must consider the appropriate price for products, whether it is approachable for customers to buy it as well as factors such as competition, costs and position in the market. If the price is greater than the quality of product, it may be unattractive to customers. If the price is below the costs, their profits will go into the red. There are many approaches to success in the competition by setting right price for products or services. Penetration pricing is one way to set the price. This approach is aimed to obtain market share and increase sales quickly by setting a low price for new products. Once the company has obtained a certain amount of profits and market share, they will gradually increase prices for its product. Another popular pricing strategy is skimming pricing. A company such as Apple and Nintendo is likely to use this strategy. They set high price for their new products, then lower price gradually as it gets close to the end of its product life cycle. This strategy is useful to such companies because their products are high demanded at the start, therefore, they charge a premium at launch, but as demand will get lower after a while such as iphone4 they have to reduce the price. Finally, competitive pricing, this strategy is to set a price in comparison with competitors. There are mostly three options that the company may approach and these are to set