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Basic Principles of Marketing

Marketing is a crucial business function through which a company carries out
activities to plan, price, promote and distribute products or services to its customers.
The theory of marketing is based on the belief that people buy a product or service to
meet a need or because of a perceived benefit. Marketing uses information gathered
by applying principles from economics, psychology and sociology to decide how best
to develop and promote products and services to the appropriate customers.
The key considerations in marketing are sometimes known as the four P’s:
 Product (your products or services)
 Price (how much to sell your products and services for)
 Promotion (communicating information about your products or services to
potential customers)
 Place/placement (where you carry out your business and distribute to
customers).
The combination of these elements—the marketing mix—into a marketing plan is
generally considered essential for the creation of a sustainable business. The plan is a
detailed statement of how the business will be developed. In order to make an
effective marketing plan it is essential first to carry out research to identify factors
such as:
 product/service mix
 prices
 regulatory and legal impacts
 the customer profile and mix
 customer priorities and needs
• demographics
 customer values
• competitor activities
• competitor strengths and weaknesses.
The plan will evolve in the light of the information uncovered by the research. It will
take account of the overall environment in which business is conducted (economics;
laws and regulations; social, cultural and environmental influences; the supply chain).
This part of the plan helps an organization decide how favourable overall conditions
are for their activity.

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Name__________________________ Date_________________

It will also analyze the market to establish such factors as its size, the market sub-
groups (segmentation) and any future trends. This part of the plan will also be
concerned with the other players in the field, recognizing their strengths and
weaknesses. It will try to identify if there are gaps in the market and if the market is
already saturated.

Next it must consider the behaviour patterns of its typical consumers: how do they
make a buying decision, do they show loyalty to existing brands, how are they
distributed around the country, what about age groups? What are their values? A
further key consideration is the organization itself: does it have the necessary
financial, material and human resources, are its values compatible with those of the
consumers?

By taking into account all the relevant data a company can then develop its marketing
strategy. This will involve decisions on what products or services to offer, pricing,
quality and distribution. It will also have to plan how to promote the goods and
services using advertising, a sales force and considering how to manage its public
relations.

Copyright 2007 Money Instructor

Name__________________________ Date_________________

Basic Principles of Marketing Worksheet

Work with a partner to complete the questionnaire for a business whose services or
products you both use.

Business Name

Products/ services offered

Describe the types of individuals or businesses that use these products /services

How often do they buy these products/services?

Describe the benefits these products/services offer customers

How many other providers offer similar products/services?

How does the business you describe differ from its main competitors?

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Name__________________________ Date_________________

What promotional methods does the business use?

______Mailing
______In-person sales calls
______Phone calls
_______TV/cinema ads
______Paid advertising in newspapers or magazines
______Classified ads
______Ads on the Internet
______An ad in the Yellow pages
______Word-of-mouth advertising
______Network at business meetings
______Window signs to attract walk-in trade
______In-store displays to sell add-on services
______Through online classified advertising or Web sites
______Other (specify)

How conscious are you of this company’s marketing? (Can you quote from their ads;
can you visualize their product/service; do you know the colors they use in
packaging?)

Extremely Very Fairly Not at all.

Copyright 2007 Money Instructor