Marketing is a fundamental aspect of running a business and plays a large role in a company's profitability. Marketing describes the activities a business pursues to attract and retain customers. A company's overall marketing strategy can consist of four P's: product, place, place and promotion.
Product
One aspect of marketing is determining the types of products and services a business will offer. The target market usually shapes this decision. The target market is the typical customer the business plans to attract. Businesses often undertake market research to learn more about their target consumer. Surveys, product tests and focus groups are common methods businesses use to research consumer demands.
Price
The price a business charges for goods and services is another key aspect of marketing. If a company charges too much for a certain product, its target customers may choose alternatives, while charging too little may result in a lack of profitability. Large companies often benefit from "economies of scale" which describes a situation where products produced in mass quantities are cheaper to produce, per unit, than those produced in smaller quantities. As a result, large companies are often able to charge less than small businesses. Smaller businesses may attempt to compensate for higher prices with better, more personalized service.
Place
In the 4 P's of marketing, place describes how and where a company distributes its good and services. For example, the decision of which street corner to choose for a pizza business could be the difference between success and failure. Many companies distribute goods and services through physical storefronts, while others may sell goods online or generate revenue through other means.
Promotion
Promotion is describes actions the business takes to actively persuade consumers to purchase its goods and services. Businesses use a wide variety of advertising strategies, such as Internet ads, emails, billboards, radio commercials, TV commercials, signs and bumper stickers. Promotion can be expensive, so businesses must balance costs with potential gains. For example, ads that air during the Super Bowl can cost millions of dollars, so it is only worth it for companies to air Super Bowl ads if they think it will bring in large amounts of new business. On the other hand, a cheap web advertisement might only need to result in a single sale to be worthwhile.
Tags: goods services, aspect marketing, companies often, Super Bowl, target market