Basics of Marketing : Marketing

Marketing

The American Marketing Association (AMA) defines marketing 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 goals.

In the most simple and basic manner- ― Marketing is the delivery of customer satisfaction at a profit.

Core Concepts of Marketing

Needs - state of felt deprivation for basic items such as food and clothing and complex needs such as for belonging. e.g. I am thirsty

Wants - form that a human need takes as shaped by culture and individual personality. i.e. I want a Coca-Cola.

Demands - human wants backed by buying power. i.e. I have money to buy a Coca-Cola.

Products – Anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a need or want.

Examples: Goods, Services, persons, places, organizations, activities, and ideas etc.

Different Types of Pricing Strategy

Pricing strategies have a major impact on the marketing effectiveness for companies, large and small.

Pricing is one of the four elements of the marketing mix, along with product, place and promotion. Pricing strategy is important for companies who wish to achieve success by finding the price point where they can maximize sales and profits. Companies may use a variety of pricing strategies, depending on their own unique marketing goals and objectives.

1. Premium Pricing

Premium pricing strategy establishes a price higher than the competitors. It's a strategy that can be effectively used when there is something unique about the product or when the product is first to market and the business has a distinct competitive advantage.

2. Penetration Pricing

A penetration pricing strategy is designed to capture market share by entering the market with a low price relative to the competition to attract buyers. The idea is that the business will be able to raise awareness and get people to try the product.

3. Economy Pricing

Economy pricing is a familiar pricing strategy for organizations that include Wal-Mart, whose brand is based on this strategy. Aldi, a food store, is another example of economy pricing strategy. Companies take a very basic, low-cost approach to marketing--nothing fancy, just the bare minimum to keep prices low and attract a specific segment of the market that is very price sensitive.

4. Price Skimming

Businesses that have a significant competitive advantage can enter the market with a price skimming strategy designed to gain maximumrevenue advantage before other competitors begin offering similar products or product alternatives.

5. Psychological Pricing

Psychological pricing strategy is commonly used by marketers in the prices they establish for their products.