Market Auditing Essay
Understanding the type of product is important. In the case of chocolate the location and the wrapping are important for the consumer, but in the case of a washing machine, design and performance are going to be more important to the consumer. To consumers products are not only just physical things. For example mobile phones are not only just means for communication but also a fashion accessory, phone companies realised this and now make phones where the covers can be changed to suit your own personality and likes, companies such as Nokia do this.
New products are also very important to businesses, they give the organisation a competitive advantage, and new customers. The marketing mix. The marketing mix is also known as the ‘4p’s’, standing for product, price, place and promotion. To meet customers’ needs a business must develop products to satisfy them, charge the right price, get goods to the right place and it must make the existence of the product known through promotion. Product: people buy goods for a wide variety of reasons, firms can use different characteristics to give their product a better chance in the market.
Some if the most important features of a product are: function, Appearance
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When pricing the product it is important that marketing take the following in to consideration: COST, how much it actually cost to produce the product, DEMAND, how many people are going to be prepared to buy at that price and COMPETITORS, how much are other firms charging for a similar product. Place: a percentage of the price of the product is to cover the cost of getting the product to the customer. Distribution is a key factor in the trading process, getting the right product to the right place at the right time.
The place and location of a service is also very important for the basis of any leisure industry. Promotion: the cost of promoting and advertising goods and services costs a lot. However successful promotion can increase sales thus covering the additional costs of advertising. For a product to be successful it is important for people to be aware of it, though promotions such as advertising on television, boards, radio and word of mouth. In most cases the product is the most important part of the marketing mix, however no amount of marketing will make a poor product succeed.
However a good product without enough publicity may also fail to gain a strong position in the market. It is very important that the price of the product is right, the market is very price-sensitive and firms producing similar products will be vary aware of the price that their competition is charging. This can be seen especially in the fuel market, if a company, say ‘Shell’, was drop to drop the price of petrol other companies would follow. To aid the business or firm in its marketing decisions for the future it needs to plan effectively.
It needs to look at where the business is at present, so it can plan where it is going to go in the future. The process of the company finding out where it stands is called a marketing audit. This analyses the external and internal factors which affect a company’s performance. Most businesses analyse their current position using a SWOT analysis. SWOT analysis is the analysis of an organisations product or service in terms of its strengths, weaknesses, opportunities and threats.
It is a clear visual aid showing with the strengths and weaknesses showing the present position of the company, while opportunities and threats show future potential. The aim of a S. W. O. T. is to highlight those internal areas in which the business is currently performing well, Strengths, as well as those internal areas that are a cause for concern, Weaknesses. The external environment also needs to be analysed and any Opportunities and Threats need to be identified to aid the business in meeting its objectives.
Political factors: the action of the government can have major effects on business and markets, including creating or reducing demand for a particular product or service. The government allocates money to set up educational and sport programmes, controls taxation and interest rates and is responsible for laws, regulations and legislations, this can often result in change in the business industry. Economic factors: Consumer spending may be controlled by a range of economic factors such as income levels, inflation, taxes, unemployment, exchange rates and mortgage rates.
Economic factors are often combined with political factors. Social factors: social trends are important because they have dirct influence on the demand for particular types of products. Changes in population also have significance for marketing. Technological factors: developments in technology give rise to new products and market opportunities. For example it allows customers to select and purchase products such as package holidays more quickly and many new products such as computer games and video systems are now available.
There are other factors as well these include cultural factors, for example how we are influenced by traditions, habits, beliefs and practices. Another influence is legislative factors, for example new Health and Safety Legislations. However other legislations have boosted some industries, for example the National Lottery and allowing horse racing to take place on Sundays extending the market for book keepers. PEST marketing analyses the external environment in which the organisation operates, a marketing analysis, such as SWOT looks at the market within which the organisation operates.
Product life cycle Markets are in a constant state of change. Over a period of time tastes and fashions alter and the technology used to produce goods and services advances as a result there is always a demand for new products and old lines become redundant. The life cycle of a product is the period over which it appeals to the customer. The sales performance of any product rises from nothing when the product is first introduced to the market, reaches its peak and then declines to nothing again.