Marketing 101- What are the Basic Principles?

Marketing 101- What are the Basic Principles?

The American Marketing Association defines marketing as the activity, processes, and set of institutions that create, communicate, deliver, and exchange offerings that have value to consumers, partners, and the larger society. There are four basic principles of marketing, commonly referred to as the "4 P's" or Marketing Mix, namely, Product, Price, Promotion, and Place. Without these elements, it would be practically impossible to come up with a comprehensive marketing plan. Online business courses help you to understand how to properly execute the right mix of these principles in order to enhance your chances of success.

The 4 P's of Marketing

A product is any tangible item for sale (good) or service being rendered in exchange for money. You need a relevant product in order to be in business. In coming up with a product, you must first identify a perceived need in the market, which you intend to satisfy. It is not a must that you invent an entirely new product. You can offer an already existing product - just add some value that will make it superior and more beneficial to customers. In addition, your product must stand out from the competition.

Price is an important element in marketing because consumers can only buy what they can afford. If your price is out of reach for consumers, they will be forced to look for affordable alternatives from your competitors. Price also plays a significant role in:

  • Determining your profit margins – Various costs are involved in preparing a product for the market, including the cost of manufacturing (creating the product), value addition, packaging, and advertising. For you to make profit, you must set your selling price above what it cost you to bring the product to the market.
  • Creating perceptions of quality – Most consumers have the perception that a higher price signifies quality. However, if you have other means to effectively relay the quality of your product in relation to what your competition is offering, setting a lower price can help you to drive sales.

Promotion refers to the process of reaching out to your target audience to let them know about your goods and/or services. Essentially, there is no use for you to have the perfect product and better yet, offer it at an exceptional price, if no one knows that it actually exists. Therefore, you must get the word out and let consumers know about the product, and its benefits. Promotion is about creating awareness and to some extent, perceptions about your product. It involves advertising, public relations campaigns, and promotional incentives such as sampling, special events and coupons.

Place refers to the actual location where consumers can find your product. Choosing an ideal location to offer your goods or service is very crucial in developing an effective marketing plan. A physical store and an online e-commerce service are examples of a place that you can offer your product. When choosing a location, you must consider several factors such as:

  • Convenience - The location must be convenient for your customers to find and acquire your product. For instance, department stores are ideal for a localized product, whereas online stores are more suited for goods or service that has a global appeal.
  • Accessibility: Depending on the kind of product you offer, you should choose a location that enables customers to get it any time they need it.