Planning vs. Forecasting?

LESSON 7 MARKETING MIX

▼ Read and translate the text and learn terms from the Essential Vocabulary.

FOUR Ps OF MARKETING

What is Marketing?

What is the difference between marketing and selling? My old VP of Marketing buddy said it well: "Selling is getting rid of something you've got. Marketing is hav­ing something you can get rid of." A successful marketing oriented company is not product driven. Its success comes because of its focus on customers and their needs and wants.

The Selling Process

A selling orientation is one, through which a company emphasizes its products with the main aim of maximizing sales.

The Marketing Process

A marketing orientation begins by examining the needs of the prospective users of a product. Even the details of the product design are driven by paying particular attention to the needs and wishes of the customer. Profits will result from having satisfied customers.

Selling vs. Marketing Processes:

Planning vs. Forecasting?

In a business plan, companies will generally make a "forecast" of sales revenue on a month-by-month basis for the next few years. How can a company say that in May of next year it will generate sales of $2.3 million from Product A? Is this a guess?

If a company says it "plans" to achieve sales of $2.3 million, it is implied that there are specific activities that have been defined that will lead to this target. To this end, the distribution channels for the product must be defined. Pricing assumptions have to be tested and adjusted. Advertising budgets and schedules must be worked out. Most importantly, the resources required to achieve the desired sales level must be calculated. How many salespersons will be needed? What level of technical sup­port is necessary?

The 4 Ps of Marketing or the Marketing "Mix"

The 4 Ps of marketing are Product, Price, Place, and Promotion. The 4 Ps are your marketing "mix". You control the 4Ps. They are your "independent" variables. The dependent variable is sales volume. This is the output that you get by defining the inputs — i.e. the 4 Ps. How do you choose this mix? That is the challenge! These variables are all interdependent. The task is to set these variables in such a way so that sales will take place. You cannot "make" a customer pull out her credit card, but you can certainly help her in coming to a decision by setting the "right" price, the retail outlet, the level of advertising and even product attributes such as color or perceived quality. You control everything but the customer herself.

In defining your marketing mix it is also necessary to take into account your competitor's mix as well as your overall corporate objectives. The idea is to come up with a mix that will clearly differentiate your products from those of your competitors while considering your corporate goals. For example, the mission of your company may be to offer a high-end luxury product since your competitors are addressing the mass market and this is consistent with your company's goal of owning the market for top-of-the-line products of this category.