WHAT IS MARKETING?

Marketing is a branch of commerce concerned with examining products and markets, studying customers' requirements and taking any relevant commercial steps so as to have the right product to reach the right market at the right price. It comprises such features as:

1. gathering information on all aspects of the business2. devising a marketing plan in terms of aims, resources and

strategies to follow3. applying to services of management consultancy4. running a market research and finding out the market

potential5. pondering upon the problems connected with production6. devising relevant advertising campaigns7. availing of computer bureau services which process customers'

data8. considering the opportunity of allowing special discounts9. arranging product demonstrations at local supermarkets10. sending circular letters

Marketing does not only mean selling products or services. It requires the application of a wide number of disciplines and areas of expertise in order to satisfy the tastes and meet the needs of potential customers. The main factors to consider are concerned with product conception and design, brand name, packaging, price, sales promotion, methods of advertising, discovering new customers, determining customers' needs, organizing sales strategies, determining sales areas, planning delivery service, examining expenses, etc.Marketing organization has to cover all these aspects.

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Example of Marketing Organization

Companies have a considerable number of experts and designers involved in the production and design of new products suitable to meet the needs of the market. The creation of a new product is subject to an evaluation process designed to improve the original idea before launching the product on the market. The main points to consider are reflected in the following questions:· Do customers really need this new product?· What features are likely to meet customers' requirements?· On the base of our existing resources and abilities, are we

really able to make it?· What kind of costs ( production, distribution, advertising, etc.)

do we have to cope with?· Is our present capital availability sufficient to support such

production project?· What will be the effective return in terms of profit?· What is the business forecast for the first period of one or two

years?· What do our competitors offer?

These and similar questions are deeply investigated by teams of skilled and exsperienced executives and researchers. They analyse reports from the various sections, sales projections, technical difficulties, competition pressure, suggestions, etc. and decide upon starting the new production project or not.The main sections regarding the organization of a production project are the following: Market Research, Test Marketing, Sales Promotion, Advertising and Distribution.

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Market researchThe aim of market research is gathering information about the people who buy in order to examine the possible sales of a company's product or services. Researchers ask questions about consumers' purchasing habits, the market trend, the products of competitor firms and interview trade operators and prospective buyers.. They contact wholesalers, distributors, retailers and market operators or mail questionnaires to sample participants.

Test marketingIt is a less expensive method of finding out if a new product, which has been launched only in a small geographical area, sells well or not. This method reduces the risks and expense involved in launching the new product all over the country.

Sales promotionSales promotion is concerned with a variety of methods used to promote the sale of a product or service. The most common method of promoting sales is the advertising through the mass media: television, radio, press, cinema, billboard. Other types of sales promotion include consumer leaflets, display posters in retail outlets, permanent signs, display stands, display windows, distribution of samples, coupons and vouchers, etc.

DistributionDistribution is concerned with the channels through which goods reach consumers. A farmer carries his agricultural produce to a wholesale market where they are sold to retailers, hotels , restaurants, supermarkets, etc. A manufacturer reaches consumers through wholesaler-retailer channel or through multiple stores.

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Today's successful companies are the ones that have learned how to get their strategy right. They understand and build on their strengths, they know with whom they wish to compete, and they have effective mechanisms for establishing their priorities. They act to create strategic advantage.

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DISTRIBUTION CIRCUITS

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In advanced economies where most of the population is engaged in specialized production of goods of which they themselves can use only a small part, marketing is a key activity. The modern farmer as well the manufacturer could not manage without it. The marketing system makes possible sales for cash. The farmer can then buy improved seed, fertilizers, pesticides and machinery, and so obtain higher yields per man and per acre. The manufacturer can purchase materials from a wide range of sources. Both farmer and manufacturer can pay their workers in cash instead of in kind.Consumers concentrated in urban centres, where they produce no food themselves, depend on marketing for survival; food must be brought to them. If the marketing channels were interrupted - as seemed likely for some cities during World War II - then many millions of people would be without food. Thus specialization, industrialization and urban concentration are associated with organized marketing, and rapid economic development is conditional upon a comparable growth of marketing functions and services. (From Encyclopaedia Britannica)

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An aspect of marketing considers the opportunity to have the right product to reach the right market. This implies having to solve any problems concerning with assembly, distribution, transportation, storage, grading, packaging, exchange, finance and risk.

AssemblyThe assembly of produce of differing type and quality from a number of sources is usually the first step in marketing. Concentration at convenient points attracts buyers who could not spare the time to visit scattered producers; it permits transport, storage, grading, packing and processing on a larger scale and with more specialized techniques. Most products undergo substantial changes before they are ready for the final purchaser. For example grain is ground into flour and baked into bread; milk is converted into butter and cheese.

DistributionDistribution systems develop to match available supplies to consumer demand. Supplies flowing into assembly points and warehouses fluctuate in type, quantity and quality. Consumer demand may also vary according to season, climate, local customs, religious teaching and many other factors. Distributors adapt the flow of supplies to such variations in demand by using their experience and market intercommunication.

TransportationMovement of products between places is an essential part of marketing. Transport to railheads, ports or processing plants may be provided by either the original producer or the first buyer. Longer-distance movement by road, rail or sea is often furnished by specialized transport firms. Many of the disadvantages and much of the strength of different marketing systems have their origin in transport methods. If deliveries are slow, and equipment is inadequate, products deteriorate before reaching their market, and contracts cannot be met. Careless handling and delays can result in serious damage and loss, and impose heavy costs on that part of the load which does reach the market in sound condition.

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StorageStorage facilities are needed at various stages of the marketing sequence. Most traders who take possession of produce also control storage facilities in order to have freedom of choice as to the time of resale. At ports and other transshipment centres, and near important commodity markets, storage is provided by specialized enterprises and made available for a fee. Wholesalers and retailers also maintain storage to hold stocks from which they can satisfy clients' requests promptly.

GradingGrading products according to recognized uniform standards enables buyers to purchase more precisely what they want and are willing to pay for; to this extent it increases their satisfaction and makes the marketing system more efficient. Where buyer and seller are separated by long distances and personal inspection is impracticable, then detailed standard quality specifications established by governments are effective.

PackagingMost food and manufactured products must be enclosed in some kind of container if they are to be marketed widely and efficiently. These containers afford a convenient way of handling, help to prevent physical deterioration, make theft, adulteration and substitution more difficult, ensure cleanliness and facilitate measurement, labelling and the attachment of sales instructions and descriptions. They may also promote sales because of their attractive appearance. Specialized equipment and enterprises have been developed to pack goods in wood, metal, paperboard or plastic containers adapted to a wide range of requirements.

ExchangeAn essential part of marketing is the facilitation of exchange. Two phases are involved: the contacting of possible buyers and sellers of particular products at a given time, and the negotiation of the terms of exchange. In many countries the town market square is the scene of a steady flow of direct transactions between producers and consumers. In larger markets, and where producers and consumers are separated by distance, time and processing requirements, the negotiation of sales may be undertaken in return for a fee by specialized commission agents,

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brokers and auctioneers who, perhaps, neither take possession of nor handle the goods sold. Accurate information on the character and quality of a product, its suitability for various purposes and its price in alternative markets is important for persons engaged in buying and selling. Special reporting services designed to supplement such information and help consumers buy to the best advantage had acquired great influence in the United States and Britain by the 1960s.

Finance and RiskAll marketing requires finance. The owner of goods at any stage must either sacrifice the opportunity to use his own capital elsewhere or borrow the necessary capital from some other source. Farmers, wholesalers, manufacturers and retailers need capital or credit for the time during which they are in possession of products and are awaiting sale and payment. Wholesalers, for example, must finance their packing, processing and storage plants, transport equipment and display premises. Retailers must also finance their sales premises, that part of their stock which wholesalers do not carry and, in trades like that for consumer durables, a large proportion of their customers' purchases. Risk bearing is also involved in marketing and must be covered by an equivalent expectation of profit. One of the major risks is that of a fall in price. Price variations are greater for agricultural products, which are subject to the impact of drought, rain and frost, than for many other traded commodities. The risks of such changes for individual traders are often minimized by resort to organized commodity exchanges, where "futures" may be bought and sold as a hedge against cash transactions. Risks of quality deterioration are very important in the case of perishable products such as milk and some fruits and vegetables.(From Encyclopaedia Britannica).

NOTE:Processing is carrying out a series of actions aimed at changing the chemical features of liquids, powder, grains into finished or partly finished form before they are used or sold. Examples of process industries are the oil industry, the sugar industry, the cement industry, the paper industry, etc.Grading consists in separating something (wool, grain) into different lots by quality or size.Futures (Forward purchasing sales)are commodities or securities which are bought or sold at a certain price now for delivery at some agreed time in the future.

Oral Test

1. What is marketing?2. What are the main features of marketing?

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3. What factors are considered when conceiving a new product?4. What kind of problems does the creation of a new product arise?5. What are the main sections regarding the organization of a production

project?6. What is the aim of market research?7. What is test marketing?8. What methods are used to promote sales?9. What is distribution concerned with?10.What advantages does a farmer get from marketing?11.What does marketing mean to consumers?12.What are the advantages of assembling produce in a concentration point?13.What is the function of distribution?14.How does transportation affect marketing?15.What is the function of storage?16.What is the advantage of grading?17.What is the function of packaging?18.Who are the operators who facilitate sales in large markets?19.Why is capital necessary to marketing?20.What risks may occur in marketing?

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Advertising is a fundamental branch of commerce and one of the major aspects of marketing. 'It is the activity of telling people about products, services, events or job vacancies, and making people want to buy the products or services, go to the events, or apply for the jobs'. From a commercial point of view, it is a means of communication aiming at promoting sales of consumer goods or at making consumers aware of the existence of a new product or service so as to arouse their interest and persuade them to buy.

ADVERTISING MEDIA

Advertising is associated with the following advertising media:

1. Newspapers and magazines2. Specialised trade journals3. TV commercials4. Trade fairs5. Exhibition and conference facilities6. Posters displayed in public places or means of transport7. Point-of-sale displays8. Billboards placed along motorways9. Catalogues10. Pattern books or sets of samples11. Electric signs affixed to buildings12. Screen ads13. Shop signs14. Advertising illustrative literature15. Descriptive brochures16. Stickers

The choice of a medium

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Among the main features which affect the choice of a medium are: 1. the quality of the product or service offered,

2. the kind of people to whom the medium applies, 3. the area covered by the medium, 4. the cost of the medium.

Advantages of advertising. The main advantages of advertising are:

1. since it helps to sell more goods, it keeps more people employed;

2. it increases producers' profits;3. it keeps consumers informed about the products available on

the market;4. it contributes to keep the cost of newspapers and magazines

low;

Disadvantages of advertising. The main disadvantages of advertising are:

1. it persuades consumers to buy what they do not need or what they cannot afford;

2. it affects the cost of production cinsiderably;3. it arouses questions of ethics and creates false symbols

especially on the young;ADVERTISING EXPENDITURESAdvertising expenditure rose by 10.6 per cent in 1989 to £7,555 million. The press accounted for nearly 64 per cent of the total, television for 30 per cent, posters for nearly 4 per cent, and commercial radio and cinema for the rest.These proportions have remained roughly constant since 1983. By product category, the largest advertising expenditure is on food, retail and mail order services, financial services, motor cars and leisure equipment.Campaigns are planned mainly by advertising agencies, of which there are several hundred in Britain; in some cases they also provide marketing, consumer research and other services. (From Britain 1991)

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READING PASSAGE

ADVERTISING AS A CONSUMER AID

The alert consumer has a number of resources at his or her command when choosing goods and services. Some of them are:

AdvertisingMerchants inform consumers of products, their uses and prices through advertisements they place in the media. Advertising is especially important in today's large scale national market because "word-of-mouth" knowledge about products is impractical. Businesses find advertising useful because it enables them to differentiate their products from those of their competitors.In 1979, businesses in the United States spent almost $50,000 million on advertising. Advertising is considered a normal business expense, not unlike research and development, or product safety.Although advertising performs some useful functions, critics argue that consumers are often enticed into buying things they do not want or need. They note that ads are prepared by experts who appeal to psychological desires and uncoscious needs of prospective consumers. They also claim that the familiarity of the public with a brand name, or the amount of money a particular company spends to advertise its products, may be significant in terms of sales but is not necessarily reflected in the quality of the product advertised.

Consumer Testing OrganizationsSeveral private organizations test thousand of products and publish the results. They explain usually how tests were made, list brand names, and present relevant and comparative information. Products are usually classed according to which have the best quality, which are acceptable, and which are to be avoided. Individuals can subscribe to these services for modest annual fees.

LabelsA shrewd consumer makes a practice of reading labels on products. Federal regulations require an accurate description of

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the contents of products and a statement of how to use them. Misleading statements are prohibited.(From An Outline of American Economics - United States Information Agency)

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NEWSPAPER AND MAGAZINE ADVERTISING

1. People and planning stages required in making an advert

A newspaper or magazine advertisement is a very common means of communication as well as a product. As a product it implies administrative and presentation skills and is the result of a working group of people. The following is a list showing businesses and people usually engaged in making an advert:

Advertising agency A company which provides the services of designing and making adverts, placing them in suitable advertising media, and carrying out research.

Advertiser or his/her representative

The person or company representative who needs to advertise a product or a service.

Advertising manager A person in charge of planning and overseeing a company's advertising department

Advertisement or business manager

The person in charge of the selling of advertising on behalf of a company (Advertising agency)

Copywriter (=redattore) The person who takes charge of the layout of an advert transforming the idea into suitable words.

Artist A person who makes drawings and pictures to match the basic idea or purpose of the advertising message.

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Photographer A person who takes photos to support the aim of the advertising message.

Engraver A person who makes engravings of the final drawings or illustrations combined with the worded message.

Printer The person who actually prints the advert on the page of the publication.

The main stages in making an advert are:

1. Planning the advert according to the basic underlying idea so as to work up a general layout in terms of contents and costs (Advertiser, Business manager and Advertising manager)

2. Designing the advert into words and pictures (Copywriter and Artist/Photographer)

3. Preparing both words and illustration according to the layout previously agreed

4. Making engravings or electronic recordings to be used in the printing stage

5. Printing the advert on the newspaper or magazine pageGlossary

AdvertiserAn advertiser is a person or company that has a product, or a service, or an event, or a job vacancy to advertise and to this end he applies to and pays an advertising agency to perform this service.Advertising agencyAn advertising agency is a company which provides the services of designing and making advertisements, placing them in suitable advertising media, and carrying out research. (From Business English Dictionary by M.Wallace and P.J.Flynn - Collins)Advertising mediaThey are the channels of communication ( newspapers, magazines, television, radio, cinema, posters, etc.) by which a company or a manufacturing concern informs people of its goods or services.to advertise means to inform, to give/to publish a notice of, to give conspicuous information of a product, a service, an event, a job vacancy to the public through such media as newspapers, magazines, periodical publications, radio, television, posters, etc. Examples: We advertise goods for sale, The Manager advertised for a secretary, This product has been advertised on television, This is a brochure advertisingthe rangeof our services, We should advertise for someone to take care of our children.

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AdvertisementAn advertisement (shortened "ad" or "advert") is an announcement in a newspaper, on television, or on a poster about something such as a product on sale, a service offered, an event to occur, a room to let, an agency to entrust, or a job vacancy to fill. Examples: to publish/to release an advertisement, an advertisement for Arbor shoes, we have read your advert for an accountant.

TYPES OF ADVERTISEMENTS

There are two types of adverts:

1. Classified adverts which are so called because they are selected and sorted into different classes according to their contents features. They are generally arranged in colums headed as follows: family announcements (births, deaths, engagements, marriages, acknowledgement, in memoriam, wedding anniversaries), situations vacant, situations wanted, entertainments, personal, professional & executive, representatives & agents, part time, miscellaneous wanted, miscellaneous for sale, property wanted, property for sale, accomodation wanted, Flat & House rentals, notices, business services, business opportunities, travel & leisure, articles for sale, education & tuition, what's on, etc.

2. Display adverts which are usually illustrated and are placed in different advertising spaces. A display advert generally contains one or more headlines, a logo, text and illustration.

Oral Test

1. What is advertising?2. What are the main advertising media?3. What features affect the choice of a medium?4. What are the advantages of advertising?5. What are the disadvantages of advertising?6. How does advertising affect business?7. What is the function of testing?8. Who are the people engaged in making an advertisement?9. What is an advertising agency?10. What are the main stages in making an advert?11. How many kinds of adverts do you know?12. What are classified adverts?13. What are display adverts?