CHAPTER 11
Unique Marketing Issues

Selecting a Market and Establishing a Position

To succeed, a new firm must know who its customers are and how to reach them. A firm uses a three-step process to determine who its customers are.

Branding

A brand is the set of attributes—positive or negative—that people associate with a company. These attributes can be positive, such as trustworthy, innovative, dependable, or easy to deal with. Or they can be negative, such as cheap, unreliable, arrogant, or difficult to deal with. The customer loyalty a company creates through its brand is one of its most valuable assets.

The 4Ps of Marketing for New Ventures

Once a company decides on its target market, establishes a position within that market, and establishes a brand, it is ready to begin planning the details of its marketing mix.  Most marketers organize their marketing mix into four categories: product, price, promotion, and place (or distribution). For an obvious reason, these categories are commonly referred to as the 4Ps.

Product

A firm’s product, in the context of its marketing mix, is the good or service it offers to its target market. Technically, a product is something that takes on physical form, such as an Apple iPhone, a bicycle, or a solar panel.

Price

Price is the amount of money consumers pay to buy a product. It is the only element in the marketing mix that produces revenue; all other elements represent costs. Price is an extremely important element of the marketing mix because it ultimately determines how much money a company can earn.

Promotion

Promotion refers to the activities the firm takes to communicate the merits of its product to its target market. Ultimately, the goal of these activities is to persuade people to buy the product

Place (or Distribution)

Place, or distribution, encompasses all the activities that move a firm’s product from its place of origin to the consumer. A distribution channel is the route a product takes from the place it is made to the customer who is the end user.

Sales Process and Related Issues

A firm’s sales process depicts the steps it goes through to identify prospects and close sales. It doesn’t matter whether a firm is selling directly to customers or through intermediaries; it still has a process through which it makes sales. If it’s selling through an intermediary, like a distributor, it has to convince the distributor to carry its products and has to offer the distributor varying levels of support.

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