International Marketing Practices

Chapter 3: Introduction to Marketing

Marketing can be defined as the process of identifying customer needs, incorporating those needs into products and services, and pricing, promoting, and delivering those goods to the customer. Entrepreneurs often overlook marketing when they want to start a business. In many instances, an individual has a great idea for a product or service and assumes that there will be demand for it, or the individual may be very good at making a product. However, competition often arises, and the individual has to identify why the product is better or different. All good business start-ups thoroughly evaluate the market before investing, as they need to completely understand their competitive advantage in the marketplace. By the end of this chapter, readers should have an understanding of the marketing mix for their product, know how to conduct market research, know how to reach potential customers, have an understanding of online marketing methods, and have an appreciation of challenges associated with entering foreign markets. Marketing Fundamentals — The Marketing Mix Any marketing strategy should include a detailed set of actions that the business can take to increase the demand for its products. These potential actions can be grouped into four categories — product, price, promotion, and placement (or distribution) — known collectively as the 4 P’s of marketing. Product A product is any object, service, place, organization, idea, or personality that satisfies a cu stomer want or need. The three main types of products addressed here are commodity products, specialty products, and differentiated products. Commodity products. Hardwood lumber, dimensional lumber, and plywood are all considered commodity products, or items that are manufactured to a standard set of specifications. For commodity items, there is little differentiation in products between manufacturers. For this reason, competition in the commodities market is based primarily on price. It is often a surprise to small to medium sized manufacturers of hardwood lumber just entering the marketplace how little control they have over the selling price of their products. Specialty products. On the other hand, specialty products are developed and offered to a small market segment or group of customers. Competition in specialty product markets is typically based on product features over price, often providing companies with the potential for higher profit margins.

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