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Key Components of Marketing System

Key Components of Marketing System
Key Components of Marketing System The core marketing system of a company comprises the suppliers, company, marketing intermediaries and target customers. The success of the company is also affected by competitor’s presence and other segments of public. The management has to watch and plan for all these factors to serve and satisfy the specified set of needs of a chosen target market.   Supplier Selection: A company has to choose suppliers who offer the best mix of quality, delivery schedule, guarantee and low cost. Say, a firm involved in manufacturing confectioneries has to procure sugar, cocoa, caramel, milk powder; Labor, equipment, fuel, electricity and other factors of production are also to be obtained. If the company’s product has a good market, it can opt for continuous production. If it is a growing firm, it cannot go for voluminous production, but only supply goods against confirmed orders. In either case, the choice of suppliers is determined by one major factor called ‘cost’. Of course, one can never compromise on quality and so the company has to decide whether to purchase the inputs or make its own. Pic Courtesy : 5 Steps to Successful Supplier Selection The relationship of a company with the suppliers should be of a long-term nature, since any sudden change in the supplier’s environment will have a substantial impact on the company’s marketing operations. Sudden supply shortages, labor strikes and other events can interfere with the fulfillment of delivery promises to customers. This will result in sales decline in the short run and loss of goodwill in the long run. Back orders lead to loss of customers and in course of time their trust. The business firms must plan for alternate source of supply to avoid the risk of over-dependence on any one source of supplier. Company The marketing department has to work in tandem with the other departments of the company namely, finance, production, personnel and research and development, while designing and implementing its marketing plans. Finance department – has to be consulted regarding the availability and deployment of funds to carry out the marketing plans. Production department – to gauge market demand and to decide on the supply of products based on demand. R and D – new product development. Equally important is Digital Marketing which is considered to be an integral part of your promotional activities – What you are seeing above is a depiction of tools that help you in marketing your products online. Marketing intermediaries: Channel members are the link between the company and the customers. Agents and middlemen find customers who are wholesalers or retailers to take on the title and sell the merchandise. Also there are physical distribution firms who assist in stocking and moving goods from the warehouse to the destinations. The marketing executives have to deal with these intermediaries prudently in order to enhance the operational efficiency of the marketing function. Logistic firms, shippers and airliners help to move the goods from one location to another. Competitors: All the business firms in a particular market segment vie for the same resources and customers. A car manufacturing company in an automobile industry has to compete with other car manufacturers as well as with two wheelers. This implies that competition may come in different forms and each company has to identify potential threat from competitors, study their activities and capture their moves to win over the competition. Public: A company has to keep a close watch on people’s preferences to satisfy their requirements and also it is expected to give back something to the society in the form of social welfare measures. Employees belonging to different culture groups with differing attitudes,...
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Market Structure

Market Structure
Market Structure and Pricing Decisions- An overview What is Market Structure: It is the makeup of a particular market like different characteristics, size, value, number of providers etc. Business markets are always dynamic in nature and influenced by the number and size of potential buyers and sellers, which in turn affects the pricing of a product. If the price is set too high, say, in a homogeneous market, the firm will not be able to survive and compete with other suppliers in the market. If the price is too low, it will not be sufficient enough to cover the profit margin. If you are a monopoly player, then you are the price maker and the price you fix goes unchallenged. First let us have a glimpse on different kinds of market structure and their effect on determining the price. Four different market structures are identified. Perfect Competition Consists of huge number of buyers and sellers, each too small to affect the price of the product-sellers are “price takers and not price makers.” Homogenous products Easy entry and exit to and from the market Agents have perfect knowledge about market conditions. Here, the product is totally undifferentiated and the sellers always sell their product at market determined prices. Otherwise, they fail to attract their customers. Price cutting becomes unnecessary as producers can sell their total output at market price. Online Marketing Monopoly Only one seller in the market Factors prevail that stops other firms from entering into the market, such as, exclusive government license, access to natural resources, patent holding, being a pioneer in the field etc., The product is highly differentiated from other goods There must be no good substitutes Monopolistic Competition Has elements of both monopoly and perfect competition Resembles monopoly in that, product of individual firms are slightly differentiated from others and does not serve as a perfect substitute Resembles perfect competition, in the sense that, there are a large number of sellers and the action of one does not have any effect on the other The difference lies in the fact that sellers have some control over price fixing as some customers might be willing to pay a slightly higher price if the products are differentiated from the competitors. Oligopoly Involves unspecified number of buyers Only a small number of sellers exist The actions of each firm affect the other sellers in an oligopoly market Products are homogenous or differentiated To persist in the long run an oligopoly firm has to do something that prevents the entry of new firms into the market, either in the form of product differentiation or clever advertising. Price cutting or increase affects the sales of other firms too and so the sellers must be cautious of this interdependent characteristic of the market structure. Social Media Marketing A clear idea and analysis of the market structure in which the firm operates, target customers, size of the firm and knowledge about competitor strategy as well as general trend of the market is helpful in formulating appropriate strategies regarding pricing and promotion of your...
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