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Elements in Marketing Decision

Updated on February 6, 2010



Marketing decisions involve four key elements — product, distribution, price, and communication. These elements combined make up the marketing mix. Every marketing strategy involves decisions about which products are available in the market-place, where to sell them, how much to charge for them, and what to tell the public about them. Weakness in any decision area could mean the failure of a product or low profits for the firm.

The marketing mix for each product is different. Note the product, price, and communication decisions and the way they are combined in the marketing mix for automobile batteries and for men's shaving cream.



The product element is concerned with developing a product that people are willing to buy. The product must satisfy a customer's need, otherwise, people will not want it. Specific product decisions concern size, color, brand name, packag­ing, and product options. But the marketing manager is concerned about more than just physical features. A product is made up of all the factors a customer considers in making a purchase. Some questions to be answered are: How should the product be serviced? How will it be installed? Should the product carry a warranty? If so, what kind of warranty? What kind of reputation will the product have?



The distribution element of the marketing mix refers to where the product is sold, how it is delivered, and by whom. Distribution decisions involve manufacturers, retailers, and a variety of intermediaries, or wholesalers. The group of marketing institutions which links together the manufacturer and the consumer is called the channel of distribution. Wholesalers and retailers are examples of such institutions.

The right distribution decisions create time and place utility for the buyer, which means more profit for seller. Marketing managers need to answer many questions when constructing a channel of distribution: Who should sell the product? Should the manufacturer own the distribution network or should a wholesaler be used? How much inventory should be kept? What type of stores should sell the product?   



How much to charge for a product is one of the most important decisions facing managers. Pricing decisions involve more than the number on the price tag. They also involve discounts, markups, and delivery terms.

The pricing decision can be simple if the product is similar to others in the market. Here the firm sets the selling price roughly equal to the market prices of competing products. But if the product has features that make it different from competing products, or if it is an entirely new product, then the decision is much more difficult. Should the product be priced to earn immediate profits or long-term profits? Should price be based on demand or on cost factors? Would a higher price or a lower price earn greater total profits? Do buyers believe price is a direct indication of a product quality? Should one model of the product be priced in relation to a slightly different model?



Even a great product cannot sell itself. people must be told about the product before they can buy it.Some businesses promote their products through personal selling, that is through direct face-to-face interaction between a salesperson and a customer. Most makers of consumer products, however, rely on advertising to reach their markets. They may supplement their advertising with point-of-purchase displays, free samples, and coupons. Whatever the methods used, the firm must communicate with the public. Otherwise its products will grow old on the shelf. This is just as true of a service organization as it is of product manufacturers. Airlines tell the public about new routes, changing ticket prices, and the comfort of their flights. Some of the questions that businesses and nonprofit organizations ask themselves are: Should we advertise directly to the final consumer? Or should we direct our advertisements to wholesalers? How much should we spend on advertising? Should we give away free samples? How should we pay salespeople? How should we select new sales people? What about plant tours and other publicity devices?


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