Marketing is a mix of planning, executing, pricing, promotion, and distribution of services or goods. Marketing is about connecting the product or service to the customers, and the needs of a society. The goal of marketing is to accomplish the objectives of a corporation by selling the product or service successfully. Through customer satisfaction, marketing creates loyalty from the customers. Marketing has a mix of four elements, product, place, price, and promotion. In the paper the subject to describe is each element of the marketing mix and how this mix affect’s the development of Target Corporation’s strategy and tactics.
Product The first element of the marketing mix is product. Products come in different forms. Consumer products are categorized as convenience goods. Convenience goods are products that shoppers will spend little time buying. It is essential that these products be readily available and the brand name well-known. Shopping goods are products that consumers put a bit of time and effort into purchasing. An example of a shopping good is a new car or big electronic items. Specialty goods are items that would interest a smaller group of consumers such as a drilling machine.
In addition, these products are part of the industrial goods category broken down into smaller sub-groups. The last product, tangible goods, is an important one to consider. Tangible goods are services or products used together or sold separately. (Perner, 2008). An organizations product line refers to products that are similar. For example, IBM carries lap-top computers in addition to desktop computers and printers. The computer line and the printer line are one product line. An organization’s product mix is the combination of different product lines. An example of different product ines would be the Johnson and Johnson Company. They hold a mixture of baby products and adult products that range in product lines. Products are represented in different ways. For example, Target carries the Gilligan O’Malley brand made by Victoria Secret. The GOM brand is considered a lower quality of the original brand and is sold at a lower price in Target stores. Another example of products differentiating from each other is with different levels of service. Certain car companies offer better warranties than others so are considered a “superior” quality car.
Products are either new or existing. Corporations rely on bringing new products into their business to keep up with growing trends. Target for example, brings in new product lines from well-known designers. Target also brought in “Great Value” products to compete with Costco and Sam’s Club. Competition, pricing and having a good product mix keep Target one of the top retailers in the world. Place The next part of the marketing mix is place. Place refers to the means by which the consumer buys the product. Most goods purchased by the consumer are purchased from a retailer.
The retailer purchases the goods from a distributor or wholesaler. The distributor or wholesaler, purchases the goods from the manufacture. The distribution chain can be bypassed if the industry sells the product directly to the consumer. For example, the 3M Company may sell some of their office products directly to businesses for use instead of going through a middle distributor. A security system manufacture may sell the product directly to security providers. The point is that different distribution channels provide different profitability depending on the pricing strategy.
According to MFP Marketing, “a retailer is likely to want limited stock of a number of variants and not expect to pay for 60 days. A distributor is looking at large volumes of product in all its variants at greatly discounted rates. ” So in other words, distributors can distribute the product to a large group of retailers at perhaps cheaper prices, whereas the retailer if buying direct may pay a higher price for the product. Target recently has a line of “Great Save” products that encompass the buy more, save more theory.
Target is one of the biggest retailers so they is a good example of buying directly from the manufacture. Some products come through a distributor, but because of the bulk buying, the prices are still good. The past few years has brought many designers that want to sell their product to Target. The designers know that Target has a venue for reaching out to many cultures and groups of people. The designers can sell their line at a discounted price because of the volume. The designer becomes a household name. One example of this is Isaac Mizrahi.
In the designer world he was well known but who in the everyday public, no one knew who he was. Once his line was introduced in the Target stores, everyone knew who he was. Place was the important part of the marketing mix for Isaac Mizrahi. For Target, it was profitable because many people who could not afford his brand before, could now purchase his items from Target. This line was profitable for the designer as well as Target. Another venue that goods are sold through is the Internet. This is a good way for the manufacture to sell directly to the public.
It has enabled the middleman to be bypassed because the price advantage is offered directly to the consumer, thus increasing the volume in sales for the seller (MFP, 2004). Target has used the online shopping as a venue for their guests; however, the Internet does come at a cost in shipping and handling fees. Price The price of the product is defined as the financially expressed value of the product or service within a certain market. From the customer’s perspective, the more expensive, the better the product. The price is the only part of the marketing mix that generates revenue.
All other factors of the marketing mix generate cost. The manufacturing, distribution, and promotion represent cost. These costs need to be covered through the pricing of the product (Nobilis, 2010). The goal of the price is not to cover just the costs but to make a profit from the sale of the item or service. Goals of price have different variables. The profit-oriented goals primarily focus on the profit earned from the product. Sale-oriented goals that focus on targeting a specific price level for a product to maximize sales.
The competition goal is very important. Staying competitive within the market and keeping the attractiveness to shoppers keeps Target as one of the top retailers in the world. Pricing is not all about profit but keeping the guests coming back to buy more items. An example of pricing to keep customers coming back is with video systems and games. The systems are priced at cost, but the games have an 80% mark up. The customers only buy one game system but have to buy games to play it. This marketing concept is used in many different venues.
Refills for products are made and priced using a large mark up from cost, but the original purchase of the product is usually priced at cost. Target has a policy of pricing products competitively. Their marketing strategy is “Expect More. Pay less” and Target prices their products to ensure they are in line with this strategy. The profit is from guests coming in and buying many products and coming back time after time. Keeping the prices competitive with good quality keeps Target competitive with other retailers. Promotion Promotion is the communication between the company that sells the product or service and the consumers.
Promotion has a purpose of influencing the attitudes and behavior in the consumer. Promotion has four basic elements: advertising, public relations, personal sales, and sales promotion (Nobilis, 2010). Advertising is communication through paid mass media. Public Relations is the communication toward the public not only for the product but also geared more for the reputation of the company. The public Relations department handles the press, donations, problems that may occur and any other situation. Personal sales is a way of promotion that contacts the customers directly.
This is salesman to customer contact with the goal of direct promotion. Some companies that use this approach are Tupperware, Avon, Mary Kay Cosmetics, and Pampered Chef. They use salespeople to directly sell their product either door to door or having sales parties in potential customer homes. Sales promotion represents different promotional activities such as discounts, quantity offers, merchandising, or sales. Target uses sales promotions weekly with their weekly ads and sales on different products. They promote this advertisement in a weekly paper distributed through the local newspapers.
Conclusion All organizations must conduct a market survey before introducing a product or service into the market. All stages of the market mix are important in every stage of the product life cycle that includes introduction, growth, maturity, and decline. Products and services are not the only items in the marketing mix. Retailers like Target use the marketing mix not only to sell the products they provide, but to also sell themselves as a retailer who is competitive within the retail market. Target has become number 40 on the Fortune 500 list by staying competitive and knowing how to use the market mix to their advantage.
References
MFP Website Marketing (2004). Retrieved from:
http://www.consultancymarketing.co.uk/place.htm
Nobilis, Laura (2010) Marketing Mix: Price. Biz Development. Retrieved from: http://www.biz-development.com/Marketing/5.6.Marketing-Mix-Price.htm
Perner, Lars (2008) The Marketing Mix: Product. USC Marshall, University of Southern California. Retrieved from: http://www.consumerpsychologist.com/intro_Product.html
