Finance and Business

Industrial Products of Marketing

Although the specific marketing problems and strategies will necessarily be different in certain respects,their essential principles will be seen to be basically the same. For instance, the decision to set up a steel works is a marketing decision like any other since a steel works is a marketing factory -but of a specialized  kind- for producing goods that other industries may need, depending on to state of demand for their own products.

Thus the assesment of the demand on the part of the user-industries will be the basis on which the decision to n a steel works must rest:; but in order to make this assesment of user-demand, it will be necessary to look  at the trends in the demand for the final products which these user-industries make, in addition to forming an opinion about the trends in growth in the economy as a whole.

If the marketing man were to find, for instance, that there was a pronounced trend in favour of making cars out of fibre-glass, other plastic materials, and non-ferrous alloys, this would be a most important factor to set against the arguments for setting up a new steel works, since one of the important user-industries was clearly moving into the market for materials other than steel.

On the other hand, a trend towards using more steel in domestic house construction would be an important factor in favour; and so on with the many aspects of personal and business activity that have bearing on the assesment of potential profitability, and of risk, associated with the plan to erect a new steel works.

Product Marketing Modern Economy

This is second series of product marketing. The modern economy, with its emphasis upon specialization in production, places a handicap on anyone who attempts to produce in small quantities or, worse still, in single units; the costs are too high. The economic scale which the economists talk about, are only to be obtained after certain volume of production has been reached; that is to say it is cheaper per unit (depending on the product, of course) to produce 10,000 of a thing than to produce only one or even a few hundred, and cheaper still, in most case, to produce a million of them.

And yet, although these economies of scale can indeed be obtained, the trouble is that you have to be confident that if you produce a million bikinis, there are going to be enough women who will want to buy them in the particular materials, colours, designs, and sizes, in which you have decided to market them. Also of course, your judgment about the weather, and the time when your bikinis should be available must be justified by events.

These factors of time and place, of quantity and unit suitability, become increasingly important the greater the “economic unit of production” becomes, that is, the number of units of product below which is would be too expensive to produce for a given selling price (Ralph Glasser).

If a car manufacturer, for instance, were to produce only 500 cars of a particular model, each car would would cost more than if he were producing 50,000 since the expenditure on the various tooling-up processes would be essentially the same for either quantity.

Product in Marketing Perspective

The product, as far as marketing is concerned, is any item – whether it can be consumed, seen, experienced, worn, or used to make something to provide at a given time and place and in certain units, which is designed to fulfil certain desires, and for which people are prepared to pay a price that makes it worth the producer`s efforts to provide it.

By adding… at a price that makes it worth the producer`s effort to provide, we give emphasis to the vital function of marketing in, firstly selecting for investment the product which maximizes the arning power by all available means.

To say this, is really to bring out the fact that marketing judgements basically determine the directions in which capital resources will be deployed. Many of us will have heard the old joke about the salesman who was so persuasive that “He could even sell a refrigerator to an Eskimo!” – and yet, even if by some chance one refrigerator was indeed sold to an Eskimo, it would hardly be considered that the marketing situation justified the investment of capital in producing refrigerators for the Eskimos!

Yet this decision would have nothing to do with the intrinsic usefulness of refrigerators as such. In the tropics, for instance, the marketing of refrigeration equipment has certain very obvious factors to recommend it -assuming, of course, that other essential requirements exist for the exploitation of the market, for example, a reasonably sophisticated way of life, appropiate adequate purchasing power in a large enough section of the population, and other social and economic factors.

Ralph Glasser saying therefor, that the product must not only fulfil certain desires, but that these desires must be felt by a sufficiently large number of people.