MARKETING, COSTING & PRICING

WHAT IS MARKETING?
It is the process which helps us identify our customers, their needs and how to make profit while fulfilling
those needs. In short it is all the processes a business uses to sell their product and make profits.

THE 4 P’S OF MARKETING:

1. PRODUCT

Product refers to goods/services produced for sale, the product /service should relate to the needs and
wants of the customers

Some important questions you need to ask yourself include;

• What products/services do I sell?

• Why did I decide to sell these products?

• Do I have the products customers want?

• Do any of my products not sell well?

• Do I stock products that do not sell well?

- Always listen to what your customers like and don’t like. When their needs change, change your
products and services to satisfy the new needs.
- Do more market research in order to provide those products or services and increase your sales.
- If your product is not selling well, think of new ideas like finding new customers.

2. PRICING

Pricing refers to the process of setting a price for a product/service. Your prices must be low enough to
attract customers to buy and high enough to earn your business a profit.

To set your price you need to;

• Know your costs.

• Know how much customers are willing to pay.

• Know your competitors' prices.

• Know how to make your prices more attractive

3. PLACE

Place means the different ways of getting your products or services to your customers. It is also referred
to as distribution. If your business is not located near your customers, you must find ways to get your
products/services to where it is easy for customers to buy. You can distribute your products to your
customers through;
• Selling directly to the consumers of the products.

• Retail distribution and wholesale distribution.

4. PROMOTION

Promotion means informing your customers of your products and services and attracting them to buy
them. Promotion includes advertising, sales promotion, publicity and personal selling. Use advertising to
make customers more interested in buying your products or services.

Some useful ways of advertising include signs, boards, posters, handouts, business cards, pricelists,
photos and newspapers.

You can use sales promotion to make customers buy more when they come to your business, you could
also;

• Ensure you maintain attractive displays.

• Let customers try new products.

• Have competitions

• Give demonstrations

• Sell complementary products (products that go together)

MARKET RESEARCH:

Market research: is the gathering of information that ties a small enterprise to its customers. It provides
the information that is necessary for companies to correctly position their product in the marketplace and
offer the best combination of product, price, place or distribution, promotion, and person.

Ask other business selling similar products these questions:

1. What prices do they charge?

2. What exactly do they sell?
3. How do their products/services differ from yours?
4. Where do they get their inputs?
5. Where do they sell?
6. How do they promote their product/service?

COSTING:

Costing is the process of establishing the exact amount paid to produce or provide a product or a service.

To be able to set your prices and make financial plans, you need to calculate the cost of manufacturing or
providing your products or services. Costs are all the money needed to operate your business. Costing is
the way you calculate the total cost of making or selling a product, or providing a service. It will allow
you to calculate the net profit you can make from your business.
Calculating the cost of your products is very important before deciding the price of your products.

PRICING:

Pricing is the monetary value of a product or service that you charge to cover your total costs and profit
that you desire on each unit of product or service. Here is an example of how to set your prices :

Your cost = 13,000

Mark up - 20% = 2,600
Selling price 15,600

Cost = 13,000
Profit = 2,600
The amount of your mark up should depend on the market research that you have conducted.