Inventory, Markets, Products, and Marketing Essentials

Posted on Mar 19, 2025 in Economy

Functions of Inventory

Companies keep inventories for several reasons, based on the functions they accomplish:

  • Security against uncertainty: Buffers against fluctuations in sales and supply.
  • Production and distribution differentiation: Useful in cases of highly seasonal demand.
  • Economies of scale: Purchasing materials in large quantities allows for quantity discounts and lower transport and transaction costs.
  • Protection against inflation: Hedges against price variability.

Market Types

  • Perfect Competition: A market is considered perfectly competitive when the following conditions are met:

    • Homogeneity of product.
    • Many different buyers and sellers.
    • Complete market knowledge.
    • Free entry and exit from the market.

  • Imperfect Competition: Occurs when any of the characteristics of perfect competition are not met. This includes:

    • Monopoly: Market structure opposite to perfect competition (single seller).
    • Oligopoly: Few sellers and many buyers.
    • Monopolistic Competition: Many buyers and sellers, but the product is not homogeneous.

Product Types

  • Consumer Products: Those that satisfy the needs of individuals.
  • Industrial Products: Physical goods purchased by companies for use in their specific activities. The only difference is the buyer.
  • Services: Intangible or immaterial products.

Product Lifecycle

  • Introduction or Launching Stage: The new product is introduced to the market. It may complement an existing product or represent a new innovation.
  • Growth Stage: Once the first stage has passed, the product is known and experiences strong sales growth.
  • Maturity Stage: The sales growth rate begins to stabilize. Advertising focuses on finding new consumers.
  • Saturation or Decline Stage: Sales fall considerably. The company must consider whether to relaunch the product, find new uses, or discontinue it.

Packaging

Packaging Features

  • Before Purchase:

    • Easy Identification: A product with personality, a representative color.
    • Associations and Contents: Colors, designs, lettering.
    • Impact and Appeal: A combination of form and color that is attractive to consumers.

  • After Purchase:

    • Easy to Open: Devices that allow easy opening are important.
    • Convenience: Providing convenient and easy opening.
    • Ease of Transport and Storage.

Pricing Based on Competition

  • Similar to Competitors: This is done when the product is not highly differentiated.
  • Below Competitors: The company seeks to offset the lower price with a larger number of customers and achieve higher revenues.
  • Above Competitors: The customer perceives the product as superior and is therefore willing to pay more.

Advertising

Objectives

  1. Attract Attention: To persuade the consumer, you must first ensure they know what is being communicated.
  2. Generate Interest: Advertising needs to raise and maintain consumer interest.
  3. Create Desire: The goal of marketing is to satisfy the needs of the consumer.
  4. Achieve Action: The most difficult and most important principle.

Principles of Advertising

  1. Simplicity.
  2. Originality: It must attract attention and create interest.
  3. Message Repetition.
  4. Opportunity: Right time and place.
  5. Sincerity: Advertising must not deceive.

Public Relations (PR)

The company tries to strengthen the relationships it maintains with other stakeholders, whether external or internal to the company.

Merchandising

Set of methods that help to sell a product at the point of sale.

Elements

  1. Use of posters.
  2. Product placement.
  3. Presentation of products in bulk.
  4. Product variety.
  5. Decoration.
  6. Movement and light.
  7. Organization of competitions in the establishment.
  8. Demonstrations and tastings.