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In order for any company to be successful, it needs to convince its customers that it products or services are worth buying, and make them available at a price and location that customers can reach. That process is called marketing. A company with good products but poor marketing is a company that is headed for failure, or at the very least is a company that is leaving money on the table. A company with poor products and excellent marketing on the other hand, can actually find success in the marketplace.

Traditionally, marketers are taught to pay attention to the four P’s. The four P’s of marketing are Product, Placement, Price, and Promotion. Many modern marketers would add a fifth P for People to reinforce the importance of knowing your customer, although this is usually subsumed in Product. In order to have the right product, you need to know the needs of your customer after all, so many consider the addition of a fifth P by some marketing consultants to be a marketing ploy itself.

Placement, of course, involves making sure your products are where your customers can find them. Placement can refer to actual shelf space locations, which can be very important for items such as supermarket goods, or it can be something as non-physical as an infomercial. Many products are sold only over the telephone or internet and for these, placement of the advertising is of paramount importance.

Price is self-evident, of course, but many factors must be taken into account in order to determine the right price. Often the number of units that can be sold varies depending upon the offering price. This is called price elasticity. The price, in these cases, should generally be set to maximize total revenue rather than maximize total number of units sold. In other words, if I price an item at just $1 over my total costs of say $10, I might sell 100 units for a profit of $100 dollars. If I price it at $5 over my cost, I might sell 25 units for a profit of $125. If I price it at $10 over my costs, I might sell just 11 units for a profit of $110. Using this example, $15 is the price that affords the greatest profit overall, assuming a very simplified view where cost per unit is fixed without regard to the size of the production run.

Promotion, of course, is the job of convincing customers to buy the product. This can be done by informing the customers of the product’s benefits, offering discounts, or any number of other means that set your product apart from the competition. Part of promotion is simply making customers aware that your product exists. Developing a company’s brand name may be a part of this, so that when a consumer is shopping they recognize the brand name even though they have never seen the specific product that is being offered until they are in the store.

Of course, this is the barest outline of some basic marketing principles. To really learn the trade, years of study and experience are required.