Marketing is the process of building consumer relation by promoting products and services obtaining reasonable profit as well as forecasting the future. In the process, consumer’s needs and requirements are identified, the product is manufactured or the service is launched and through the market the products and services are made available to the consumers.
Different people have defined marketing in different ways. According to CIM, 2001, “Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitability”. What it means is that, marketing is the process of identifying consumer needs, producing the required products trying to satisfy the consumers with the quality products at a reasonable price and profit.
AMA, 2008 defines Marketing as an activity of producing products while communicating with the consumers and providing offerings which have good value for money to the consumers and the society as a whole.
The simplest definition of Marketing defined by Adcock et al, 2007 is, “The right product, in the right place at the right time and at the right price”. This means the right product according to the needs of the consumers made available in the right place at the right time with the reasonable price is called as Marketing.
All three definitions of marketing defined above have some similarities and differences. Talking about similarities, all three definitions point at the consumer’s needs which should be identified before the product is produces. These definitions have used independent language but are inter-linked with each other. For instance, the first definition defines about communication and satisfaction. The second one defines about communication and offerings. The third one defines about the right product, place, price and time. These all are related to each other because customers are satisfied if their needs are met at the right place, right time, right price as well as continuous communication and offerings.
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Although having similar points between each other, they also have differences which effect the definition of marketing. The definition given by CIM says that the profit is the outcome of identifying, anticipating and satisfying consumer needs. But second and third definitions haven’t mentioned anything about profit. In the second definition, the stake-holders are included but first and third definitions haven’t mentioned them. Advancing to the definition by Adcock et al, i.e. the third definition, it has talked about price which is missing in the first and second definitions.
Marketing itself is a broad term. Therefore, it is hard to define marketing in the actual world. But all the definitions contribute to the marketing and are inter-related to each other despite the fact that the differences exists in their defining style and target.
1.2 How is a marketing oriented organization different from alternative orientations?
There are different companies which use different approach and focus on different orientation of business to help the company operate effectively. These orientations are the guideline of the companies and their existence in the market.
There are four main business orientations. They are:
Consumer Orientation/Marketing Concept
Production Orientation: In this orientation, the companies focus on the product. They don’t care about what a consumer wants or needs. They usually focus on what the consumers may want. They produce or launch new products in the market and then analyze the impact of the product to the consumers. This orientation has a high risk of being unsuccessful because they don’t know what the consumers want. One good example of product orientation is I pad from Apple.
Sales Orientation: In this orientation, the companies focus on the sales of the manufactured product. They come up with different sales scheme and offers as well as marketing of the product. They try to sell their products to the consumers by persuading them to buy the product. They don’t care whether the consumers want the product or not but they just try to sell them off. Usually this orientation is combined and implemented by some companies with production orientation. They produce the products and sell them in a various ways. This is the reason that this orientation only focuses on the sales.
Financial orientation: This orientation mainly focuses on profit. Business organizations try to find customers who are willing to pay more for the products. They use the cheapest method to produce the products. Usually the prices of their products are high in order to earn maximum profit. This orientation focuses on the profit and financial assets. This orientation is not successful to build strong relation with the consumers in a long term basis and also fail to stay up with the changing markets.
Marketing concept: marketing orientation/concept is the most effective and modernized form of business orientation because it starts before the production of the product and continues even after the product is launched. Before the production, the companies spend money and time to research the market. From the research, they determine the needs of t he consumers. According to the needs of the consumers, they produce the product and make available in the market. They use different promotional tools to promote their products in order to increase their customers. They also extract the feedbacks from the customers and try to improve or develop the product in order to extend the live of the product in the market.
The difference between marketing concept and other three orientations are that except marketing concept, no other orientations focuses on customer satisfaction completely. Other orientations only try to increase their business and earn profit but marketing orientation focuses on customer satisfaction as well as maintains the relation with the customers. This is the main reason marketing orientation/concept is the most effective guideline of business and is better than other orientations in any business empire.
1.3 What are the processes involved in running a marketing oriented company?
The processes involved in running a marketing oriented company are Competitor Analysis, Marketing Audit, SWOT Analysis, Pest Analysis, Goals, Education, Training, etc. Competitor Analysis involves the process where the competitors existing in the market are analysed in order to know their position and compare them with our company. This process helps us to know the weaknesses and strengths of the products and services. The company can also solve the existing problem in the market for maintainable marketing. As the company can get information about their competitors, they can feel challenging market and therefore, try to stay ahead from each other.
Marketing Audit is an inclusive, liberated, organized and periodic analysis of a company’s marketing situation, aims, tactics and actions with an opinion to shaping future of the company mentioning a strategy of action to increase the company’s marketing position. The marketing audit is carried out in a regular basis in order to know all the latest information about the
Any organisation has its own culture which defines its goals. In a marketing oriented company, customer care is the most important thing and thus should be a customer focus from the very beginning. Therefore, in marketing oriented customer satisfaction and fulfilment is the most important thing in achieving the organisational goals and targets. Even, the motivation factors for such companies depend on the customer’s satisfaction and the employees and the crew members are motivated towards attaining it.
Secondly, marketing audit is a Strategic tool that is actually used to evaluate the company’s potentials over a period in a systematic way. In a market based organisation, this audit is done on a period basis and is extremely important to know about the company’s true potential in the market, knowing the limitations and thereby maintaining new marketing plans, where the plans are customer care based.
Training and education is another factor involved in running a marketing oriented company. Organisations are always full of competition and therefore the workers require a lot of hard work and training. The Organisation through such programs helps in the skill development and also motivates the workers and this can create employee pride. This will help the company in the long term.
SWOT refers to the Strength, weaknesses, opportunities and threats. This analysis is a tool used for auditing and the business environment. It is the first stage of planning. This helps in organisation goals, programs and capacities to the social environment. SWOT can be categorised into two formats. Strength and weakness falls under the internal whereas opportunities and threats fall under the external factors.
PEST analysis is another process in marketing orientation. This involves political, economic, Social and technological factors. A business must always abide by the political rules of the specific country. The economic factors are also considered in order to improve the country’s economy and not hampering it. It is also very important to consider social and technological factors before commencing a business.
1.4 Critically analyze the costs and benefits of a customer-led orientation.
There are different companies which use different approach and target on different orientation of business to help the company operate effectively. In this business orientation, there are four main business orientations. But the most successful and effective orientation is the marketing orientation/customer-led orientation.
Customer-led orientation is the guideline followed by most of the companies because it is the modern concept of marketing. This orientation tries to find and research what the consumers want. Then only the business organizations/industries produce the product which will certainly satisfy the customers.
Despite the fact that customer-led orientation is the most effective approach to the business firms and the consumers, it has some of the advantages and disadvantages.
One of the biggest advantages of customer-led orientation is the delivery of customer satisfaction and fulfillment of their needs. Before advancing to produce or launch a product, the business first researches the needs and demands of its target customers. So, there is a relatively high chance of sales and customer satisfaction. But the disadvantage of this orientation is the cost of the research in order to understand the needs and demands of the customers in the market. The company or the business has to spend a lot of money and time for research. However, the business will have a strong and valuable understanding of customers’ need through market research.
Another advantage of market orientation is that new products which are introduced in the market through research have greater chance of success. The business can attract more customers and can satisfy the customers easily. But the disadvantage of this orientation is that there will be constant change in the demands of the consumers. So, the future of the market is unpredictable. It is more expensive to introduce new products from time to time because of research in the market and it is not possible to forecast the future of the products.
Assignment Part 2 & 3:
2.1 What are the macro and micro considerations that will affect your marketing decisions?
As we all know that marketing decisions should be taken into considerations by understanding the market and dividing it to different possible segments. We should analyze the market in various segments so that the business can run smoothly. In order to help the business to decide the market, Macro & Micro considerations are implemented in the organization.
The Macro & Micro considerations are as follows:
Macro: The business organization has to look after many considerations before starting or launching any product in the market. P.E.S.T. analysis is mainly referred to Macro considerations. The PEST analysis includes Political, Economic, Social and Technology. The political status and law of the country is highly affects the market. For instance, in U.K. and many other countries, people cannot sell alcohols and tobaccos without holding a legal permission. My company produces various kinds of Cigarettes. So, in U.K. the market of cigarettes is quite higher and due to political conditions, my products are available only in the off-license shops.
Economic factors also affect the market. The business should know what the suitable price of the product is and where to make them available. If the area is a resident of poor people, they cannot afford to buy expensive products. The social and technological factors also have its effects on the market. If my company produces cigarettes with high amount of nicotine, there will be disturbance in the social behaviors in the society due to their health.
Micro: As like Macro considerations, there are Micro considerations which the business organization should analyze properly. S.W.O.T. analysis is the main factors affecting the market. The extended form of S.W.O.T. is Strength, Weakness, Opportunities and Threats.
My company produces cigarettes with various quality and forms. The strength of my product is that my company has its own farming for tobacco plants and therefore produces high quality cigarettes in reasonable price. My company also produces cigarettes with low amount of nicotine which is very popular among females. The main strength of my product is the wide range of products which are always in demand.
The weakness of my product is the health of the customers in a long term basis. We produce high quality cigarettes. So the nicotine present in some variety of Cigarette is high too.
The opportunities come under the company in a various forms. The threat to the company is the product itself because the packaging of my product may demote the product itself due to the packaging. According to the law, we have to mention “SMOKING IS INJURIOUS TO HEALTH” or something like that which warns the customers.
Therefore, these are the Macro & Micro considerations that effect the marketing decisions.
2.2 Segment the market for your product/service. Discuss a series of possible segments.
Segmentation of market is done based on the following factors:
Before commencing this business I must first segment the market. Demographic aspect refers to the age, gender, income, occupation, ethnic background. For my paper manufacturing company, demographic factor does not affect much. It’s because everyone use paper products. People belonging to kidult hood are mostly prone to use paper products in terms of greeting cards and other paper accessories. Use of papers in terms of copies and books is widely used by every age group, sex, and by every ethnic background. Hence, income and occupation factor also does not affect negative because people easily afford. Hence, demographic aspect supports this business. Similarly, psychographic factors refer to the psychology of the people.
2.3 Choose a targeting strategy for your product and justify why you choose this approach.
I have chosen paper as my product and I would choose a differentiated marketing strategy. It is because paper has become one of the most daily used products in the market. Every day the use of paper cannot be cut off. This is because people use papers in various ways and for different use. People mostly use papers as copies in offices and schools, cards, tissues, packaging and so on. Hence, if my business could manufacture different types of papers then it would surely make a good market.
2.4 Explain the influence of buyer behaviour on your marketing activities.
According to Maslow’s Hierarchy of needs, the buyers behaviour change with levels starting from the physiological to Self Actualization.
First, the physiological needs that are the survival needs (basic needs) arise and when these needs are met then the needs level increase gradually. In this the buyer tends in attaining the safety and security needs. These include needs getting Insurance, safe and supporting neighbourhood, and job security, shelter from the environment, balance backup and much more. In brief, this stage is all about getting secure and avoidance of getting back to the physiological needs. Similarly, after the safety needs now the buyer’s behaviour change to social needs. Now, they tend to socialize and get involved into love, care and the affections relating to emotions because they want to attain social belongings to care and to be cared. Thus, these needs are fulfilled through social relations such as friendships, romantic attachments, family interactions, participating in religious beliefs and festivals. Following the social needs, esteem needs comes next. These needs include desire of personal worth and values that make the person feel and become unique in the society. Hence, people try to gain more and more financially to strengthen their social standards. Finally, the stage goes to the self actualization where people start to see into their own true potential and accomplish on something that they really desire for.
My chosen product is paper and my business manufactures different kinds of papers. Since, papers are used commonly in all aspects and in different areas differently, my product is actually applicable in almost all aspects of changing buyer’s behaviours and needs. Paper product may not fall under the basic necessities of the buyer but can fall under safety and security needs indirectly. Such as the use of bank statements, insurance papers, proof of ownership and lots of other similar papers that can provide security or a proof of several other activities that people face. Similarly, the Society at large use papers in huge amount in their daily life. They are mostly used in different kinds of paper products for social use such as greeting cards and invitations that can actually help people improve in the affection related activities. Hence, paper does fall under the social needs of the people. Therefore, papers are important in all contexts even in the esteem needs and self actualization.
3.1 How can you develop your product to sustain a competitive advantage?
I can sustain a competitive advantage by giving good design to the papers such as people tend to buy copies, notebooks and other papers which have been beautifully designed covers and size. Some paper products such as relating to packaging activities, the coverings can be designed with different colours.
Similarly, technology can also be used in some of the paper products such as protecting the personal diary from strangers giving a different password system. This can allow the advantage of personal belongings.
My paper business is a very common business. So, I must segment my business and produce different categories of paper products. So, goods must be categorised according to the use. Papers relating to storage and packaging, papers relating to official matters, copies and blank pages and those relating to household work and decorations all such things can be taken into account.
Also the most of all is the quality. If the paper quality can be increased then people can easily choose my product. For this, I can manufacture beautifully designed copies and notebooks with more smoothness making the customer easier to write.
3.2 How can you distribute your product to maximise customer convenience?
My product is paper and everyone use papers in different ways and purpose. Hence, my customers are everywhere. The only thing I need to do is to examine who use my products in high scale. I can easily find out that I will be having a good market more on schools, offices and institutions. Therefore, my paper products can be made more easily available to the nearest stationary shops. In addition to this, Schools and offices are busy places where people mostly may not have time to make a purchase. So, I can make the system available for online order as well. My business can use and check online the mail orders and making arrangements for delivery. In some cases, where the products are ordered in large quantities can actually buy from wholesalers. So retailer can directly buy from wholesalers who make easily make available to the general public.
Direct sales can also be used in selling cards, invitations and other accessories.
3.3 What are your pricing strategy options?
The pricing strategies are setting up prices for the company’s product. These strategies depend upon the organisation’s objectives and to what methods it tackles in the market.
There are different types of strategies. They are:
Penetration Strategies: Theses strategies refer to setting up low prices and creating market for the product.
Skimming Strategies: These strategies refer to making the market for the product even wider by increasing the price and gradually decreasing it.
Competition Strategies: These strategies refer to setting up prices comparing the prices that are already set up by the competitors.
Product line pricing: These strategies refer to pricing different products within the same product range in different price points.
Bundle pricing: These strategies refer to gatherings of products into a group and selling them at low prices.
Psychological pricing: These strategies refer to setting up the price for the product high so that the customers have positive psychological effect upon the products quality.
Premium pricing: The price is set high to show its exclusiveness.
Optional pricing: These strategies refer to the selling of optional items along with the product.
For my paper product, I would choose competition strategy because paper manufacturing companies are common. So, In order to target a good market I need to go along with the competitors. I would also bring a little psychological strategy by keeping the price rate a little high than my competitors so as to affect the customers psychologically and making them feel that my product is more qualitative and worth it.
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3.4 How will you promote your product/service?
In order to make my paper product known to the customers, I would advertise my products through various means and mediums. Since, use of paper is common my customers are everywhere and I will not need to allocate hefty amounts on advertising. This is because there are lots of businesses that use my products for their production and use. Since, I produce different types of paper products such as hard papers for making cartoon boxes, soft and smooth papers for making copies and notebooks and much more similarly produced papers used for cards, envelopes and other paper related decorations.
Since, paper products such as cards, envelopes, and other paper related accessories can be sold in shops and stores, it can directly advertise to the customers. Similarly, Medias such as radios, televisions and internet can be used making people aware that quality papers and paper goods are available at affordable prices. Advertisement such as these help the customers know the place where they can get these materials.
Online system can also be introduced. Many of the customers prefer to buy online because it’s easy and simple. Thus, if online order of goods from the online store is available to the customers then the market can become even better and create more competitive advantage. Similarly, some of the paper items can be sold with other businesses, such as cards along with bouquet.
Likewise, understanding the psychology of the people the products can be designed so as to attract more customers. For Example: Children tend to buy products that have outer design with cartoons; female children tend to buy more of glittery products. Such psychographic issues can also be used for advertising.
3.5 Consider the elements of people, process and physical evidence for your marketing mix.
People, process and physical elements are always the core of any business organisation. Thus, these are required to any or the organisation or business.
My business organisation manufactures paper products along with various other decorative goods. Therefore, highly skilled and creative people are required on administrative areas in my organisation. My company always looks forward in bringing new ideas and designs. So, the employees are given equal chances to show their creativity. With this process, my business can actually explore hidden talents that can actually help my business to remain strong. This is all about creating new ideas everyday and every time. Likewise, people who are not that creative but are able to generate labour will be used in the manufacturing process converting the raw materials into basic products. My business is also based on the internet so there is the existence of online stores. So, I would assign a separate department for online activities.
Assignment Part 4:
4.1 & 4.3 Explain how the marketing mix for your product would differ in the two separate markets of the UK and your home country.
There are 7p’s in marketing mix which differs in two separate markets of the UK and my Home Country Nepal. They are:
My company produces cigarettes from home grown high quality tobaccos. The product comes in different size and taste but the quality is the same. The market has different cigarettes from my company like Gold, Silver, Green and Blue colored packaging. The Golden packet contains cigarettes with 0.9 mg nicotine. Silver Packet contains 0.6 mg nicotine which is lighter than the gold one. The Blue pack contains 0.3 mg nicotine which is also called light cigarettes. The Green packet contains menthol cigarettes with 0.4 mg nicotine. All the products mentioned above come in king size and super king size.
Place is important factor in marketing mix. My products are made available to different off license shops and supermarkets. Customers have easy access to the products whenever they want it because they can buy the cigarettes online too. My products never go out of stock because of wide range of the products.
Price is quite the same for my products as other cigarettes in the market. But customers are more likely to buy my products because of good value and quality for their money. I have used competition pricing strategy for my products and this has increased the sales of my products.
Talking about the marketing status in my country Nepal, the price of my products is cheaper in comparison to U.K. although the quality is the same. This is because my company is situated in Nepal and the costs of my products rise in U.K. as they are all exported from my country. The other reason is the difference in per capita income between Nepal and U.K.
4.2 Explain the differences in marketing products and services to organizations rather than consumers.
In a simple definition, Marketing is a process of raising the status of a product promoting relation with consumers and forecasting the future in order to gain profit. Consumers are always related to the marketing. However, there are two types of consumers, one is business organization and the other is an individual.
Business to business marketing means selling the products to other business organizations rather than individual consumers. Business to business marketing takes place between manufacturing companies. The business company which depends on the products of other company is the consumer for the company which supplies products to that company.
. Mostly these products includes the raw materials that other business use for the manufacturing. Those companies who depend upon the products of other businesses are actually the customers for the supplying company. This type of marketing does not involve much advertising because the customer company relies solely upon it. Sometimes this marketing may involve advertising but it’s given less priority. Hence, less amount of money is spent in this marketing process. Similarly, business to business marketing is simple because there is always mutual understanding in between the organisations. The supplying company generally know much about the customer organisation as these types of companies can be limited. So, Marketing process much more easily done and does not require dealing into each and every aspect. This marketing is not about individuals and what a person wants for the organisation but rather it’s all about the organisational needs.
Likewise, Business to customers is about the customer’s individual interest. In this the supplying company does not know much about the customers. Since this marketing refers to individuals, the organisation finds uncountable numbers of customers in market. In addition to this, there are both chances of getting and not getting their transactions into the business. Hence, this marketing requires focusing more on advertising and it is not possible to deal with each and every customer to get their attention. So, huge amount of money is spent on this marketing process.
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