Thursday, October 24, 2019
Principles of marketing Essay
1. Introduction  1.a What is marketing? Elements of marketing: Marketing is a business philosophy that seeks to address customers wants and needs by either determining what a customer wants or anticipating customer demands and then producing goods and services that meet these requirements. The marketing concept therefore differs significantly from the selling and the production concept, where it was what the firm produced that was sold. The production concept believed that all production sells and what is needed is a selling effort. In marked contrast, the marketing concept works first at determining what the customer needs and then producing the same so that the customer is satisfied. The elements of marketing include the customer, the product, the value of the product and the want it addresses. 1.b Advantages of marketing and criticism: The marketing approach ensures that the seller does not make mistakes in determining what the market demands. There is thus that much efficiency in the marketplace as production capacities are built depending on market feedback and what customers want. Also, as the marketing department knows what the customer wants, it is able to provide an efficient answer and design, at a cost that the customer is willing to pay. The marketing approach has also been criticized for its attempt at forecasting and determining personal choices. It is also criticized for influencing customers towards goods and services that they may actually not need, but are driven to these products through clever strategies that convert simple desires into burning needs. Marketing also has been criticized for using external influences through advertising and promotions to make people demand goods that they would otherwise not have found useful. Leveraging customer psychology to get people influenced by imaginary reference groups that they aspire to belong to, also is another tool used by marketing that is often criticized for its ability to attract customers. Modern marketing, with all available technology and databases that track customer behaviour, is a weapon that can be used by firms wanting to grab large market shares. It therefore tends to be unethical at times and needs string regulatory mechanisms. 1.c The marketing function The marketing function is a function that includes all activities that contribute to the marketing strategy and the marketing process. This function therefore covers all aspects of identifying customers, determining their needs, estimating wants, calculating total demand, building supply chains and constructing marketing promotion strategies through all available marketing channels. This also includes marketing controls and control systems that ensure that all activities undertaken by marketing departments are consistent with and in line with the objectives of the firm. The marketing planning and control mechanism tracks the various activities undertaken by the firm, and determines if the process is going as per plan. 1.d Marketing management: Monitoring and evaluating its marketing processes regularly, a firm is able to take corrective action. The monitoring of marketing activities is a specialized task that ensures the entire chain of activities is checked regularly, constant feedback taken and corrective measures instituted that bring the plan back to the path desired so the firm’s overall objectives are met and are not deviated from. The marketing function starts with a marketing plan that is a written statement of objectives and processes that the firm would undertake to meet its goals. This plan is constantly recalled to ensure the control system and the action plan sticks to the strategy that has been drafted. The plan takes into account the economic environment the firm exists in, the regulatory framework, and the demographic characteristics of the population, competitive forces and product characteristics. The marketing mix            Product: The marketing mix is central to any marketing plan that a marketing strategy evolves. The marketing mix primarily looks at the four components that have defined marketing strategy. These four major components of a marketing plan are the Product, Place, Price and Promotion. The first – product, focuses on making the firm’s product something that is of value for the customer, is constantly redefined to meet changing tastes and is what is actually something that meets market demand. The product that is marketed is defined by its quality, its functionality, the appearance, the service that comes with the product and the support provided to the customer. It is important for the firm to produce a product that is of high quality. In a competitive market, it is no longer possible to sell a product that is not of high quality as there are several substitutes available and competitors are always ready to improve quality. Hence the product is defined by it functionality and the brand that is built around the product. The brand defines product quality and provides customers with information about the product even before the product is bought and used. Additionally, the product is defined by what the firm provides by way of after sales support and service. Modern brands provide products with warranties that cover the risk of failure after the product is sold to the customer. Brands are built around the various facets of the product sold. A brand carries an inbuilt guarantee of the usefulness of the product. Brand building is essential to marketing management and defines the product part of the marketing mix. Products are also made so as to acquire certain niches in the market and this can be either done through specific functionalities or through product differentiation. Place: The second component is place and this focuses on the fact that the product would be made available to the customer at the right time and at the right place. It also includes the aspect that the product should also be available in the right quantities. Non-availability will move customers away to another substitute while too large a stick will increase inventory costs. So the correct balance needs to be struck. The place component of the marketing mix depends on the logistics that go into supplying the product to the customer at the right place and at the right time. The logistics department must identify appropriate locations, the appropriate channels of distribution, the channel partners that take the product to the customer and ensure maximum coverage. The place also defines the point of contact with the customer, the point of purchase advertising and the support locations. Modern technology has added a new dimension to place by way of providing Internet and mobile access to marketers. Using mobile phones and online marketing, customers are able to access distant locations at the click of a mouse and check out the product in a virtual environment. Delivery is quick because of the developments in transportation and travel. Support and service can now be provided through distant, centralized locations that are accessible through support centers and call centers. Successful marketing in today’s environment is a function of how well the marketer leverages modern technology by way of online brochures, online advertising and payment gateways.            Price: The price of course is a critical component of the marketing mix. In a competitive market where goods are homogenous and perfectly substitutable, it is price that would ensure some buyers for a new product. On the other hand, in similar situations, a product that is priced high could occupy the position of a superior good and guarantees a premium only because it attracts prestige and value to the product. In goods and services that are price elastic, price can e used as a strategic tool to increase margins, whereas in price inelastic markets, prices need to be kept stable. A large number of marketing strategies focus on the price range a product offers and the income levels and consumption characteristics of the customer in the neighborhood.            Pricing is also a strategy that incorporates list prices and how they are estimated. The list price takes into account the competition and the channel margins. Where the marketer is using a push strategy, pricing must include incentives to retailers and wholesalers that enable them to push the product among the customers. Pricing also includes the strategy that involves using discounting and discounting sales to increase volumes periodically. Today pricing strategies also have to keep in mind leasing options and installment based payments. They must therefore allow for various financing options.            Promotion: The other important component of the marketing mix is the promotion package that is used by the marketer. Especially in a new market, where a product is being launched and introduced, it is critical for the market to accept the new product. Here is where the promotional aspect acquires a new dimension compared to the promotional strategy of a product that is entering a competitive market. Promotional strategies need to be carefully defined depending on the nature of the product and the market characteristics. The most important promotional tool used worldwide is advertising and this in the modern world is a strategic decision that must take into account the advertising mix that calculates what amounts of money and effort be spent on television, print media, internet advertising, bill boards, radio stations and mail brochures.            Also, in the days of consumer movements and regulatory mechanisms, it is important for promotion to concentrate on public relations. Most brands today spend a lot of effort in maintaining public relations through regular contact with the consumers and the media. Also promotion in specific goods and services is carried out through a direct sales network that requires a great amount of coordination and networking. It is also important to remember that, given its scope and coverage, promotion is an activity that requires scientific budgeting and monitoring. Promotion as an activity needs to cover the target audience, the end customer, the opinion makers and the potential buyers and channel members that could be part of the future supply chain.            The 4 P marketing mix model has been the one most used by various marketers all over the world and ensures that each of the marketing function gets covered and focused on. There have been those who have argued for a 5 P and even a 7 P marketing mix, especially to cover service products. The one extra P that is most often talked about is People, the human resource component that actually makes the efforts in tackling the 4 Ps. In any marketing firm, where customers need to be convinced and must trust the product, it is the people handling the product, the promotion and the supply chain that need to be extremely well trained, motivated and understanding of customer demands. Therefore it is often argued that the marketing mix must give an equal emphasis on its people and their training and incentives. However the 4 Ps discussed above are the most critical and need to be focused on to be able to successfully compete at the market place. Buyer behaviour            3.a Purchase decision: Purchase decision is a complex mechanism that involves a .large number of steps. The buyer behaves differently for high involvement and low involvement products. Products that are expensive and are in the nature of assets are high involvement products where the consumer takes time and makes efforts to look at various possible substitutes and competitors before making the purchase decision. The purchase decision is therefore sees to go through the various steps. There is a need recognition phase where the marketing begins. Here the buyer defines what his needs are the starts exploring possibilities that would solve the need. High involvement products there fore need great amounts of research before the buyer is able to decide. On daily consumables like soaps and toothpaste the buyer may not be as highly involved and easily makes decisions. Therefore after the need recognition process, the buyer then goes of ran information search through which a set of alternatives emerge. These are then weighed against various constraints and then the actual purchase decision is made. What follows is the post purchase behaviour and in this the buyer may actually regret making the decision or may go away satisfied. Marketers need to understand what is referred to as post purchase dissonance to be able to ensure good word of mouth promotion from existing customers.            3b. Reference groups, culture: Of course buyer behaviour depends a great deal on the cultural background where the market exists. In savings oriented societies buyer behaviour is quite different form societies marked by conspicuous consumption. Also buyers in certain societies are bound to make far more careful decisions than in certain other cultural frameworks. Also groups tend to alter behaviour is different settings. The reference group is a major decision maker for most customers who would like to reach a group that they aspire to belong to through similar buyer behaviour. This is why a large number of celebrities are used to sell products and promote them. To influence buyers who consider these celebrities as these reference groups and inspirational groups. 4. New product development            Market plans and market strategies therefore are complex mechanism that must look at various aspects of buyer behaviour, product characteristics and promotional strategies. Very often in such mechanisms, it becomes critical for firms to make decisions regarding innovation and new product development,. It could sometimes to easy for a firm to simply provide a market with existing demand and give the same product that exists at a better price and better place. However this might not work as the first mover ahs an advantage. Also the demand levels keep changing as culture changes and incomes change.            Therefore new products must be offered and innovations required both in developing new products, in new segmentation strategies, in product differentiation, in defining new niche markets and in being able to design both push and pull promotional strategies. Innovation is the name of the game as markets become more competitive and the customer more demanding. Market strategy demands that innovative strategies and products be designed keeping the basics in mind – that of the need to study and satisfy customer demand. Marketing is a science that attempts at assessing demand and developing products and promotions that meet this demand at appropriate prices and places. Innovation in marketing must keep this design in mind and develop new processes and products that work at the market place. References Moorman C. and Rust T. 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