The Importance of Marketing Orientation - Assignment Example

1. The importance of this business being marketing oriented Marketing orientation as a concept was developed in the late 1960s and early 1970s at Harvard University. Prior to it there was the previous sales orientation concept that was the dominating concept between the mid 1950s and the early 1970s, and the production orientation that was prevalent prior to the mid 1950s. Marketing orientation is the new trend in modern marketing. What actually marketing orientation means is that the business should be customer centered i.e. the customer should be the number one. A marketing oriented company bases its strategic decisions on the customers and the potential customers' needs. In practice, the 4Ps (Product, Price, Place and Promotion) should be based on the customer the business focuses on. A primary marketing research is needed. What does the customer want, what kind of product, which price is he willing to pay for the particular product and how is this particular customer group going to be approached. Who is the customer, what are his habits, what kind of media does he watch. Why should the customer prefer our business instead of the competitor's. How does s/he like to be served. The answers of these questions will provide the company with valuable info which will help it to gain sustainable competitive advantage. The business London Bites (a takeaway sandwich and snacks shop) is not an innovative one, it does not sell anything exceptional so the customers will not come to it without some efforts from the business side. It also works in a market which is at the maturity stage of the life cycle i.e. competition is intense and there is a strong need for differentiation. This differentiation can be achieved through customer focus. The steps needed to be done for the customer focus are the following: customer research, the information of the research will help to develop the product range and finally customer satisfaction is checked and corrective actions will be taken. London Bites as a marketing oriented firm will have to do the following: Continuous customer search of preferences and satisfaction Broad product range so as to cover the various customer needs Emphasis should be given on how products benefit customers Continuous innovate products Ancillary services like food home delivery should be offered. Due to its nature, London Bites can go even further and adapt the personal marketing orientation approach i.e. the product offerings will be designed for individual customers e.g. offering a wide range of sandwiches that could be prepared in front of the customer based on his/her own preferences. 2. How market segmentation can help this business to operate more effectively Market segmentation is when we divide the market into smaller groups. This is done because all people in the market are not the same. These smaller groups we call them segments. People of each segment are similar to each other i.e. in their preferences, attitudes etc. Due to these similarities it is believed that people will respond the same way to a particular marketing strategy (4Ps). A segmentation in order to be successful it require the segment to be homogeneous and the different segments should heterogeneous among them. The segments have to be stable, measurable, identifiable, accessible and actionable. The segments should also be large and profitable. The variables used for segmentation are the following: geographic (region, climate etc.), demographic (age, gender income, socioeconomic status etc.), psychographic (life-style, personality etc.) and behavioral (benefit sought, product usage rate, brand loyalty etc.) When we combine numerous variables in order to understand in-depth a market segment this is what we call depth segmentation. Market segmentation helps the business understands customers better and therefore target the most profitable and the easier for the business to serve and position the products accordingly. This way i.e. by selecting careful the customers, know their preferences and address to them in an effective way, the business is differentiated and earns a sustainable competitive advantage. In the case of London Bites, the business should analyze carefully the demographics of the area where it is located, see the various customer groups and select the ones that are easier for it to serve, are more profitable and as a market segment they are large. London Bites should also check which customer segment needs are not covered by the competition. 3. The role that marketing communications should play in the future plans of this business The Marketing Communication Mix includes: advertising, public relations, sales, sales promotion and direct marketing. It shows how the business is going to promote the 4Ps to your target customer segment. It is the way to transfer your message on how you create customer value. The market is unpredictable therefore we cannot know which part of the promotion mix is going to be more successful therefore the business should constantly monitor and readapt its marketing communications mix. The marketing communications campaign should be imaginative and attract customers'attention. First of all, it is imperative to construct a marketing communications plan where the communication actions, the various media, the time of appearance (spots, billboards etc.) and the budget should be stated. In addition, it is imperative to state the return on sales that each of these actions will bring. Secondly, the marketing communication campaign should be integrated i.e. it should include all the aspects of the promotion mix. Marketing communications are very important in the future plans of the business. It helps business to establish a strong brand name (creating positive correlations in the minds of the consumers) and brand awareness and this has as a result customers'trust i.e. people will trust the business more since it is a well - known provider. The brand in combination with an excellent customer service makes loyal customers. The loyal customer makes repetitive purchases and is not very price-sensitive. In addition, marketing communication costs decrease since the customer knows the business and is "immune" to competition. London Bites is a start up business i.e. it is in the introduction stage of its life cycle. At this stage, the marketing communication campaign should be quite intense and its goal should be to inform potential customers about the existence of London Bites. The marketing communication costs will be quite high at the growth stage and they will be stabilized at the maturity stage. At the growth stage, the message should change from awareness to preference. At this stage, the competition is growing therefore the message to the customers would be "prefer us to our competitors". Finally, at the growth stage the marketing communications could act as a brand reminder. As it is seen from the above, marketing communications' role is very important and they should always be a significant part of the business marketing plan since they are a basic part of the business marketing strategy. 4. Advice about the pricing strategy for this business Pricing concerns the questions "how much shall we charge for the price of the products" and "how much the customer is willing to pay for these products" A good price should achieve the business goals such as profitability, be logical i.e. what the customers are willing to pay, be consistent with product positioning (does the business want to be considered an expensive, medium or cheap provider). In formulating a price a company should take into consideration the distribution and promotion costs and the quality of the product. London Bites has limited distribution costs (it will only offer delivery at home and at business), its promotion is also limited but the product quality will be above average. So, by having limited costs it is in the position to offer very affordable prices to its customers. Strategically, London Bites can offer some kind of price discrimination i.e. it can implement second and third degree price discrimination. The second degree price discrimination is when the business offers different prices according to the quantity sold. So, London Bites can have special discounts to people buying large quantities of food. The third degree price discrimination is when the business offers different prices by mainly customer segment. London Bites may offer different prices to regular business professionals that have their breakfast and lunch delivered by London Bites. 5. The importance of customer service Making the customer happy should be London Bites No 1 goal because customer satisfaction can lead to sustainable competitive advantage. Customer service should be an integral part of London Bites overall marketing strategy. It is very important the commitment to customer service to start from the owner. The owner should not only believe in customer service but should try hard to exceed customers' expectations. London Bites faces intense competition. If it fails to provide goods/services when the customers want them then the competition will do it and soon London Bites will be out of business. Not only the owner but also London Bites' employees need adequate training in order to provide excellent customer service. Every employee is accountable for serving customers but the employees need to know what is expected of them when they interact with customers. In addition to training, a pleasant personality is also required by the employees. A takeaway is for people who like to offer services to people. You can train them but you cannot train anyone to smile and be polite. It's part of his / her personality. There need to be procedures in place, procedures for serving, delivering the food on time and procedures for handling customer complaints. The customer should feel that employees really care for his/her needs and that s/he treats him politely. London Bites should go the extra mile and provide the customer with benefits. The companies that provide greater benefits to customers are the winners. The customer's concern is not only price, the customer values service, listening, politeness. The business that can provide these to customers can ask a higher price for their products/services and they can be placed as winners at the market. References BLATTBERG, R. C., DEIGHTON J.ed.1996.Manage Marketing by the Customer Equity Test. Harvard Business Review July-August BLATTBERG, R. C., BRIESCH, R.,FOX, E. ed.1995.How promotions work. 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