The Role of Marketing in Organizations - Essay Example

TABLE OF CONTENTS Introduction 2 2 Marketing Theory, Principles and Application 4 2 Communications Opportunity Analysis 4 2.2 Communication and Market Analysis Paradigms 6 2.2.1 SWOT 6 2.3 Application of Principles to Practice 9 2.4 Consumer Involvement 12 2.5 Media Issues 13 2.6 Below the Line Marketing 16 2.7 Direct Marketing 17 3 Concluding Statement 18 4 Bibliography 21 Appendix 24 Linear Model (Fig. I) 24 Kelman's Model (Fig. II) 25 Consumer-Product Involvement (Fig III) 26 Communications Effect (Fig IV) 27 Marcom Mix (FigVI) 28 Tactics Used By Excellent Marketers (Fig. VIII) 30 1 Introduction Marketing is an integral component of organisational success, not only because it informs the market of an organization's activities and the range of products and/or services it extends to customers but, because a well-designed marketing campaign, as informed by an accurate and comprehensive understanding of the market in which an organisation operates, plays a fundamental role in persuading the campaign's target group to purchase the advertised goods/services. Marketing, in other words, is that strategy by which an organisation informs its environment of its activities and persuades consumers to purchase those products and/or services. Church (1999) notes that economic historians have, in their study of patterns of demand, consumption and corporate success from the late nineteenth century to the present, unanimously concluded that marketing is the primary determinant of organisational success since marketing, as a strategy and communication program, functions to persuade a market of the utility of a particular product or service, thereby driving up demand. The intimate, and inextricable, connection between organisational success and marketing, insofar as the primary objective of the former is to ensure the latter through the creation and maximization of well-targeted demand, is a historically undeniable reality, amply supported by a wealth of empirical evidence (Church, 1999). The undeniable centrality of marketing communication to organisational success functioned as the basis for the embrace of marketing by academia and the evolution of marketing as an academic field within management sciences (Cohen, 1966). Earlier perceptions of marketing as interchangeable with advertising, with the former being defined simply as a strategy to attract consumer interest in a product, have fundamentally changed. Marketing has, ever since the mid-1960s, been recognized as a complex methodology for the fulfilment of an organization's strategic objectives, insofar as sales, the expansion of market shares, and organisational growth are concerned. As such, and within the context of the aforementioned definition for marketing, the former evolved into a science embracing methodologies for market analysis and study; strategies for the identification of the most susceptible consumer groups/target audience; and countless theories on effective communication strategies and tools for the engendering of consumer interest and product/service demand (Cohen, 1966; Dibb and Simkin, 1994). In other words, the increasing recognition of marketing as the key to organisational success has led to its embrace by academia and its subsequent evolution into a science,' designed to articulate a set of strategies, tools and methodologies as would ensure organisational success through marketing. There is no doubt that recent technological innovations in communication sciences, bordering on the revolutionary, have significantly redefined marketing strategies and media. Marketing has not only expanded beyond the local to embrace the global but marketing media and strategies have undergone revolutionary transformations consequent to the evolution of variant forms of electronic media, from the radio to the internet (Wehner, 2001). Marketing, as a communications strategy designed to inform consumers of the availability of particular products and persuade the market of the utility of these products, has evolved into integrated marketing.' While the evolution of integrating marketing, embracing both offline and online marketing strategies and the exploitation of multiple marketing channels, has significantly complicated the design of communication campaigns, especially as pertains to the formulation of the marketing mix, it has expanded the strategies and media by which an organisation may communicate with, and reach, its identified target audience Wehner, 2001; Kanji and Wallace, 2000). The implication is that the organisation which successfully exploits the variant marketing strategies and media available effectively maximizes its opportunities for success. The point here is that marketing is the key to organisational success and those corporate entities which seek to expand into new markets or to acquire greater market shares, must base their expansion strategies on this understanding (Kanji and Wallace, 2000). This assertion shall now be analyzed and supported through the use of Co-op as the research's case study, especially in light of the stated organization's determination to expand its existing share of the British food retail/supermarket market. 2 Marketing Theory, Principles and Application 2.1 Communications Opportunity Analysis Designing an effective communications campaign ultimately depends on three factors. These are careful study of the macro environment, as in the barriers it poses towards communication and the opportunities it present, perceptions of the product or the form within that environment, and selecting the marketing strategies that would best overcome the obstacles and exploit the opportunities. As argued by W.G. McClelland (2002: 155-156) the greatest responsibility for the success or the failure of firms within competitive sectors, such as the supermarket business, depends upon the extent to which the macro environment has been accurately comprehended, together with careful analysis and study of the factors that promote positive perceptions of a specific chain, as opposed to those that induce negative perceptions. Upon consideration of the above in relation to the design of an integrated marketing communications campaign for Co-op, one may note that it is confronted by three primary obstacles. The first, naturally, is that it operates in a highly competitive sector, growing even more competitive through the expansion of Tesco. The second is that it is perceived as outdated within the context of an environment characterized by high-tech shopping experiences. Thirdly, the Co-op is becoming an ever decreasing supermarket shopping choice, possibly because publicity surrounding Tesco has entrenched the Tesco image in consumer's minds, rather than that of the Co-op. Actually, this point is forwarded by McClelland, who argues that Tesco publicity and marketing campaigns, has, to a large degree, made Tesco interchangeable with the word supermarket, whereby it has increasingly become the first, possibly most immediate and natural choice among shoppers (2002: 168). Hence, it is extremely important that the communications campaign designed for the Co-op address this external environmental factor and further promote a more modern, up-market image of the chain, in addition to focusing upon ethical positioning and generating public interest and concern regarding organic versus genetically modified products. 2.2 Communication and Market Analysis Paradigms The marketing and communications campaign,, as briefly alluded to in the preceding section, has to be informed by the outcomes of a thorough market analysis, whose primary objectives are the articulation of Co-op's current position within the UK supermarket and food retail sector. Within the context of the aforementioned aim, and as emphasised by O'Brian and Meadows (2000), the exigencies of undertaking a SWOT analysis are inarguable. 2.2.1 SWOT As briefly explicated by O'Brian and Meadows (2000), SWOT, an acronym for Strengths, Weaknesses, Opportunities and Threats, is a strategy for the assessment of an organization's micro and macro environments, ultimately aiming towards the articulation of an organization's position within a particular sector, concomitant with an elucidation of the factors which can be utilized to promote its expansion and those which stand as an obstacle towards the stated. Insofar as Co-op is concerned, a SWOT analysis indicates the following: 1. Strengths (S): Co-op's strength lies in its long history of quality service to UK consumers whereby, as stated in its website, it is the country's only surviving convenience store, dating back to the nineteenth century. This is a definite area of strength which should be constructively exploited within the marketing campaign, insofar as a century and half of survival in an increasing competitive environment and market sector implies 150 years of satisfied customers. 2. Weaknesses (W): The primary identifiable weakness lies in consumer perception of Co-op as outdated and outmoded, culminating in an overall impression of the chain as having no place within the contemporary environment of quasi-self-service hi-tech supermarket shopping. 3. Opportunities (O): Despite the stated weakness, Co-op's expansionist plan is aided by a number of important opportunities which, if strategically exploited, can negate the aforementioned weakness. In the first place, and despite negate perceptions surrounding its food retail outlets (outmoded), Co-op has a banking brand that is positively perceived by consumers. While it is true that customers do not currently link the banking brand to the supermarket/convenience store brand, this can be corrected through branding extension leading to some transference of the positive perception of the bank brand to the food brand. In the second place, within the contemporary environment of impersonal and autonomous shopping experience, Co-op humanizes the process insofar as it offers customers a more personalized service. This, in conjunction with branding extension, constitutes a marketing opportunity which needs to be positively exploited within the parameters of the communications campaign 4. Threats (T): The primary threat confronting Co-op lies in Tesco's expansion and the strength of the former's marketing campaign. The aforementioned campaign has effectively made Tesco interchangeable with reasonably priced and high quality shopping within the food retail sector. To overcome this particular threat, it is incumbent upon the marketing campaign to embrace the identified strengths and opportunities and to highlight them as a strategy for the negation of the articulated threat. The above explicated findings function to expose the operative push and pull factors. Quite simply stated, negative consumer perceptions of Co-op as an outmoded convenience store which hardly fulfills the criteria for supermarket,' functions to push consumers away from Co-op. The marketing communication's primary challenge is to offset the push factor's root causes by emphasizing the earlier identified pull factors, thereby maximizing their effect and through the creation of new ones. These pull factors are, in essence, the personalization of the shopping experience, the focus on product quality, and Co-op's long history within the UK food retail sector. In addition to these, an effective marketing campaign can create new pull factors through branding extension, thereby emphasizing reliability and honesty; through the exploitation of contemporary concerns regarding organic versus GM foods via the positioning of Co-op as a wholly organic outlet; and through an emphasis on Co-op's new hi-tech face,' and the fact that technology will be integrated into the personalized service framework, rather than replace it as is the predominant norm. The marketing campaign can, in other words, negate the existent push factors, identified by the SWOT analysis and, not only exploit the currently functional pull factors but create new ones. 2.3 Application of Principles to Practice The communications campaign must be designed to address the identified obstacles within the external environment and overcome negative perceptions of the Co-op as an outmoded supermarket. In order to effectively do so, it is imperative for the campaign to have a solid theoretical or scientific basis, to proceed from an understanding of communication strategies, consumer theories and buyer behaviour. As emphasized by Burke et al., (1990: 213) the greater the extent to which a campaign is based upon theoretical principles and knowledge, the more likely it is to have practical results. The communications theories chosen to foreground the Co-op's communications' campaign have been determined by the specific position and reputation of the Co-op in the British supermarket sector. Thus, Schramm's Linear Model of Communication is integral to the process and purpose insofar as it will effectively communicate an informative product quality vs. value message, eliciting positive response and purchase action among receivers. Proceeding from the above, it is important to note that as value is not realized until the product in question is used, Kelman's model of Source Characteristics is important. With some modifications to the stated theory, a case can be made for pre-existing credibility drawn from approximately a century and half of operation within the British market ("Our History," 2004). Accordingly, the Co-op's historical background and, as it claims on its website, its identity as one of the country's first, and only surviving (from the nineteenth century) supermarket chain, or convenience store, signalling a history of satisfied customers, can be exploited within the framework of the marketing campaign for the specific purpose of establishing a link between convenience, or supermarket shopping and Co-op. In other words, as stated earlier, Tesco is currently consumers' most immediate choice for supermarket shopping. Yet, given the history of its experience and operation within the British market, it is more logical that the Co-op be. Therefore, it is essential that the communications' campaign bring this particular aspect to the forefront and establish an image which combines between modernity and traditional shopping, emphasizing that consumers will both experience the modern shopping model that they have been accustomed to while being indulged with the traditional personal attention, should they require it, that they are denied by other modern supermarket chains. In further compliance with the Kelman Model and following the Linear Model, the content of the message relayed could benefit from addressing health concerns. As stated by Doyle et al. (1986: 30-31), one of the primary reasons for the successful introduction of Japanese firms into numerous markets across the world is that they very efficiently design marketing campaigns that address, exploit and encourage consumer concerns for the purpose of positioning their product as the answer to that concern. Basically, the Co-op is in a very good position to do so. Even though there is a decreasing concerns with the issue of organic foods versus genetically modified or enhanced ones, not to mention confusion regarding the precise meaning of these terms, the concern exists. Within its communications campaign, Co-op should explain the difference between these types, clear up the confusion and market the benefits of organic foods, such as it sells, versus modified products. In other words, it should exploit the stated concern and encourage its growth and development. However, if it is to effectively do so, it is necessary that, as advised by Deighton (1994: 767) campaign claims be backed up by scientific evidence In addition to the above, the campaign needs to be also grounded in consumer behaviour. According to Sheth (1967: 719) a successful communications campaign is usually one that studies consumer behaviour and the means to influence buyer behaviour (1967, 719). Basically, there are three main theories of consumer-behaviour and its impact on the buying decision, all of which focus upon the level of involvement between consumer and product. These may be defined as follows: Product-centred Approach: Consumer involvement with a product emanates from his/her perception of its importance (trivial, unimportant, etc.) Subject-centred Approach: "Consumer differ in terms of involvement-type variables" (Berry 1969). Interest/importance Relevancy as in goal and consequence of use Commitment as in ego (Zaichkowsky, 1985) Response-centred Approach: Involvement with a product emerges as a response to participation in information processing (Lastovicka and Gardner, 1979). Currently, and as one may assume from the fact that consumer's appear to have a negative impression, although not experience, with shopping at a Co-op outlet, assuming that it is outmoded, one may assume that the operative attitude is product-centre869+That means to say, negative assumptions regarding shopping at a Co-op outlet has substantially decreased market share. Hence, it is necessary for the communication campaign to influence a shift towards the response centred approach, providing potential consumers with such information as would encourage them to actively chose to shop at one of the Co-op's outlets. In other words, the communication campaign must aim towards changing reactions towards Co-op outlets from ones based upon perception to ones based upon information. 2.4 Consumer Involvement Co-op may best communicate its message and achieve the objective of persuading customers that their negative perceptions of the outlets are inaccurate by involving selected consumers in the campaign. For example, it is quite possible for the Co-Op to offer some of those respondents who stated that they had not visited an outlet for 6 months and those who said that their perceived of it as outmoded, gift certificates to shop at the outlet closest to them. This will act as an incentive for non-customers to enter an outlet, become involved in the Co-Op shopping experience and then report their impressions. The aim here will be to demonstrate that the outlets are not outmoded and in addition to offering a modern shopping experience, further offer a personal and friendly one which makes customers feel at ease and comfortable. At the very least, when the experience is communicated through the chosen media outlet it will encourage others among the target audience to undertake the experience themselves. Besides that, shopping coupons in leading magazines and dailies may also fulfil the same objective. In other words, the objective here is to draw in members of the target consumer group into the communications campaign as participants and later, advocates, rather than simply as observers. 2.5 Media Issues As emphasized by Greve (1996: 33), electronic media advertising is the most effective method for popularizing a firm or a chain and for promoting products. However, on the downside, electronic media advertisement is quite nearly prohibitively expensive (1996, 33). In some instances, it could run up to millions of pounds and eat up the majority of a company's advertising and public relations' budget (33). While, in consideration of the budget allocated for expansion by the Co-op, one would assume that cost would not be an issue, Doyle et al. (1986: 32) emphasize that it always is whereby the most successful companies often launch the most cost effect, value for money advertisement campaign. One of the most important steps involved in the design of a communications campaign is the identification or section of the most appropriate and effective media channel. Within the parameters of the stated purpose of this particular communications campaign and the selected cluster (middle and lower income groups), one would immediately note the importance of using both print and electronic media, not to mention both radio, television and the internet (as dictated by the integrated marketing paradigm). The campaign will definitely use all of the stated due to direct marketing and creative concept goals. Nevertheless, due to both the characteristics of its target group, budgeting concerns and the nature of the message, the radio and internet emerge as the most suitable media outlets. As argued by Greve, depending upon both the nature and intent of a communication message and the intended receivers, the radio is often a much more suitable choice and, better fit, than the television (1996: 34). There are two reasons for this. First of all, when the message communicated is of a serious nature and the aim is to encourage the receivers or the targeted audience to concentrate on the words and the information communicated by them, it is often best to use the radio. This is because, as explained by Greve, the multimedia environment of the television often distracts the viewer from actually listening to the words and comprehending the message in its entirety, insofar as viewers become distracted by sound, colours and sight (35-36). Hence, considering the serious nature of the Co-Op' primary message, which is that its ethical heritage positions it as the responsible family shopping choice, the radio is much more suited than the television. Moreover, Greve also argues that when deciding between radio or television as the primary form of electronic media for communication of a stated message, it is imperative to identify the habits of the targeted audience and the nature of the product or the form being advertised (1996: 38-39). If the advertising message involves nutrition and the targeted audience tends to be primarily composed of working women and commuters, then the radio is the best media channel for to reasons (1996: 39-40). Firstly, this group tends to listen to the radio both on the way to work and on the way home from work. Not only that, but at these particular times, their sole source of entertainment is the radio and there are little distracting outside interferences. Hence, it is best to communicate messages at these times to that audience, due to the stated reason. Secondly, shopping for food usually takes place on the way home from work. This means that the message will be fresh in the targeted group's mind (40-41). Accordingly, for these stated reasons and in consideration of the product and the audience, it is best that the radio be the primary electronic media instrument for communication of Co-Op's message. Within the framework of the above articulated rationale, the Internet emerges as an equally effective marketing communications channel. According to UK national statistics, 38% of employees aged from 25 to 54 use the internet on a daily basis, whether from the office or the home. In addition, it is fast becoming the primary means by which the stated age group acquires information regarding products and services (Internet Usage,' 2002). The stated immediately clarifies the importance of exploiting the internet as a marketing communications channel, insofar as the stated age group is not only economically independent and, hence, classified as shopping-outlet decision-makers but, the internet will be able to interactively communicate Co-op's message and provide potential consumers with the requisite information regarding products, brands, shopping utility and outlet locations. The placement of strategic banner ads on popular websites such as the UK devoted Yahoo or Hotmail free mail servers will achieve this. Consequently, the integrated marketing campaign must embrace and exploit the internet as a primary marketing communications channel. 2.6 Below the Line Marketing The campaign needs to use marketing tools in such a way that would both promote the utility of shopping at a Co-op outlet while simultaneously focusing on the price variable. Thus, while ensuring that price level factors in cost, demand, competition and perceived value, the Co-op must constantly monitor both the targeted segment's and competitors' reactions to Co-Op product prices in order to attain a competitive balance between the cluster's average budget and market expansion and profit increase targets. Thus, the Co-Op must apply a price-value balance model here and the marketing communication mix should communicate the characteristics of that balance. Therefore, in response to theories stating that buyer decision-making is primarily influenced by perception of desirability measured in subjective terms of pleasure to be derived from purchase and use, promotion and advertisements must focus upon marketing the chain itself in terms of rational utility (Peter and Olsen, 1987; Leighton, 1984). Additionally, the Co-op should promote sales through the automatic entrance of buyers into competitions. Furthermore, the marketing campaign would benefit from infomercials informing the targeted cluster (middle to low income families) that products at these outlets are organic and hence are a reasonably, even low-priced source of nutrition satisfaction and comfort. That message needs to be relayed by a communicated source (reputable professional background). In determining allocation of resource to the marketing tools, or the marketing mix, one would argue that greater weight is given to promotion as the positive motivation of this cluster requires both celebrity endorsement (professional/credible source), communication of health-related information, promotions, and persuasion that utility is greater than price. Following that, substantial weight is given to price as a marketing tool, given the price-conscious attitude of this group, as determined by their limited/fixed income. Location and number of outlets follow and are given equal weight. As such, while the marketing mix is balanced, some tools are more important than others. 2.7 Direct Marketing P. Doyle et. al., emphasize the tremendous value of a well-designed and effective direct marketing campaign, further stressing that the most successful and effective ones are those that rely on creativity and not on set strategies (1986, 30-31). While flyers and door to door informative advertisements do attain results, these results are limited due to two important reasons. In the first place, they have been used so much that the targeted groups hardly react to them. In the second place, they are used by so many marketers that targeted consumers often receive a significant amount of flyers and information sheets promoting a new product or outlet per week that they just throw them all out (31-32). Accordingly, instead of using the traditional methods of direct marketing, more innovative approaches should be used. For instance, members of the target group should be drawn into the marketing process through contests, coupons, surprise shopping sprees, and even be recruited as tasters for the evaluation of Co-Op products. In other words, the objective approach to direct marketing, which is the mot commonly used one according to Doyle et. al., needs to be disregarded in favour of a more subjective approach which puts randomly selected members of the targeted cluster at the centre of the direct marketing campaign as participants. This particular strategy for direct marketing should be composed of several innovative and creative ideas and scenarios, such as those stated in the above. The ultimate purpose, of course, is to change perceptions about Co-Op outlets through exciting the target group into trying out these outlets and possibly gaining a few seconds or minutes of media fame, free prizes, food and surprises. In other words, through this method of direct marketing, target groups will become familiar with and excited by the Co-Op experience. Direct marketing strategies need to be incorporated within the paradigm of integrated marketing. Consequently, in conjunction with the aforementioned offline contests and snail mail distributed coupons, e-mail coupons can be distributed and contests can be held through the corporate website. The former, in particular, will encourage consumers to visit the C-op website, supposedly for contest participation but, in so doing, will be informed of the corporation's new hi-tech' structure and the fact that, not only is it expanding its outlets but is embracing the supermarket, as opposed to convenience store, paradigm while still maintaining the personalisation of shopping experience' philosophy. 3 Concluding Statement Working on this assignment helped me make the connection between marketing theory, practice and application, further solidifying my understanding of the extent to which organisational success is ultimately dependant upon the design of an effective, and relevant, marketing communication programme. The aforementioned task, again as emphasized to me throughout the research and writing of this study, is hardly an easy one because the formulation of an effective marketing strategy is fundamentally founded upon thorough market, consumer and product/service research. The marketing professional, therefore, must not only be proficient in the communication of persuasive marketing and product/service promotional messages but must be cognizant of the multiple marketing research strategies, tools and methodologies available. Knowledge of the stated is prerequisite to the formulation of a product/service specific marketing campaign and is intended to guide the marketer towards the identification of his/her consumer base, potential, or alternate, consumer base, and the positioning of the product/service within its market. Writing this report led me to the realisation of the complex and multifaceted nature of marketing. Having previously assumed that the most important characteristic of the effective marketer was an understanding of the consumer market and the socio-psychological content of marketing messages, the report effectively established this as a fallacious assumption. Certainly, effective marketing is fundamentally and inextricably dependant upon the stated but it is equally dependant upon a thorough understanding of the organisation's strategic objectives, the status of a particular product within the context of organisational objectives' attainment, and the status and position of the organization itself within the larger environment in which it operates. Marketing, in other words, is a highly complex process whose success cannot be separated from the understanding and consideration of external and internal stakeholder interests and the intra- and extra-organisational frameworks. Even though the report represents my best efforts, the fact is that it contains a serious shortcoming which, had I more time and a second chance, I would definitely correct. Specifically stated, the report is entirely informed by secondary data, despite the importance of primary data. It is a desk-based, literature-dependant report even though primary data, which could have been collected through direct observation of the operations of a local Co-op and interviews with Co-op customers, would have been inarguably valuable and would have significantly strengthened the presented analysis. Time-constraints, however, prevented me from doing so. 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Appendix Linear Model (Fig. I) Co-Op Advert Message Characteristics of Retail Outlet (Co-Op) as would function as pull factors Interpretation and positive receipt of message Consumer targeted cluster responds through purchase of product Kelman's Model (Fig. II) Source Credibility Internalization Source Attractiveness Identification Source Characteristics Source Power Compliance Consumer-Product Involvement (Fig III) http://www.bigpictureonline.com/bp/channel.asplite=tu&pn=pd Communications Effect (Fig IV) Marcom Mix (FigVI) Price-Value Balance Model (Fig VII) Tactics Used By Excellent Marketers (Fig. VIII) From Dibb and Simkin Read More