Core Marketing Concepts and Different Elements of Marketing Process - Essay Example

Marketing Principles Table of Contents Task 3 a.)Core Marketing Concepts and Different Elements of Marketing Process of IKEA 3 b.)Benefits And Costs Of Marketing Orientation For IKEA 6 Task 2 7 a.)Influence of Macro and Micro Environmental Factors on Marketing Decisions 7 b.i.) Segmentation of Consumer Markets 10 b.ii.) Segmentation of Organisational Markets 11 c.)Effect of Buyer Behaviour on the Marketing of Two Products of IKEA 12 d.)Influence of Product Positioning on the Marketing Mix Factors 13 Task 3 15 Usage of Marketing Mix Elements by IKEA 15 Task 4 18 a.)Variation of Marketing Mix to Different Market Segments 18 b.)Difference between Consumer Markets and Organisational Markets Concerning Marketing Activities 19 c.)Factors That Differentiate International Marketing from Domestic Marketing 20 References 22 Task 1 a.) Core Marketing Concepts and Different Elements of Marketing Process of IKEA IKEA is regarded as a privately owned retail company that was founded in the year 1943. It is worth mentioning in this context that the company offers a broad assortment of attractive as well as well-designed furnishing products to its valuable customers with affordable prices. It is fundamentally inspired by the vision of the company to generate a better life of the individuals or the customers by delivering unique and inclusive furnishing products at reasonable prices (Inter IKEA Systems B.V., 2012). Furthermore, when determining the core marketing concepts of IKEA, it has been apparently observed that the company has been fundamentally implementing the core marketing concepts of market driving and strong supplier base relationship approaches. From the perspective of market driving approach, the company focuses upon altering the existing circumstances of its overall business environment in several ways. Commonly, the ways include developing the exclusive internal business procedures, effectively shaping the structure of the target market creating strong influences on the industry structure and most importantly, offering products and/or services to the customers with innovative value propositions. For instance, with regard to strong supplier base relationship approach, the company was able to successfully identify the requirements of forming as well as maintaining strong interrelation with its different suppliers with the purpose of competing with the chief business market players and subsequently increasing the customer base in its targeted market (Tarnovskaya & et. al., n.d.). The different elements of marketing process of IKEA have been identified as offering inclusive product ranges along with attaining competitive pricing benefits through the effective utilisation of its valuable resources. In relation to analyse one of the imperative constituents of marketing procedure of IKEA, it can be observed that the company largely focuses upon producing better design and quality products at low prices. With regard to the effective utilisation of the available resources as another imperative element of its marketing process, IKEA emphasises upon maximising its required raw materials to satisfy the needs as well as the preferences of the customers by a greater extent (Inter IKEA Systems B.V., 2012). It is worth mentioning in this context that the company has earned a significant amount of revenue as well as attained huge business growth due to its effectual adoption as well as implementation of core marketing concepts along with the effective utilisation of the different components of marketing process. This can better be understood with the help of the following pictorial representation of the income growth of IKEA for the year 2010 and 2011 as depicted hereunder. Fig.1. Source: (Inter IKEA Systems B.V., 2011) b.) Benefits And Costs Of Marketing Orientation For IKEA The perception of marketing orientation is fundamentally described as the cornerstone in the area of marketing management that supports an organisation to react in accordance with the requirements as well as the preferences of its customers. The significant facet of marketing orientation states that the organisations need to adopt decisions on the basis of the valuable information concerning customers’ requirements and wants. It has further been viewed in this regard that most of the organisations adopted marketing orientation approach with the intention of attaining a leadership position in its future performances (Singh, 2004). In this similar context, the vision of IKEA has been recognised to be inclined towards designing its different product ranges in accordance with the preferences as well as the requirements of the customers and most importantly delivering the products at reasonable prices to them. By taking into concern this particular objective of IKEA, it can be affirmed that the benefits of marketing orientation approach for the company in particular involve increased productivity, enhanced business reputation, market share growth and profitability. On the other hand, the costs of marketing orientation for IKEA may engage initial costs relating to product development and inventory costs among others (Inter IKEA Systems B.V., 2012). Task 2 a.) Influence of Macro and Micro Environmental Factors on Marketing Decisions The macro as well as micro-environmental factors deeply influences the marketing decisions adopted by different organisations. These factors further tend to support a particular organisation to comprehend the elements persisting in the marketing environment where it operates. The different constituents of micro environment comprise the company’s business operations, its suppliers and its competitors among others. In this regard, the top level management tend to strongly influence the marketing decisions of IKEA as they are responsible for setting the organisational objectives, defining the organizational mission and its strategies. The suppliers can also deeply influence the marketing decisions of IKEA as they deliver valuable resources when required by the company. Additionally, the competitors also create significant influences on the marketing decisions of IKEA by generating threats of alternative products increasing the requirement of innovation and advancements (Scribd Inc, 2013). Fig. 2: Micro-Environmental Factors Apart from these micro-environmental factors, the elements of macro-environment such as economic, technological and political factors among others can also be observed to influence or manipulate the marketing decisions of IKEA by a significant extent. In this regard, the economic environment can persuade the marketing decisions of IKEA by affecting the purchasing as well as the spending power of its target customers. Moreover, the political environment can influence the marketing decisions of IKEA by limiting the business policies or plans of the company with the formation as well as the alteration of the governmental norms. Finally, the technological environment can significantly influence the marketing decisions of IKEA by generating new business markets along with opportunities (Scribd Inc, 2013). In this way, both micro-environmental along with macro-environmental factors can influence the marketing decisions of IKEA by a considerable extent. Fig. 3: Macro-Environmental Factors b.i.) Segmentation of Consumer Markets ‘Consumer markets’ are referred to those markets in which different customers tend to purchase a diverse range of products, particularly for their personal consumption. Contextually, it has been apparently observed that the nature of consumer markets is quite composite in comparison with other business markets such as ‘organisational markets’. The target market for IKEA could be the young family members who desire to purchase stylish furniture at a reasonable price. It is worth mentioning in this context that the company could target the women whose age group fall between the ranges of 18 years to 50 years, especially for one of its products i.e. cooking accessories. Correspondingly, in order to segment the consumer markets, IKEA would require developing a dissimilar set of marketing mix strategies for each customer section. This is owing to the reason that by advancing a diverse marketing mix for each customer section, the company will be able to identify the nature as well as the preferences possessed by its customers (Drummond & et. al., 2012). b.ii.) Segmentation of Organisational Markets Organisational markets represent those market segments in which the individuals or companies intend to buy their respective products for business uses rather than for private consumption. In such market structures, it has been observed that even though the number of buyers in this segment is quite limited, they tend to purchase requisite products in greater amounts in comparison with the consumer market segment. Concerning the target market of the young families as well as the women, IKEA can segment its organisational markets by emphasising upon the critical aspect of ‘market segment leadership’. This is fundamentally based on the reason that the facet of market segment leadership would eventually support the company to obtain superior access towards diverse distribution channels. It can also prove beneficial in enhancing its profitability along with the productivity and most importantly, in identifying economies of scale, in its production as well as marketing segments (Drummond & et. al., 2012). c.) Effect of Buyer Behaviour on the Marketing of Two Products of IKEA The aspect of buyer behaviour is generally viewed as a decision-making procedure in which the people or individuals are engaged in purchasing as well as selling of products for personal uses. In this context, it has been identified that the buying behaviour or the behavioural patterns deciphered by the customers play an imperative role in the marketing of diverse products belonging to different organisations. Similarly, it can be stated that the buying behaviour of the targeted consumers can impose considerable impact upon the marketing prospects of the two selected products of IKEA, i.e. cooking accessories and dining sets in terms of decision-making and business market segmentation. In relation to business market segmentation, the behaviour of the buyers can affect the marketing of the two selected products of IKEA restricting the appropriate identification of the preferences as well as the requirements of the customers regarding the products. Moreover, the recognition of the distinct customer groups who prefer or need altering products or services can also get affected by the customers’ buying behaviour on the marketing prospects of the two selected products of IKEA. From the perspective of the decision-making procedure, the behavioural patterns of the customers can affect the effective comprehension of the circumstances which can further limit organizational efficiency to satisfy customer needs and preferences adequately (Mennen, 2011). Thus, it can be stated that the buyer behaviour can affect the marketing prospects of two products of IKEA in terms of business market segmentation along with decision-making procedure by a considerable extent. d.) Influence of Product Positioning on the Marketing Mix Factors The aspect of product positioning is fundamentally described as a marketing perception that portrays the necessary activities which a business must perform in order to market its products and/or services to the targeted customers. In the current day scenario, it has often been observed that with regards to the company objectives in relation to product positioning, the marketing department of a particular organisation intends to generate an image for its various products taking into account the execution of different marketing mix factors (Iman, 2002). Thus, it can be stated that product positioning can largely influence the different factors relating to marketing mix. In this similar context, the positioning of one of the products of IKEA, i.e. cooking accessories would also influence the company’s marketing mix strategies by a greater extent. In relation to the promotion strategies, the positioning of cooking accessories of IKEA would influence in satisfying the requirements of the target audiences i.e. the women populaces as well as the young family members in order to make them aware about the availability of the product. With regard to the place related strategies, the positioning of the product would influence in transporting as well as storing of goods in order to make those easily accessible to the potential customers. In terms of pricing strategies, the positioning of the product i.e. cooking accessories would influence in supporting the company to attain significant sales revenue. Finally, with regard to product, the positioning of the company will influence in determining the attributes of the commodity that would be delivered to the ultimate customers with the intention of attaining superior competitive position over the chief market competitors (Business Case Studies LLP, 2013). Task 3 Usage of Marketing Mix Elements by IKEA Product Development: IKEA develops its broad assortment of products by emphasising upon certain vital factors. The factors encompass competitive pricing along with quality as well as environment, function and design. It has been noted that the company inspects the product ideas in relation to better exploitation of manufacturing opportunities, raw materials and other valuable resources. In order to minimise the costs and attain the determined marketing objectives, the company markets its various products with uncomplicated and eco-friendly materials instead of packaging the products in a fancy manner (Inter IKEA Systems B.V., 2012). Pricing: IKEA intends to preserve the deliverance of superior quality products to its customers by keeping the cost of the products marginally competitive. The company strongly believes that it can maintain its brand image and most significantly can accomplish its desired marketing objectives by offering low-cost products to the customers through competitive pricing strategies. Moreover, apart from delivering low-cost products, the company also provides attractive credit terms as well as payment options for its customers (Scribd Inc, 2012). Promotion: Apart from promoting the different products through newspapers, televisions and other promotional methods, IKEA concentrates upon paying much more attention towards ethical as well as environmental issues. In this similar context, it has been apparently observed that the company cooperates with various Non-Governmental Organisations (NGOs) including The United Nations Children’s Fund (UNICEF) in order to build an encouraging corporate image and better public relations (Scribd Inc, 2012). Distribution: For IKEA, it can be affirmed that distribution plays a significant role in keeping the prices of its broad array of products quite low. In this regard, it has been viewed that the different products of the company are manufactured by a number of suppliers with effective quality assurance and transported to numerous stores of IKEA across the globe. The chief facets of the distribution system of IKEA include minimum product costs, huge quantities and worldwide network of distribution (Scribd Inc, 2012). People: One of the fundamental objectives of IKEA is to provide a better life to every individual in the community by delivering quality products with the benefits of competitive pricing. The company further aims at establishing as well as sustaining effective long-term interrelation with the suppliers and other involved stakeholders in order to manufacture the products in accordance with the requirements and the preferences of the customers (Inter IKEA Systems B.V., 2012). Process: The business process of IKEA focuses upon manufacturing superior quality of products with due concern towards imposing lesser environmental impacts. The company designed its entire business process in such a way so that it can attain its predetermined business targets without creating harmful effects upon the environment as well as the society. Additionally, IKEA can be observed to prioritise the significance of centralised strategic direction in order to expand its business in the overseas markets (Scribd Inc, 2012). Physical Evidences: In relation to analyse the physical evidences of IKEA, it has been observed that the company considers different important factors that encompass quality, safety and environmental impacts in order to attain its desired business goals. The company also aims at eradicating the use of chemicals and other substances that can be detrimental to the people along with the environment. With this concern, IKEA employs the concept of “e-wheel” in order to comprehend and assess the impact of environment on the different products that are delivered to the customers and vice-versa (Inter IKEA Systems B.V., 2012). Task 4 a.) Variation of Marketing Mix to Different Market Segments The marketing mix strategies concerning the two products of IKEA i.e. cooking accessories and dining sets would vary in two different market segments such as demographic and psychographic. The various factors of marketing mix that comprise place, promotion, product and price would certainly change the marketing procedure of the chosen two products of the company within the aforementioned market segments. From the perspective of the demographic factors, it can be affirmed that the different factors of marketing mix would vary in terms of income, occupation, religion and the age of the targeted customers among others. With regard to psychographic market segment, the factors of marketing mix would vary in terms of personality, social values and lifestyle of the customers by a large extent (Lamb & et. al., 2011). b.) Difference between Consumer Markets and Organisational Markets Concerning Marketing Activities One of the foremost dissimilarities between an organisational and a consumer market segments concerning the marketing activities of a particular company can be identified in relation to the purchase behaviour deciphered by the customers. In this similar context, the customers of the organisational markets buy the products, i.e. the raw materials and capital equipments among others for the purpose to further use those in their production processes. On the other hand, the customers of the consumer markets buy products for their personal consumption. The other dissimilarity between consumer and organisational markets with regard to marketing activities is that the customers of the consumer markets are more price sensitive as compared to the organisational consumers. This is owing to the reason that there exists huge number of final customers in comparison with organisational consumers where only limited numbers of buyers are identified (Mavondo & Farrell, 2000). c.) Factors That Differentiate International Marketing from Domestic Marketing There exist several imperative aspects that broadly differentiate international marketing from the characteristics of domestic marketing. In this regard, the different aspects related to international marketing encompass social, cultural, legal and financial factors. In relation to social factors, it can be stated that the growth as well as the movement of the populations throughout the globe eventually differentiates international marketing form domestic marketing in terms of communication, demand services and transportation advancements among others. Furthermore, the cultural differences, specifically in the form of languages, impose considerable impact upon marketing the products internationally or domestically. Apart from the cultural differences in languages, the diversification in religions and ethnic origins among others also contribute in differentiating international marketing form domestic marketing characteristics at large. With regard to legal factors, the laws as well as the regulations and any other lawful framework also distinguishes international marketing from domestic marketing in terms of various marketing aspects such as advertising. From the standpoint of economic factors, the changing financial conditions, economic policies and the levels of financial advancements as well as changes related with Gross National Income (GNC) per capita also act as chief contributory facets that differentiate international marketing from domestic marketing (Doole and Lowe, 2008). References Business Case Studies LLP, 2013. 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