Re-Defining Markets - Coursework Example

PROPOSAL (Synopsis to be read with the proposal on Re-Defining Markets). TERM PAPER PROPOSAL FORM: MARK1051CONTEMPORARY ISSUES IN MARKETING Draft no. Student Tutors signature [for final draft] Complete this form with your initial ideas when it is first handed to you – don’t wait for your ideas to be ‘polished’. You can use as many copies as you like (you can access them via webct ) and use them to explore your ideas as your thoughts and the course evolves. You can send them to your tutor and discuss/debate your ideas on webct or in class before you reach your final draft. Please keep a record of your ideas (by draft number) so you can track your thoughts and progress. When you feel you have a final idea, then you can ask a tutor to sign it off as suitable. This doesn’t, of course, guarantee a good grade, but at least you should have some feedback on your ideas. Best of luck! Proposed title/focus of the essay make it interesting! Does the New Definition Encompass Marketing In The 21st Century? Outline structure for your paper brief content headings which show (roughly) how your paper covers the subject(s) Introduction Marketing Concepts Customer Satisfaction The Current Scene Branding Celebrity Endorsements Conclusions What relevant theories/models/ideas will you include in your essay? Customer Satisfaction Competitive Advantage Porter’s Five Forces Marketing Mix Socio-Economic Influence in Purchase Decisions Customer Retention Customer Life Cycle Value Branding Brand Equity Celebrity Endorsements What are the key journal articles that will you will use in your essay? please list using full Harvard system of referencing so they can be checked Hwang, H, Jung, T., Suh, E. (2004), “An LTV model and customer segmentation based on customer value: a case study on the wireless telecommunications industry”, Expert Systems with Applications, 26, pp 181-188 Jackson. D.R. (1994), “Strategic applications of customer lifetime value in the direct marketing environment”, Journal of Targeting Measurement and analysis for marketing, 3(1) pp 9-17 Keller, Kevin L. (1998), Strategic Brand Management. Upper Saddle River, NJ: Prentice Hall. Keller, Kevin L. (2002), Branding and Brand Equity. Cambridge, MA: Marketing Science Institute. Kotler, P., Armstrong, G,. Principles of Marketing, Prentice Hall & Pearson Education. Levitt, Thedore., (1960), Marketing Myopia, Harvard Business Review, July/August pp 45-56 McCarthy, E.J., (1964), Basic Marketing, Richard D. Irwin Homewood. Porter, M.E,. (1980), Competitive Advantage, The Free Press, New York. Porter, M. E., (1985), Competitive Advantage, The Free Press, New York. Porter, M.E., (1996). What is Strategy, Harvard Business Review, Solomon, Michael R. (2002), Consumer Behavior: Buying, Having, and Being, 5thed., New Jersey: Prentice Hall. Webster, Frederick E., (1992), The Changing Role of Marketing in the Corporation, Journal of Marketing, Vol-56, October, pp 1-17. How do you think your essay fits into the wider context of marketing theory? How does your essay reflect the learning outcomes of the course? Marketing is the oldest concept in exchange transactions beginning with barters to the modern model of selling online. Only the methods and approach has differed influenced by changing environment and expanding knowledge base. The attempt therefore is to find the most suitable model for optimum results. This proposal will endeavour to look afresh at how marketing should be re-defined in the current context. Introduction Marketing is the oldest concept in exchange transactions beginning with barters to the modern model of selling online. Only the methods and approach has differed influenced by changing environment and expanding knowledge base. The attempt therefore is to find the most suitable model for optimum results. This proposal will endeavour to look afresh at how marketing should be re-defined in the current context. For this purpose a literature review will be followed by an analysis. Marketing Concepts It has been widely understood that the test of successful marketing is customer satisfaction. Organisations that can increase the satisfaction level of their customers can expect profitability in the longer run (Felton 1959; Houston 1986; Webster 1988). Porter has perceived competitive advantage (1980, 1985, 1996) to be the crux of the modern business era and has suggested various strategies for companies to embrace these situations. Porter divides the competitive environment into five forces of ‘powers’, as Power of buyers, Power of suppliers, Threat of new entrants, Threat of substitutes and Intensity of rivalry between existing firms. The last three decades of the twentieth century saw the popularity of marketing mix to be the focal point of gaining this competitive advantage. Theories of the 4P concept resulted in different marketing mixes that were put forward by Kotler P,. (1986); Mindak and Fine (1981); Nickels and Jonson (1976) and Booms and Bitner (1981) gained the most acceptability and popularity in marketing literature. Customer Satisfaction A variety of measures are in vogue to promote sales to customers. This is a complex task as there are various motivations that guide the consumer and the extent of their effect is not easy to fathom. There is need to understand the socio-economic influence on the consumer to arrive at results (Kitchen 1990). There are several variables in customer relationships. They have been explained as antecedents of customer satisfaction, customer loyalty, customer profitability, and a host of other concepts and variables. Customer satisfaction however remains the main concept and concern and has been the foundation of all marketing efforts (Drucker 1954; Levitt 1960; Ames 1970; Gronroos 1989). All marketing should therefore be aimed at satisfying customers as this will emerge in customer satisfaction and will ensure retention of customers. Ahmed and Buttle (2002) are of the opinion that it is the key objective of managements to retain customers as it is far cheaper to retain an existing customer over the cost of persuading a new customer. This being seen as relationship marketing and part of satisfying customer is offering goods before and after sales service. The Current Scene Today the marketing strategists are progressively more worried about increasing their customers in the face of stiff competition. Their rivals in the market offer many similarities in the goods and services and it is often impossible to retain customers. Customer loyalty is no longer guaranteed as companies adopt several marketing ploys to snatch customers from each other, especially in matured and saturated markets. Customer Retention (CR) has been defined as the continuation of the business relationship created between a supplier and a customer (Gerpott et al, 2001) and finally this has become the most important feature of marketing. It has been suggested after research that if 5% of existing customers are retained the net present value of customers increases between 25-85%, (Ahmad and Buttle, 2001). A new term of having a Customer Life-Cycle Value was coined by Grönroos, (1982) and was alternatively described as Time Life Value by Jackson, (1994) and Hwang et al, (2004). Customers should be evaluated by their potential spending power rather than maximizing on one single transaction entered into with them (Andersen, 2001). When value is determined in this manner it will encourage companies to give (CR) a prominent place in their marketing plans. Branding Building a brand, whether of products or the organisation itself has become an important feature in the effort to attract customers. Brand equity is big on the agenda and companies are known to spend millions to build their image. The beauty of the brand is immediate recall and high calibre and high performance companies often enjoy a larger valuation of their brand than the value of their entire stockholding. In accounting terms the value of brand equity is based on the incremental discounted cash flow that accrues out of the sale of products or services; the cause of which is that the brand is directly associated with the product or service (Keller 1998). Brand management has become a core activity pursued by managers who now understand how brand equity affects buyer behaviour and its influence on corporate valuation (Aaker 1991; Keller 1998, 2002). The brand has now became vital for customer recall and attention was focused on the organisation as brand equity in place of products ( Aaker and Jacobson, 1994). Celebrity Endorsements Once it has been understood and established that Brands attract people the next logical step is to initiate brand building exercises. People are naturally attracted to celebrities and for this reason companies use them as brand ambassadors. It has been estimated by Millward Brown Survey (2006) almost 25% of advertisements use celebrities in all kinds of media particularly print and TV. They are dynamic and likeable persons with qualities appreciated by people and have a certain reputation to which people are attracted and that increases their endorsement value (Atkin and Block 1995). Celebrity endorsements increase the awareness of the products they appear for and create a positive feeling for it (Solomon 2002). The lifestyle of the celebrity is glamorous and attractive to the consumer, so his association with a product glamorises it and makes it desirable. Conclusions Companies formulate strategies for competitive advantage. The objective is to attract customers towards their products or service. This is achieved through a transaction between them and the customer. A satisfied customer is the best brand ambassador of a company and its products. It stands to reason that he should be encouraged to come back for more. Customer Retention is therefore more important today and this should be achievable through Branding and Celebrity endorsements. Bibliography Aaker, D.A. (1991), Managing Brand Equity, The Free Press, New York, NY Aaker, David., and Robert Jacobson (1994), “The Financial Information Content of Perceived Quality,” Journal of Marketing Research, 31 May, 191–201. Ahmad, R., Buttle, F. (2001), “Retaining business customers through adaptation and bonding: a case study of HDoX”, Journal of Business and Industrial Marketing, Vol 16, No 7, pp. 553-573 Ahmad, R, Buttle, F., (2002), “Customer retention management: a reflection of theory and practice”, Marketing Planning & Intelligence, vol. 20/3, pp. 149-161. Ames, B. Charles., (1970), Trappings vs Substance in Industrial Marketing, Harvard Business Review, July/August, pp93-102 Andersen, P.H. (2001), “A foot in the door: Relationship Marketing Efforts Towards Transaction Oriented Customers”, Journal of Market-Focused Management, 5, PP 01-108 Atkin, Charles and Martin Block,. (1983)Effectiveness of Celebrity Endorsers. Journal ofAdvertising Research 23, 1 (February/March) 57-62. Booms, B.H. and Bitner, M.J. (1981), “Marketing strategies and organization structures for service firms”, in Donnelly, J.H. and George, W.R. (Eds), Marketing of Services, American Marketing Association, Chicago, IL, pp. 47-51 Drucker, Peter, F., (1954), The Practice of Management, Harper & Row, New York. Felton, Arthur, P., (1959), Making the Marketing Concept Work, Harvard Business Review, Vol-37, (Jul-Aug) pp 55-65 Gerpott, T., Rams, W.; Schindler, A, (2001) “Customer Retention, loyalty, and satisfaction in the German mobile cellular telecommunications market” Grönroos, C. (1982) ‘An Applied Service Marketing Theory’, European Journal ofMarketing 16(7):30-41. Grönroos, C (1994), “From Marketing Mix to Relationship Marketing: Towards a Paradigm Shift in Marketing”, Management Decision, Vol 32 No 2,1994, pp. 4-20 Houston, Franklin, S., (1986), The Marketing Concept: What It Is and What It Is Not, Journal of Marketing, Vol-50, (April) pp 81-87 Hwang, H, Jung, T., Suh, E. (2004), “An LTV model and customer segmentation based on customer value: a case study on the wireless telecommunications industry”, Expert Systems with Applications, 26, pp 181-188 Jackson. D.R. (1994), “Strategic applications of customer lifetime value in the direct marketing environment”, Journal of Targeting Measurement and analysis for marketing, 3(1) pp 9-17 Keller, Kevin L. (1998), Strategic Brand Management. Upper Saddle River, NJ: Prentice Hall. Keller, Kevin L. (2002), Branding and Brand Equity. Cambridge, MA: Marketing Science Institute. Kitchen, P.J. (1999) Marketing Communications: Principles and Practice, Thomson Learning Kotler, P., Armstrong, G,. Principles of Marketing, Prentice Hall & Pearson Education. Levitt, Thedore., (1960), Marketing Myopia, Harvard Business Review, July/August pp 45-56 McCarthy, E.J., (1964), Basic Marketing, Richard D. Irwin Homewood. Millward Brown (2006), Top 100 Brands, available at: http://www.millwardbrown.com/Sites/Optimor/Media/Pdfs/en/BrandZ/BrandZ-2006-Top100Brands.pdf Mindak, W.A. and Fine, S. (1981), “A fifth ‘P’: public relations”, in Donnely, J.H. and George, W.R. (Eds), Marketing of Services, American Marketing Association, Chicago, IL,pp. 71-3. Nickels, W.G. and Jolson M.A. (1976), “Packaging – the fifth P in the marketing mix, Advanced Management Journal, Winter,pp. 13-21 Porter, M.E,. (1980), Competitive Advantage, The Free Press, New York. Porter, M. E., (1985), Competitive Advantage, The Free Press, New York. Porter, M.E., (1996). What is Strategy, Harvard Business Review, Solomon, Michael R. (2002), Consumer Behavior: Buying, Having, and Being, 5thed., New Jersey: Prentice Hall. Webster, Frederick E., (1992), The Changing Role of Marketing in the Corporation, Journal of Marketing, Vol-56, October, pp 1-17. Read More