Principles of Marketing - Essay Example

? PRINCIPLES OF MARKETING of the Please write here of the module: Please write here of the Please writeinstructor’s name here Date of submission: Please write date here Table of Contents Contents Page 1. What is Marketing 1 2. The Strategic Imperative - A Future Focus 1 3. "PEST" Analysis and Scenario Marketing 3 4. Foundations of Customer Behavior 4 5. Customer Relationship Management 5 6. Competitor Analysis 6 7. Core Marketing Strategy 7 References 9 Principles of Marketing 1. What is Marketing Before going to discuss the futuristic approach towards strategic marketing, let us get a better understanding of what marketing actually is. Marketing means to promote a product or to make the people aware of the products of the company. Companies launch marketing campaigns for creating awareness among the public about the newly manufactured products. A marketing campaign not only includes defining marketing goals of a company but also includes development of marketing strategies to achieve those goals. Role of marketing in the promotion of new brands can never be denied. Marketing not only helps the companies achieve higher levels of profits but also helps them establish their brands in any international market. Marketing plays a vital role in making any new product or brand popular and successful. According to Perez (2010), creation of an effective marketing plan is extremely important for a company because it helps the company create the entire business plan for carrying out the business activities. It is due to effective marketing plans that most of the new products get recognized all over the world in a very short span of time. 2. The Strategic Imperative - A Future Focus Masters (2011) states, “Strategic marketing is a consumer-based approach to product promotion that identifies market segments and attempts to make them more profitable by providing superior value”. Strategic marketing includes such plans and directions, which companies use to create effective plans that not only satisfy the consumers’ needs and demands but also help the companies increase productivity and profitability. Weerawardena (2003) states, “Marketing capabilities influence both the innovation intensity and sustained competitive advantage of the firm”. According to Cooper (2000), strategic marketing improves productivity of a company. Productivity of a company depends on some critical factors, such as, customer satisfaction and employee retention. Let us take example of hospitality industry. If the customers will be satisfied from the food and beverages provided to them by any specific restaurant, they will work as a source to attract more people towards the restaurant, which will ultimately help the company achieve competitive advantage in the industry. Tatum (2011) states, “A strategic marketing plan is an approach to structuring marketing efforts in a manner that identifies and meets consumer demand”. In future, the objective of developing an appropriate strategic marketing plan will only be achieved when all departments of the companies will work in proper collaboration with each other. They will not only need to work together to create a marketing plan by researching customer attitudes and designing metrics to measure performance but also they will have to help the authorities in the implementation of those plans effectively. Some of the main factors which marketers consider while developing strategic marketing plans include needs and demands of the customers, ways in which a customer’s needs can be met, potential market segments, and changing trends in the customers’ taste. Marketing professionals develop the strategic marketing plans in three stages. In the first stage, they segment the market according to the geographic, demographic, psychographic, and behavioral aspects. In the next step, managers develop profiles of the market segments by considering the revenue potential, profitability potential, and market share potential of the company. In the last step, managers develop a market segment based marketing strategy. In this step, they test all aspects of the plan after determining whether they have to do targeted marketing or mass marketing. In future, strategic marketing professionals will need to look at the things from customers’ perspective in order to take the decisions accordingly. One of the main focal point regarding strategic marketing plan development is identification of the changing trends. Marketing managers should be able to identify the changing trends regarding any specific product or service. The managers belonging to any industry should implement such strategies, which should be able to accommodate future trends related to the products and services in the marketing strategies. 3. "PEST" Analysis and Scenario Marketing While discussing strategic marketing, let us also discuss one of the main tools of market analysis. PEST analysis helps business managers understand overall condition of the market. It helps managers know whether there is a growth in the market or it is facing decline. Moreover, it also assists managers understand the actual business position along with directions and potential of business operations. Companies use PEST analysis for various purposes, such as, marketing planning, business and strategic planning, and development of new products. PEST analysis also ensures whether the performance of a company is aligned properly with the powerful forces of change or it needs some improvement. PEST is a very helpful market analysis tool for the companies which want to develop new products and go global to expand the businesses. Scenario marketing is another key aspect of marketing. When managers want to market a product, they need to assess all aspects of the market along with the needs and demands of the potential customers. Analysis of the market helps managers in making suitable marketing decisions which should prove to be profitable for the company. Scenario marketing is a customer-oriented approach towards development of a marketing plan which helps a company in predicting and executing a pre-determined plan for the buyers. 4. Foundations of Customer Behavior While talking about strategic marketing, let us get an overview of customer behavior because it plays a major role in making a product or a service successful. Tatum (n.d.) states, “Consumer behavior consists of the actions that consumers take in regard to making decisions about purchasing various goods and services”. Study of consumer behaviors and buying factors hold great importance in the developmental stages of a marketing plan. Managers need to study those factors which motivate people to buy a product. Self-image of the customers and social status are those factors which make customers buy such products which should be able to make them feel good about themselves. There are some people who are somewhat less concerned with the viewpoints of others and like to buy such products which should be able to provide them with comfort and quality. Some other factors, which considerable roles in the consumers’ buying process, include cultural factors, social factor, and education. Study of all these factors can play a significant role in deciding which products should be created and which features should be added in the products to make them attractive for the customers and productive for the companies. Customer behavior plays an important role in determining the ratings of a company. If a large number of customers decide to buy a product from a company, it means that the company holds good reputation among the public. Good reputation is of extreme importance for a company because it plays an effective role in the customers’ buying process. Good reputation along with many other factors, such as, low price, good quality, and discount schemes, play their roles in making the customers buy their desired products from any specific company. goals. 5. Customer Relationship Management Customer relationship management, or known as relationship marketing, is concerned with the methods and policies that a company uses to provide customer care to its customers. Ryals and Payne (2001) state, “Relationship marketing is concerned with how organizations manage and improve their relationships with customers for long-term profitability”. Customers are the key to success for a company. Every company needs to have a large number of customers to experience its products and services. Customer care department of every company holds different kinds of training programs and educational seminars to make their employees trained in providing effective customer care to the customers. The core concern of customer relationship management is to develop excellent relations with the customers in order to retain them for a long time. To do this, companies remain in contact with their customers using many ways, such as, contacting them through telephones, emails, and on site visits. If a company is successful in retaining its customers by providing them with quality products and services and excellent customer care after the customers buy the products or utilize the services, it brings success to the company in the form of competitive advantage in any specific market. Therefore, proper customer service management s the key to success for any company or organization. 6. Competitor Analysis Every company from any specific industry has some competitors which build a good competitive environment for the company. Competitive advantage of a company attracts customers and makes them buy products of the company. Competitive advantage provides many considerable benefits to the companies, such as, increase in the levels of productivity, increase in the profits, and creation of a loyal client base. There are two main contradictory paradigms which make companies achieve competitive advantage; the resource based view (RBV) and the marketing paradigm. According to Hooley and Moller (1998), RBV explains sustainable competitive advantage through rent earning capability of internal resources whereas marketing paradigm tends to use external market orientation in order to achieve competitive advantage. Some of the factors, which contribute towards achievement of competitive advantage in the market, include good public relations strategy, effective business management strategy, provision of premium quality products to the consumers, and a talented and efficient workforce. Effective marketing strategies also play a great role in making a company achieve and maintain competitive advantage. Implementation of generic business strategies and presence of an efficient workforce are two of the most important factors behind achievement of competitive advantage in the market. Companies analyze the marketing strategies of their competitors while developing their business and marketing plans because the analyses make them know the strengths and weaknesses which the competitors have in their marketing strategies. 7. Core Marketing Strategy - Segmentation, Targeting, and Competitive Positioning An effective marketing strategy is one which creates customer value by making customers aware of their importance for the company. When a company identifies some marketing goals, the managers of that company start working for the development of such marketing strategies which can help the company achieve those goals successfully. After marketing managers of a company develop a marketing plan for the company, the next step is to implement the plan through creating tactical marketing programs and identifying target markets. Planning is the first and the most important step in the strategic marketing process. Hamm (2010) states, “In order for any business to succeed, there is a planning process that needs to take place”. Without proper planning, managers cannot develop a productive plan for the company. Managers also need to perform comprehensive analysis of all aspects of the developed plan in order to know its strengths and weaknesses before actually implementing the plan. Once the analysis is done and all the aspects of the proposed plan are examined, managers can give the green signal to the subordinates to implement the plan. Let us discuss there important aspects of an effective marketing strategy, which include segmentation, targeting, and competitive positioning. 7.1 Segmentation Market segmentation is a strategy in which marketers divide a large market into subsets of customers based on some common factors, such as, needs, demands, common characteristics, and financial power. Market segmentation helps a company understand the needs of the customers. Marketers develop different marketing strategies for different market segments based on the analyses of those segments. 7.2 Targeting Market targeting refers to the process of identifying customers who are likely to buy some specific products or services. Market targeting is based on three different approaches which include undifferentiated marketing, differentiated marketing, and concentrated marketing. Market targeting requires an in-depth understanding of the needs and demands of the customers in order to make this activity successful for the company. 7.3 Competitive Positioning Smith (2011) state, “Market positioning is the manipulation of a brand or family of brands to create a positive perception in the eyes of the public”. A company needs to position its products very carefully because it plays a key role in the achievement of competitive advantage for the company. Strong positioning of products means high level of sales of the company’s products. On the other hand, poor positioning means poor sales and decreased productivity for the company. Therefore, competitive positioning needs to be dome in order to achieve competitive advantage in any specific market. References Cooper, L 2000, ‘Strategic Marketing Planning for Radically New Products’, The Journal of Marketing, vol. 64, no. 1, pp. 1-16. Hamm, S 2010, Strategic Marketing Plans - 5 Steps to Developing a Plan That Works, viewed 09 November, 2011, . Hooley, G & Moller, K 1998, ‘Competitive positioning and the resource based view of the firm’, Journal of Strategic Marketing, vol. 6, no. 2, pp. 97-116. Masters, T 2011, What is Strategic Marketing?, viewed 09 November, 2011, . Perez, A 2010, Importance of Creating a Marketing Plan For Your Business Offline - 3 Basic Questions to Answer, viewed 09 November, 2011, . Ryals, L & Payne, A 2001, ‘Customer relationship management in financial services: towards information-enabled relationship marketing', Journal of Strategic Marketing, vol. 9, no. 1, pp. 3-27. Smith, S 2011, What Is Market Positioning?, viewed 09 November, 2011, . Tatum, M 2011, What Is a Strategic Marketing Plan?, viewed 09 November, 2011, http://www.wisegeek.com/what-is-a-strategic-marketing-plan.htm Tatum, M n.d., What Is Consumer Behavior?. viewed 09 November, 2011, http://www.wisegeek.com/what-is-consumer-behavior.htm Weerawardena, J 2003, ‘The role of marketing capability in innovation-based competitive strategy’, Journal of Strategic Marketing, vol. 11, no. 1, pp. 15-35. Read More