Finding Customers - Market Segmentation - Assignment Example

Marketing Management Table of Contents Table of Contents 2 Introduction 3 Marketing Environment 3 Market Segmentation 5 Pricing policies 6 Marketing Communication 6 Conclusion 7 References 8 Introduction In today’s competitive business scenario marketing is the key to success of an organization as well as its products and brands. One of the main reasons is that marketing is perhaps the only functional area that directly interacts with the customers of the organization. There are several theoretical definitions of marketing, but the most accepted one is given by the American Marketing Association. According to them “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large” (American Marketing Association, n.d.). Each and every organization, today, give huge importance to marketing. Marketing of a restaurant is basically nothing but the marketing of the service of that restaurant. However, restaurant marketing is little more difficult as compared to any other organization or product as the restaurant industry is extremely competitive in nature. This paper is all about a new restaurant called ‘London dining Experience’ and various issues regarding marketing of this restaurant. The paper includes an in depth analysis of the marketing environment of the restaurant, the process and the reasons of segmentation of the market of ‘London dining experience’. Marketing Environment Generally there are two distinct marketing environments that influence an organization. These are micro and macro environment. It is very important for any organization to analyze its marketing environment because marketing environment comprises of all those factors that have either direct or indirect influence on the organization. As far as ‘London Dining Experience’ is concerned, the restaurant is about to launch. As a result it needs to have clear understanding about its marketing environment. Like any other organization microenvironment of this restaurant would include its suppliers, competitors, customers and marketing intermediaries. On the other hand the macro environment of this restaurant is comprised of economics, demographics, nature, politics, culture and technology (University of London, n.d.). So, it can be stated that the marketing environment of this restaurant is the combination of all these factors. Proper analysis of all these factors would enable the organization to create and maintain healthy and effective relation with its suppliers and customers, to have clear idea what its competitors are currently doing, to clearly understand the current tastes, needs and wants of the customers and finally to make effective and efficient business decisions. As a result it can simply be said that marketing environment is crucial for gaining sustainable competitive advantage. Like any other business organization, ‘London Dining Experience’ is also influenced by all the factors in its marketing environment. If micro environment factors are considered suppliers, competitors and customers are likely to have maximum impact on the restaurant’s business. Suppliers are likely to heavily influence the business as without inputs the restaurant cannot operate. Timely delivery of inputs without compromising the quality would be crucial for a restaurant like ‘London Dining Experience’ that would be newly launched. Another crucial environmental factor is the competitors of the business. Since ‘London Dining Experience’ is a new restaurant brand that would be launched in south east London, it needs to know its major competitors which are already having their operation in that particular region. Strong competitors are likely to be financially and brand wise stronger than London Dining. Moreover if the competitors are targeting the same target customers that would be targeted by London Dining then it would be tough challenges in attracting the customers. The most important factor that would influence the business of the restaurant is the customer. In restaurant industry customers are the king. If target customers are well accepting the service and quality of the restaurant then even a newly launched restaurant like London Dining can become the most popular and successful restaurant in the south east London overnight. Market Segmentation Segmentation could be referred to the process of partitioning or classifying the market into some specific groups of potential customers who share similar needs and are found to be exhibiting similar behavior while purchasing any products or service (Weinstein, 2004). Generally a particular segment is homogenous in nature. Generally marketing involves indentifying the target customers and satisfying their needs, but different needs vary with the customers. As a result if all the customers are offered with same product then there would be a portion of customers who would not be satisfied and this would leads to wastage of resources (Croft, 1994). In order to understand and satisfy customers’ need it is crucial to segment the market properly. Furthermore if every restaurant targets the same customer with the similar offering then there would be price war among the players. Since London Dining is a new comer in the market it would be difficult for it to bring down the prices of the items at the competitors’ level. As a result the restaurant needs to segment its market and target that customers group which would provide the best possible profit margin. Generally segmentation is done on the basis of various factors like age, gender, family life cycle, demographics, geography, culture, income, occupation etc. (Bull, Passewitz, n.d). Segmentation in the context of London Dining Experience can be done on the basis of age, gender, income and occupation of the people who are living in south east London. Since London Dining Experience is going to be a high class restaurant, it should segment the market mainly on the basis of income and occupation of the residents. The target market segment of London Dining Experience would be the upper class people in the society. Pricing policies Various pricing policies that are mainly used by the organizations are target based pricing, cost plus pricing, value based pricing, ongoing pricing and perceived value pricing. Determining pricing policy generally depends on the type of industry that the organization in, products and service, competition in the industry and on the customers. Since London Dining Experience would belong to the restaurant industry which is basically a service industry, pricing policy could be determined on the basis of the value that is offered to the customers by the restaurant. More precisely value based pricing would be appropriate for the London Dining Experience. Price of each and every item would be decided based on the value of the quality and the experience that the customers would be enjoying. Marketing Communication Marketing communication is one of the most important factors that greatly influence the success of an organization and its products or brands. Marketing communication mix is comprised of different marketing communication elements like advertising, public relation, sales promotion, direct marketing etc. These are needed to be followed to achieve various marketing objectives. Marketing communication is likely to play an important role in the future business plans of London Dining Experience. Since the restaurant is about to launch, it would be crucial to create awareness regarding its services and food items among the target customers and this can only be done by designing and implementing proper marketing communication strategy. Once the awareness is created, then marketing communication tools would be used to make the items as well as the brand ‘London Dining Experience’ popular among the target market segment. Among various marketing communication tools advertising and public relation would be most important in order to achieve marketing objectives. Advertising could be done electronic and print media. Local television channels, cable network and radio channels could be used for advertisement. If restaurant feels that giving advertisement in television and radio is getting costly, then print media should be used. There are different formats of print ads. In print media local magazines and newspapers would mainly be used. Conclusion Since ‘London Dining experience’ is getting newly launched, marketing would be one of the most important functional areas for the restaurant. Various marketing environmental factors are likely to greatly influence its future business. Marketing environment would consist of both micro as well as macro environmental factors such as customers, suppliers, competitors, demographics, culture, geography, economy etc. Pricing would be another factor that would be important in attracting customers. Value based pricing would be appropriate for London Dining Experience as it would be a high class restaurant that would target those people who belong to the upper class in the society. Apart from pricing, marketing communication would also be important for the future of the restaurant as it is crucial to create the awareness of the restaurant among the target customers. References American Marketing Association, No Date, Marketing, Definition of Marketing, [online] Available at: http://www.amaboston.org/definition-of-marketing.html [Accessed on February 13, 2010] Bull, N. H. Passewitz, G. R. No Date, Finding Customers: Market Segmentation, Ohio State University Fact Sheet [Online] Available at: http://ohioline.osu.edu/cd-fact/1253.html [Accessed on February 13, 2010]. Croft, M. J. 1994, Market segmentation: a step-by-step guide to profitable new business, Routledge University of London, No Date, Types of environment, Analysing the market environment [Online] Available at: http://www.londonexternal.ac.uk/current_students/programme_resources/lse/lse_pdf/further_units/marketing/marketing_chapter3.pdf [Accessed on February 13, 2010]. Weinstein, A. 2004, Handbook of market segmentation: strategic targeting for business and technology firms, Routledge Read More