Successful Marketing Strategies - Book Report/Review Example

?Marketing Discussion Questions Question one Value is the benefits that individuals attach to a product or service. It is a function of intrinsic product features, service and price and has different meanings for different people. Customers always estimate the value that a product or service will give to them and this may not be met by the product or service during its use (Mullins & Walker, 2010). Marketing plays an important role in the acceleration of the markets for the acceptance of the new products. Marketing activities together with communication initiatives ensure that the markets are aware of the product characteristics and features together with its perceived advantages before they enter the market. When the products are finally brought into the market it is necessary to keep the customers interested in the product or service through activities that are aimed at enhancing brand loyalty. Thus marketing actions also come in here to build brand loyalty through promotions and other loyalty programs that make the customers stick to a given brand. Marketing also helps in pricing products and services. It is true that some customers make attach value to a product basing on its price as compared to others in the market. Pricing ensures that customers remain loyal to the product with periods of discounts and premium pricing. Value is also created through the establishment of long-term relationships with its customers. This is important for successful marketing strategies (Mullins & Walker, 2010). To stakeholders marketing activities enhance shareholder value through the reduction of the vulnerability and volatility or risks associated with cash flows. This has been made possible through various marketing activities and processes that include the design of new products, supply chain management, managing customer relations, channels and even strategic partners. Question 2 A marketing orientation is a kind of management where a business reacts to what the customers want. The decisions that are made here are based on information gathered about customer needs and wants rather than what the business would want to think is right for their customers. This concept is based on the philosophy that the planning and coordination of all the activities of the company should be focused on the primary goal of satisfying the customer needs and sees this as the most effective means to attain and sustain a competitive advantage and achieve the company’s goals (Mullins & Walker, 2010). The advantages of a market oriented approach are that there is a focus in all department on customer needs and competitive circumstances in the environment. They develop products specifically to address customer needs. Secondly this approach has the ability to quickly adapt products and functional programs to fit to the changing business environment. To them market research is very important in before programs are designed and produced. These organizations are also responsive as they have adopted a variety of organizational procedures and structures to help them. Such include real time information systems, detailed environmental scanning and seeking frequent feedback among others. The disadvantage of this approach is that it is seen as a philosophy such that it aims at satisfying all customers regardless of the costs. This leads to a financial disaster. A good example of a market oriented firm is Nokia that keeps changing it products depending on the needs of the customers. When the mobile phone market changed from the calling and texting environment to customers using their phones to store documents, listen to music, take pictures, they had to come up with innovative products to suit customers’ needs and these led to the design and production of phones with memory cards, cameras and internet capability (Mullins & Walker, 2010). Question 3 Different decisions are made before an individual buys a product. Let us take the example of buying a bathing soap and buying a computer. Here different decisions are made that marketers have identified to go through certain stages. There is however a difference in the decision process such that not all products will go through the whole process before they are bought. Basic commodities like soap, toothpaste may not go through the entire decision making process but most electronics will necessitate a customer to go through the whole process of decision making before they are bought (Mullins & Walker, 2010). Marketers understand this aspect and have therefore gone ahead to design product depending on this decision making process. For basic commodities the aesthetic value is important to capture the customers’ attention and this is done through attractive packaging. For the other commodities like computers marketers will go for design specifications that are seen to be of higher quality than the competitors so that when a customer is performing information search they find a commodity that matches their needs and is pocket friendly. Consumers may not understand this process as it is done without their thinking about it (Mullins & Walker, 2010). This decision making process affects the marketing mix as the marketers have to design basic commodities keeping in mind what the local preferences are, market segments, consumer desires but for other commodities they must be produced with an understanding of the current global trends. Different people buy different things because of the variations in personal characteristics such as needs, benefits sought, attitudes, values, past experiences and lifestyles and social influences such as their social class, reference groups and family situations (Mullins & Walker, 2010). Question 4 Organizational markets include manufacturing firms, service providers, wholesalers, retailers, nonprofit organizations and governments. These buy products and services to be used in their day to day operations or to resell to other consumers. Individual markets on the other hand refer to people or individuals who buy goods and service for their personal use. They purchase products just the same way as the organizations identified above do purchase products (Mullins & Walker, 2010). The distinguishing factors between organizational markets and consumer markets are based on the following: (1) the motivation of the buyer; (2) the demographics of the market; and (3) the nature of the purchasing process and the relationship between the buyer and the seller. Individuals buy goods for personal use while organizations demand for products is to facilitate production of other goods and services, to use in its operations and for resale to other consumers (Mullins & Walker, 2010). Organizations tend to have limited potential customers but they buy high volumes of products than consumers. Organizational purchase processes involve evaluation processes following some specified criteria; they have closer buyer-seller relationships and buy on specifications. This is not the case for consumer markets. These unique characteristics pose different challenges for marketing programs. For organizational buyers it is difficult to forecast sales as it all depends on the demand for organizational goods and services thus limiting the marketers’ ability to influence demand. Another thing is that the complexity involved in organizational purchase processes and demographic factors have also marketing implications such that they facilitate direct selling through company agents and vertically distributed channels. There is also a high reliance on media such as trade journals, product brochures and websites. Another impact is that organizational markets will require that all parts of the business be customer oriented and that all decisions that are made or done on the basis of complete and accurate understanding of the customer needs (Mullins & Walker, 2010). Question 5 There are three strategies for segmentation: demographic, geographic and behavioral or psychographic. In demographic segmentation marketers usually take it to mean the attributes of individual consumers. These characteristics include (1) age such that products may be designed for the youth or the older people; (2) sex or gender such that products may be designed for men or for women; (3) Income- a company may design products for the higher income group or lower income segment of the population; (4) occupation – there are products that are tied to occupations such as uniforms and work shoes. In geographic; (5) education such that some products are highly dependent on level of education such as books and (6) Race and Ethnic origin (Mullins & Walker, 2010). In geographic segmentation products are designed and produced depending on locations or regions. These regions vary in terms of growth rates, customer needs etc. in psychographic segmentation or behavioral segmentation the following are important elements: consumer needs, product usage pattern, general behavioral patterns such as lifestyles. In organizational markets the following elements characterize them: the structure of firs, purchasing activities and the type of buying situations (Mullins & Walker, 2010). An organization in order to determine which segmentations strategy to employ will often evaluate the population’s future attractiveness and their strengths and capabilities relative to the segments needs and competitive situations. A common analytical frame work is used across all segments to compare the attractiveness of each segment using similar criteria and then they are prioritized them before settling on a given segment to target. The framework commonly used is the market-attractiveness/ competitive position matrix (Mullins & Walker, 2010). Question 6 Porter identifies three generic business strategies and these include: (1) the cost leadership strategy is where the firm wins market share through appealing to cost conscious customers. It is achieved by having the lowest prices in the market segment. To achieve this a firm must have a high asset turnover, low operating costs and the control of the supply chain so as to ensure low cost; (2) the differentiation strategy is where products are developed that offer unique attributes that customers view as valuable and better or different from their competitors. The firm or company is able to charge a premium price because of the uniqueness of the product; (3) focus strategy is where a firm concentrates on a narrow segment of the population and within this segment implements cost leadership or differentiation strategy (Mullins & Walker, 2010). Businesses have a problem selecting which strategy to employ. It is difficult because different strategies pursue different objectives and goals. They work in different domains and with different competitive approaches. The problem is that they do not work equally well under the same environmental conditions (Mullins & Walker, 2010). Therefore before a firm selects what strategy to adopt it is important to first consider what kind of business they are engaged in. Do they produce goods or do they offer services. Once this is established it is important the firm then assess environmental conditions within the market and these conditions include technological and competitive. The firm then will assess its strengths and weaknesses relative to its competitors that are important in each of these strategies. It is only then that a strategy can be identified that will benefit the firm (Mullins & Walker, 2010). Question 7 The first stage in new product development is the idea generation stage where a firm engages various people in generating ideas. These people include customers, company own staff, product managers, sales force, marketing researchers and even competitors among others. A substantial number of new ideas must be generated in order to get a successful product. The ideas generated must fit with the company’s mission, offer advantages and one that can be produced by resources available in the firm (Mullins & Walker, 2010). The second stage is called preliminary assessment where the idea is evaluated on the basis technical and market feasibility. Fundamental questions here include can the product be produced and delivered? How large is the market? Will customers take it? This stage eliminates weak ideas. The third stage is called detailed investigation where the idea is investigated for its market potential. A comprehensive customer, market and competitive analysis are made. Primary research is also done here. A product prototype may also be developed at this stage to support research (Mullins & Walker, 2010). The fourth stage is product development where the product is designed, pricing and channels of distribution are also determined. The brand name is identified and packaging is also done. Marketing research may also be needed here. The fifth stage is the testing and validation stage where there are two common tests done: the laboratory tests and field test. Field tests are aimed at getting an estimate of the sales once the product is rolled out. Laboratory tests are done to make sure the product serves what it was designed to do and clarify issues that may present legal problems. The sixth stage is commercialization where the product is rolled out to the market. There are strategies used here such as the forgoing testing strategy and the commercialization strategy (Mullins & Walker, 2010). New products fail because not enough people want to buy them. This is because no or limited research was done on the target market to identify customer needs, preferences and requirements before developing the product. Different decisions have to be made during the product development cycle and neglecting any one of them poses a huge risk to the success of any new product (Mullins & Walker, 2010). Question 8 Pricing plays an important role in the development of a new product. Some of these roles include: pricing helps to maximize sales growth and this is done especially when the product is new in the market in the market and a low price strategy is taken up so as to increase sale. The second role is to maintain quality or service differentiation. Due to high competition in the market a firm may be forced to charge premium pricing for its product especially where products are of high quality (Mullins & Walker, 2010). It does this in order generate revenue and maintain an advantage over others in the market. The third role is to maximize current profits. When a new product is added to a chain or when is pioneered the objective is to maximize short run profits. They do this through skimming pricing. The fourth role is for survival purposes such that when the product reaches end of the cycle and there is little demand the firms charge lowly for the products in order to keep them going and to maintain cash flows. The last role is that of social objectives as some companies may make very low pricing for a given segment of the market in order to achieve broader social objectives. This is true for not-for –profit organizations (Mullins & Walker, 2010). There exists no one best pricing strategy from my understanding. This is because various pricing strategies are important at different stages in the product development cycle. One strategy may work for example at the entry stage for example skimming pricing but this may not work when the product is in the mature stage. In order to make sure that the product survives it is important that a pricing strategy that charges low is arrived at in order to maintain revenue streams and operation costs (Mullins & Walker, 2010). Question 9 When thinking about a business idea it is important that an individual realizes the varied possibilities that exist. First one must figure out what kind of business they want to set up. There are three kinds of businesses, a manufactured product where an individual buys the parts that make up the product and then make up the product themselves. The second is a distributed product where an individual buys a product from wholesaler, retailer or a manufacturer. The third kind of business is that of a service where you choose to provide a service to the population (Mullins & Walker, 2010). My business idea is that of beginning a cloth line for the aged people. The clothing business is flooded with many clothes that are designed for the children, the youth and the adults. The aged people lack their own specially designed clothes. Therefore this business may be successful because it is a pioneer project in the clothing industry. The aged people majorly buy clothes that are designed for the adults and this may be uncomfortable for them because of the varying preferences in generations. My idea would be to start a clothing line that looks back at those clothes that were designed in the old days and make them for the older people. In assessing this idea it is important to ask the following questions: Who are the prospective customers of the product or service? What are the current trends in the industry? Who are the possible competitors? What is the possible start up strategy? Do is I have the finances to help me begin the business? Is this business viable in the current business environment? Etc. Question 10 There are various characteristics that have been identified as pertaining to a market pioneer and the first characteristic that has been identified is that of having the biggest market share. This is because there is no competitor at the moment and therefore they hold the biggest market share before other entrants begin to penetrate the market. They set the rules for the game as they form the benchmark for the following competitors. They have distribution advantages as they design the distribution channels to bring the product to the make (Mullins & Walker, 2010). They have economies of scale as they can gain accumulated volume and experience. High switching costs for early adopters is another characteristic. They have a possibility of positive network effects and lastly the possibility of preempting early scares resources and suppliers. The disadvantages of a pioneer include free-rider benefits to followers, market and technological uncertainties, unforeseen changes in technology and customer needs and incumbent inertia because of the gradual updating of existing technologies instead of adopting new technology directly. The follower on the other hand benefit from clarification of the market uncertainty, knowledge on changing customer needs and technologies, benefiting from the pioneers mistakes and an opportunity to get a free ride on the pioneers investment (Mullins & Walker, 2010). Examples of market pioneers include Seiko in quartz watches; Sony was the first company to develop a digital camera called Mavica, apple with the first touch screen devices and the first web browser Netscape. Many companies are followers especially in the technological industry. Examples include Microsoft, dell computers etc. Question 11 An effective marketing plan is characterized by the following components. The first component is the executive summary that provides a brief overview of the entire plan and covers only the main points in the plan. It is usually written after everything has been completed. The second component is situation analysis which assesses the present condition of the organization. It assesses what is happening outside the organization, consumers and the internal functioning of the organization. The third component is the SWOT analysis where that analyses the company’s strengths weaknesses, opportunities and threats. The fourth component is the marketing goals and objectives. The goals are the overall accomplishments that the firm aims to achieve while the objectives are the benchmarks to meeting these goals. The fifth is marketing strategies and here the marketing mix elements that comprise of product, price, place, distribution and promotion are defined. The sixth component is implementation that defines resources and specific actions that will be taken to achieve the goals. The last is evaluation and control and this involves assessing marketing outcomes for effectiveness and correcting mistakes identified (Mullins & Walker, 2010). The advantages of implementing a market plan is that it gives direction on what should be done by defining various aspects that should be taken into considerations. The limitation is that they require a long period of time in preparing them in order to work effectively and they may end up wasting time and resources. Marketing plans should be reviewed each and every time a new product is developed (Mullins & Walker, 2010). Reference Mullins, J. W., & Walker, O. C. (2010). Marketing Management: Astrategic Decisin Making Approach (7th ed.). 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