General Overview of Marketing - Essay Example

? General Information Contents Contents 2 Question 2 4 Question 3 5 Question 4 6 Question 5 7 Question 6 8 Question 7 9 Question 8 10 Question 9 11 References: 13 Question 1 Consumer behaviour plays a very vital role in understanding the buying patterns prevalent among individual or organizational buyers for the products or services, an organization is offering in the marketplace. The following are the steps involved: Conduct a survey among the target consumers for information on the product or service offered by the company Try to identify the current needs of the consumers Try to find out the current features sought by the customers Try to identify the price range preferred by the product. Importance in Marketing The world, today, is a global marketplace. The emergence and strong penetration of internet all over the world, has facilitated the evolution of the virtual marketplace through the popularization of sites like Amazon.com, eBay. The big and small enterprises, which are catering to the needs of the customers on an individual or a business level, are trying to beat each other in the global market place, by competing with each other in various markets all around the globe, while using technology as the primary tool for marketing. So, as a matter of fact, today’s consumer has the power of information, using which they can access or source the product or service of their preference from anywhere around the globe. As a matter of fact, the companies have to understand the customer’s or client’s requirements in a more effective manner in order to cater to their needs and to estimate the forecasted demand from their products or services in a more effective manner. Analyzing consumer behaviour helps the organizations to identify and idealize, how consumers are supposed to behave in the market with relation to a particular product or service (Haynes, et. al, 2007, p.4). Question 2 There can be a host of promotional strategies that can be implemented for value communication for a particular product or service. The most important idea behind opting for promotional strategies is to educate the masses, more specifically the target segment, about the new product or service and its related features and finally generate revenue from selling the product in the market. The most common form of promotional strategy employed by companies to popularize their product is advertising. Companies use various kinds of advertising techniques using various media like the radio, television, and internet as well as the print media like newspapers, magazine etc (Pride & Ferell, 2011, p.514). Advertising in today’s date has taken up various advanced forms and mediums. Today’s consumers are increasingly becoming internet savvy and as a result are most of the time logged on to the internet based networking sites. The networking sites, acts as a strong platform for social communications for the internet users, and companies want to make the most of this online boom by popularizing the product using this platform. Marketing a product targeted mostly towards the teenage and young consumers can be very effective in the market while the cost per contact is comparatively low. The electronic media like the radio or the television can also be considered a cheap mode of promotion as the cost per contact is relatively low with regards to the exposure provided to the products or services. The maintenance of an individual sales force for the purpose of promotion and selling of services and products to organizational clients in the case of business to business marketing is the most expensive mode of promotion. Promotion of services and products to the organizational clients needs the expertise of technology, knowledge of the feature of the products in details as well as relationship building which makes the process all the more expensive. Question 3 Distribution is the process of efficient delivery of value to the customer by making the product or service available to the customer or the client. It is essentially an important part of the product mix which has to be executed in a timely manner so as to cater to the needs or demands created amongst the customers as a result of efficient value communication or branding. Shorter distribution channels are no doubt, are the most direct means of distribution but it may not be a very efficient one which can be applicable in all cases. Shorter distribution channels works well for products with high value, and are highly customized in nature as per the client’s demands. Moreover, the products or services sold without following the conventional long range distribution model are mostly catered to the needs and requirements of large organization, which form a part of the industrial buying process, which falls in the purview of Business to Business marketing (Petzer, et. al, 2006, p.363). These products generally are bought after prolonged negotiation with the buying team or the purchase department of the Buyer organization. In case of fast moving consumer goods, the shorter the distribution, the more harmful it becomes for the efficient delivery and sale of the product. In the case of FMCG products, which have low involvement from the buyer, intensive and extensive distribution is the key to the success of the product in the market. If the product is not available in each and every store that falls within the target markets, then the substitute product which remains available in the store as a result of effective distribution process picks up the market, and start acting as the competitor to the initial product. Question 4 The marketing environment comprises of a number of factors which can be broadly classified as macroeconomic and microeconomic environmental factors. They mostly comprises of demographic as well as economical factors, political, cultural and even technological factors. As a matter of fact, companies have the stance to either proceed with an aggressive stance or react passively to the entire environmental situation related to the marketing issues. Certain companies prefer taking a proactive stance to the entire situation and rather than watching the entire environment unfolding itself in its own pace, they actively try to take charge of the entire situations and sometimes actively and aggressively try to come up with a counter statement or a powerful counter strategy to tackle the scenario. While companies can try to react to general environmental issues, political or social or even natural environments can be increasingly difficult to control. In case of political environmental conditions related to marketing, companies try to respond to the pressure from political scenario by forming a consortium and hire lobbyists to influence the power play. In case of natural changes in the environments, companies have to increasingly find a way to accept the change and move on while still continuing to deliver value to the consumers or end customers (Kotler & Armstrong, 2008, p. 85 &86). Customers are at the center of the pie for each and every marketing activity undertaken by an organization. The main cycle starting from value generation, value distribution to value communication and value capture is directed towards the customers. Be it in the case of industrial marketing or consumer marketing, consumers are also at the receiving end for the marketing activities undertaken by an organization. Even companies react to marketing environment only to make their consumers aware of the efforts undertaken to for value delivery to the customers. Question 5 Product, place, promotion, price and people – all the key elements present in the marketing mix plays effective and distinct roles in the part of delivering values to the customers. Product is the process of value creation. In today’s market, it is a crucial factor, surrounding which the role of other vital elements of the marketing mix comes into play. Innovation is the buzzword, when it comes to product development as more and more customers are looking for value addition in their new product purchases or even in their existing products through technological modifications or software updates for products related to technology. Place which stands for market identification play a key role in the marketing mix. Identifying the right kind of markets, depending on the product type or category is very essential as consumers or effective buyers need to have the capital or the purchasing power parity in order to avail the product. The identification of the target market may lead to the success or failure of the product. Promotion is the process of value communication to the target audience. This plays a vital role as promotion is the process to increase the buyer’s involvement with a particular product. It is very much certain that higher the level of involvement between the product and the buyer, the more is the chances for the consumer to purchase the product. Price is the method of value capture in terms of the product. Pricing for a particular product has to be in sync with the target audience as well as taking the account of the substitute products. Failure in choosing the optimum price for a product may lead to widespread rejection of the product by the consumers, while opting for the next best substitute. This will affect the market share of the company in long run. The people factor is a critical factor in the entire gamut of marketing mix. Organizations are increasingly realizing that employees are the first customer for any particular product manufactured by the company. Keeping the internal customers happy will lead the process of increasing satisfaction through effective support and services involved in delivering value to the end consumers. Question 6 Distribution is one of the most vital aspects in the 4Ps of marketing. The different distribution strategies are as follows: - Selling to the customer via dealer and retailer, - Selling to the customer via dealer - Selling directly to the customer For FMCG products, it will be highly effective to employ the long range distribution channel, which involves a lot of intermediaries like the dealer, wholesaler, and retailer. FMCG products are low value products, where the revenue from selling each product depends on the sales volume. So higher the sales volume, the larger is the profit generated by selling the product. Since FMCG products are mostly low priced, so the buyers’ involvement with the product is also extremely low. If a particular brand of product is not available in the market, the consumers immediately switch to the next best alternative. For example, HUL products are sold in India and China, using extensive and intensive strategies in order to generate more sales by reaching out to a large number of customers. For premium range products catering to the niche segment, it is effective to use the exclusive distribution process, as the product is being targeted to a particular niche market. For example, fashionable products are sold only from their exclusive stores. For industrial products, it is effective to maintain a direct sales force to sell directly to the customer. The most important factor is that in case of B2B clients, the products demanded are mostly customized in nature and are sold through extensive negotiations between the buyer and the seller (Rolnicki, 1998, p. 12). For example, a bike manufacturer will need exclusively make precision steel tubes, which are an essential component for the manufacturing process. This precision steel tube has no use as such in the open market, if sold individually and also will be bought by the buyers on contractual basis, which indeed needs a lot of negotiation. Question 7 The following are the steps involved for Effective Targeting: - Identify the kind of need fulfilled by the product - Categorize the masses in terms of demographic factors like age, sex, location whose needs are fulfilled by the product - Outline and select a particular segment of the masses, whose needs are fulfilled by the product, on the basis of purchasing power parity. - Determine the price of the product and try to create a match between the supply and demand of the product to the right people at the right location. Segmentation, targeting and positioning (STP) is a very vital component in any marketing plan for a product or a business. It helps to create a bridge between the value creation and value capture in regards to the product, by making the product available to the right segments of consumers in the marketplace. Targeting the consumers also means educating the right segment of buyers about the benefits offered by your product as compared to the nearest competitors (Business Link, 2012). In most cases, segmentation is followed by targeting, which then moves forward to proper positioning of the product in the minds of the consumers, using the right kind of promotional strategies and the promotional medium. Question 8 Consumer behaviour is a study undertaken to identify the behavioural patterns of the consumers in the marketplace, with relation to the products that are available for a particular brand or in the market as a whole. It is a crucial source of information to identify the cognitive and psychological patterns of the consumers in relation to their buying preference for products or services. In depth analysis of the consumer behaviour for a particular market helps the marketer to identify the different decision making patterns existent amongst the various categories and segments of the masses, on the basis of their social status as well as the purchasing power parity. The information generated from studying the consumer behaviour prevalent in a particular location, helps the marketer to design an effective strategic marketing plan for an existing product in an existing market or even a marketing plan for pushing and penetrating a product in a new market. The consumer behaviour reports provides in-depth analysis of the customers’ current buying patterns and thereby helps the organizations’ marketing department to identify the target group for their new product or service (Tyagi and Kumar, 2004, p.2). The behavioural analysis of the consumers also provides useful analysis of the consumer buying patterns and preference for new or existing products, while reacting to the macro and microeconomic developments that are happening in the local regions as well as around the globe. Question 9 There can be a wide range of factors that influence the pricing decisions for a particular product. Primarily, it is a case of pure economics related to the supply and demand for a particular product. If the product is having a high brand recall in the open market and has a shortage of supply in the market, the organizations will not mind hiking the price of the product by some margin and then supplying more of the product at the revised price. It is also a common strategy to keep the pricing very low for a particular product, when it is entering a new market. Once the brand gets established and have recognition from the consumers, the manufacturers subtly hike the price of the product. So the brand factor is also taken into account during price determination (Groucutt, Leadley, and Forsyth, 2004, p.302).­ The substitute factor is also a crucial point in influencing pricing decisions. In the case of FMCG products, threats arising from substitute competitor brands are too high. As a result, the prices of the products are always in competition with the substitute brands. Another important variable is the segment factor, to which the product is actually targeting. If a particular brand of watches is only targeting the premium or rich customers, then the product will be made available at premium and high range exclusive prices and in selected areas. This will help the high class consumers to have an ego drive with relation to the product. References: Business Link, 2012. Create Your Marketing Strategy. [Online] [Accessed 2 May, 2012]. Groucutt, J. Leadley, L. and Forsyth, P., 2004. Marketing: Essential Principles, New Realities. UK: Kogan Page Limited. Haynes, R. et.al, 2007. Consumer Behaviour Level 2. Cape Town: Pearson Education South Africa (Pty) Ltd. Kotler, P. and Armstrong, G., 2008. Principles of Marketing. Twelfth Edition. India: Pearson Education, Inc. Petzer, D. et.al, 2006. Fresh Perspectives: Marketing. Cape Town: Pearson Education South Africa (Pty) Ltd. Pride, M. W. and Ferrell, C. O. 2011. Marketing. USA: Cengage Learning. Rolnicki, K., 1998. Managing Channels of Distribution. USA: AMACOM Div American Management Association Tyagi, L. C. and Kumar, A., 2004. Consumer Behaviour. New Delhi: Atlantic Publishers and Distributors. Read More