Marketing Mix Stimuli - M&S Supermarket - Essay Example

? Marketing mix stimuli - M&S supermarket Table of contents Introduction 3 2. How marketing mix stimuli affects consumer responses 3 2 Marketingmix – overview and role 3 2.1.1. Product 4 2.1.2 Price 5 2.1.3 Place 6 2.1.4 Promotion 6 2.2 Interaction between marketing mix stimuli and consumer responses 7 2.2.1 Marketing mix and consumer behaviour 7 2.2.2 Marketing mix and consumer behaviour in practice – the case of M&S supermarket 9 3. Conclusion 12 References 13 1. Introduction In the context of modern marketing communication is considered as of critical importance. Reference is made specifically to the communication between firms and consumers. In practice, it has been proved that firms that are able to communicate effectively with consumers have higher potentials, than their rivals, to secure their growth in the long term. This fact is made clear in the case of Marks & Spencer (M&S) supermarket. M&S is a popular retailer in the global market. In this paper the marketing practices of M&S supermarket are set under examination in order to explore the following issue: is the marketing mix able to affect the cognitive, affective and behavioural responses of consumers and at what level? The review of marketing mix, as used by managers of M&S supermarket, has led to the following assumption: marketing mix has the power to influence various aspects of consumer behaviour. Still, the responses of consumers to a product/ service cannot be precisely identified in advance; only estimations can be made on the basis of the responses of consumers to marketing mix schemes used in markets with similar characteristics. 2. How marketing mix stimuli affects consumer responses 2.1 Marketing mix – overview and role The marketing mix is a framework used in order to secure the success of a product/ service in a new market, known as the target market. Different approaches have been employed for explaining the role of marketing mix. For certain researchers, marketing mix serves as a tool ‘for bringing superior value to a group of consumers’ (Gitman and McDaniel 2008, p.295). For others, marketing mix is mostly a tool for establishing a reliable channel of communication between a firm and its target market (Lamb, Hair and McDaniel 2011). In any case, marketing mix is based on the use of a series of strategies related to specific ‘product, price, place and promotion’, as involved in a firm’s marketing plan (Lamb, Hair and McDaniel 2011). The four aspects of marketing mix, known also as 4Ps (Lamb, Hair and McDaniel 2011) are analyzed below. At this point, the following fact should be made clear: marketing mix can help to improve the positioning of a product/ service in the target market but only under the terms that the strategies incorporating in the marketing mix are carefully monitored (Kotler and Armstrong 2010). This means that even a well structured marketing mix framework cannot produce the expected benefits if it is not combined with an effective control mechanism that would ensure that all parts of the marketing mix are developed according to the terms set by the marketers (Kotler and Armstrong 2010). 2.1.1. Product As part of the marketing mix, the product strategy refers to various aspects of a product/ service, as this product/ service will be promoted within the target market (Gitman and McDaniel 2008). More specifically, the product strategy can refer to issues such as ‘the brand name, the packaging of a product, its accessories and so on’ (Gitman and McDaniel 2008, p.295). In the marketing mix hierarchy, the product strategy is considered as having the most important position. Indeed, without having identified the key characteristics of a product/ service, as this product/ service will be marketed in a particular market, it is not possible for the relevant project to proceed to the next phase (Gitman and McDaniel 2008). As for the other parts of marketing mix also, the choices made in regard to product strategy need to be flexible so that they can be alternated, if necessary, in order to be aligned with the consumer preferences that tend to change continuously in markets worldwide. 2.1.2 Price Traditionally, the price of a product/ service is set according to the product’s/ service’s quality, as compared to other products/services of similar use (Stone and Desmond 2007). This means that in many cases the decrease of a product’s price is not feasible because a balance needs to exist between the product’s costs and its expected benefits (Stone and Desmond 2007). However, the last five years, i.e. since the appearance of the recent recession, price has become a key element of marketing mix. Indeed, the reduction in the income of most people worldwide has led to the need for limitation of prices in regard to most products/ services, at least those products and services that cover the daily needs of people (Stone and Desmond 2007). In practice, the factors that have influenced the level of price worldwide are the following ones: a) l’imitation of real income in most markets’ (Stone and Desmond 2007, p.267), b) increase of competition (Stone and Desmond 2007, p.267), c) continuous financial turbulences in the global market, d) increase of the potentials of consumers to compare prices (Stone and Desmond 2007, p.267) and e) the financial needs of each organization (Lamb, Hair and McDaniel 2011); organizations that need to increase their income for responding to their financial obligations cannot lower the prices of their products/ services (Lamb, Hair and McDaniel 2011). Of course, there is also another case: organizations that address a particular market do not have to align their pricing strategy with the global economic conditions; reference can be made, as an example, to the firms selling luxury cars. The prices of these cars need to be kept at high levels, as price, in this case, is considered as an element denoting the exceptional quality of the product involved. 2.1.3 Place For marketing mix, place is a term used for showing not only the method of distribution of a product/ service to the public but also the route that this product/ service would have to follow in order to reach the market (Dibb and Simkin 1997). This route is known as the marketing channel and it needs to be carefully chosen using the following criteria: the transportation costs, the firm’s financial status, the expected profits and the current risks of the market involved, meaning especially the target market (Dibb and Simkin 1997). High transportation and delivery costs can often set barriers to the limitation of prices of products/ services (Lamb, Hair and McDaniel 2008). From this point of view, the place strategy of marketing mix is considered as closely related to the price strategy (Lamb, Hair and McDaniel 2008). At the same time, the alteration of a firm’s existing distribution and delivery techniques can allow the decrease of price of the firm’s products/ services without the need for other initiatives. For example, a farmer who establishes his own shop for selling his products directly to consumers can reduce his products’ price at the level that the compensation, usually as a percentage on profits, of intermediaries has been eliminated (Lamb, Hair and McDaniel 2008). 2.1.4 Promotion The fourth element of the marketing mix is the promotion strategy. The promotion strategy refers to the various tools and techniques used by marketers for the promotion of a product/ service in the target market (Gitman and McDaniel 2008). In its most common form, the promotion strategy incorporates four promotion techniques, including ‘the personal selling, the advertising, the public relations and the sales promotion’ (Gitman and McDaniel 2008, p.596). Usually, the above techniques are combined in order to secure the success of a product/ service in the target market (Gitman and McDaniel 2008). Among the techniques mentioned above, advertising is considered as having the highest importance for a product’s/ service’s promotion (O’Guinn et al. 2011). Still, the success of advertising is depended on the advertising message chosen (Greene 2011, p.161). The advances of technology have enhanced the value of advertising, as an element of the promotion strategy. Reference can be made, for example, to social networking sites, blogs and other similar communication tools (Greene 2011, p.161). In practice, an effective advertising plan can highly promote a product/ service in the target market, even if the actual differentiation of the product/ service from other products/ services of similar characteristics is not high (Greene 2011, p.161). This means that advertising can turn a common product/ service to a quite successful one, under the terms that an innovative advertising plan will be employed (Greene 2011, p.161). 2.2 Interaction between marketing mix stimuli and consumer responses 2.2.1 Marketing mix and consumer behaviour In order to achieve the targets set in the marketing plan involved, the marketing mix needs to be carefully planned and monitored. The introduction of the marketing mix, as a marketing tool, has been based on the following view: the identification of consumer behaviour in regard to a specific product/ service is critical in order to decide which marketing techniques should be most appropriate for promoting the particular product/ service (Blythe 2008). In other words, marketing mix is based on consumer behaviour, as differentiated in markets with different social and economic characteristics (Blythe 2008). For this reason, before deciding which marketing tool should be used for promoting a particular product/ service, marketers are likely to develop consumer research, i.e. a research in regard to the consumer behaviour within a particular market (Noel 2009). Preferably, the consumer behaviour in regard to product/ services of similar characteristics needs to be identified (Noel 2009). In fact, market research, as a prerequisite for developing a marketing plan, focuses on the identification of consumer perceptions in regard to a specific product/service (Paul 2008). The consumers’ thoughts for an existing product/ service are used as indicators of the potential response of consumers to a product/ service of similar characteristics (Paul 2008). The findings of market research, as a tool for understanding the behaviour of consumers in a particular market, are highly valued worldwide since their accuracy seems to be high (Batra and Kazmi 2009). The importance of consumer behaviour for marketing is made clear in the study of Parsons (2009). According to the above researcher, the key mission of marketing is ‘to make a product/ service attractive to consumers in the target market’ (Parsons 2009, p.168). In this context, it would be necessary to identify the key characteristics of consumer behaviour, especially in regard to similar products/ services, in the target market (Parsons 2009). It is at this point that the relationship between consumer behaviour and marketing is made clear (Parsons 2009). In any case, having understood the consumer behaviour in regard to similar products/ services in the target market helps managers to control risks related to the marketing of a particular product/ service (Lamb, Hair and McDaniel 2010). Indeed, being aware of consumers’ responses to similar products/ services in the target market, marketing managers are able to suggest a marketing scheme that would have many chances to perform well (Lamb, Hair and McDaniel 2010). Also, by studying consumer behaviour in regard to similar products/ services in the target market, marketing managers are able to identify in advance potential characteristics of the product/ service that would not be welcomed by consumers in the target market (Lamb, Hair and McDaniel 2010). It should be noted that the interaction of marketing mix with consumer behaviour can be extended at such level that the cognitive, affective and behavioural responses of consumers are alternated (Batra and Kazmi 2009). Reference should be made to the following example: the performance of luxury cars in a particular market is low; a luxury car maker needs to enter the particular market but has to prepare primarily consumers in the target market, so that a specific level of profit, after entering this market, is guaranteed for the particular enterprise. The firm’s marketers create an advertising message showing the owners of luxury cars as having the same ethics and priorities like consumers in the target market. Through marketing mix the chances for the products of this firm to be welcomed by consumers in the target market are increased. A similar phenomenon seems to exist in the case of Marks and Spencer; the role of marketing mix in influencing consumers worldwide to prefer the firm’s products is analytically discussed in the next section. 2.2.2 Marketing mix and consumer behaviour in practice – the case of M&S supermarket M&S is quite popular in markets worldwide. Food represents a key share of the firm’s activities. In fact, according to the organizational website, 51% of the firm’s sales are related to the firm’s food sector (M&S, About Us 2013). Most of the firm’s stores, about 700, are located in UK (M&S, About Us 2013). In the international market, the firm’s stores can be identified in ‘Europe, Middle East and Asia’ (M&S, About Us 2013). In total, the firm’s activities are expanded to 44 countries worldwide (M&S, About Us 2013). The firm’s operations in the British market are under the close monitoring of its strategic planners. Indeed, according to a statement including in the firm’s current strategic plan, for the period 2010 up to 2013 the performance of the firm in UK has been set as a priority (M&S, About Us 2013). Emphasis has been given on the further expansion of the firm across UK and ‘the improvement of the firm’s brand’ (M&S, Our Plan 2013). For the needs of this paper, the strategic choices of marketing managers in M&S supermarket are set under examination. The marketing practices of M&S supermarket verify the potentials of marketing mix to influence the cognitive, affective and behavioural responses of consumers. Before analyzing the particular fact it would be necessary to explain the above three types of consumer responses. The cognitive part of consumer behaviour indicates ‘the beliefs of consumers in regard to a product/ service’ (Batra and Kazmi 2009, p.10). The affective part of consumer behaviour reflects ‘the beliefs of a consumer on a particular product/ service after evaluating all aspects of this product/ service’ (Batra and Kazmi 2009, p.10). For example, the belief that certain products of a brand are cheap reflects the cognitive part of consumer behaviour while the belief that a brand is better from another reflects the affective part of consumer behaviour (Batra and Kazmi 2009, p.10). The decision of a consumer ‘to buy or not to buy a product’ (Batra and Kazmi 2009, p.174) reflects the behavioural part of consumer behaviour. The potentials of marketing mix, as used by Marks and Spencer, to influence these parts of consumer behaviour can be evaluated by reviewing the firm’s marketing practices. Marketers in M&S have emphasized on the improvement of the firm’s online presence so that the profits generated online to be increased. Indeed, the changes made on the firm’s website have led to the increase of online visitors approximately by 300% (M&S, Our Plan 2013), a fact that indicates a positive cognitive response by the side of consumers. Whether there is a positive affective response, i.e. whether the consumers’ view on certain products of the firm is positive, it can be judged only by reviewing the firm’s online sales, an indicator also of the behavioural response of consumers. During the Christmas of 2012 the sales of the firm’s food department were increased by 22% (M&S, Our Plan 2013), a fact that verifies the following fact: marketers in M&S have managed to influence the affective responses of customers, as this change was reflected in the increase of sales. It is clear that the marketing mix scheme of the firm has managed to persuade people in regard to the quality of the firm’s products leading consumers to buy these products, a fact that it is reflected in the increase of the firm’s profits by 22% (M&S, Our Plan 2013). In addition, the firm has launched a scheme for improving its performance in the delivery of orders. The scheme, entitled as ‘Shop Your Way’ is related to the Place element of marketing mix and refers to the potential of consumers to make their order using different ways, e.g. ‘by phone, in store or online’ (M&S, Shop Your Way 2013). The above scheme helped to the increase of the firm’s profitability. Indeed, in the last year the use of this scheme resulted to the increase of in store orders making these orders the 40% of the department’s total orders (M&S Shop, Your Way 2013). The above facts verify that the marketing mix of M&S has influenced the responses of consumers in all their forms, i.e. the cognitive, affective and behavioural responses, at the level that consumers tend to prefer the products of the firm compared to those of its competitors. The challenge that marketers in M&S have to face for the future is to lower the prices of the firm’s products for responding to the increased preference for food products at low price (PR Web 2012). 3. Conclusion The use of common marketing strategies by modern firms can increase the chances for the success of the marketing plans involved. This view is verified through the case of marketing mix. The above strategic framework can help firms to limit the risks related to the entry in a new market or to the expansion in an existing market. The key advantage of marketing mix seems to be its ability to create customer value, even at average level, in regard to a particular product/ service. In any case, the effectiveness of marketing mix is depended on a series of factors. The experience of marketers on similar projects and the availability of required resources are of critical importance for the success of marketing mix in modern market. In addition, the case of M&S supermarket has revealed that the techniques incorporating in marketing mix are not standardized. Rather, these techniques should vary according to the goals of the marketing strategy and the conditions in the organizational environment. Moreover, it has been made clear that the marketing mix can influence many aspects of consumer behaviour in regard to the target market. In this context, the practice of M&S managers to emphasize on marketing mix for securing the organizational growth worldwide can be characterized as fully justified. References Batra, S. and Kazmi, S., 2009. Consumer Behaviour. 2nd ed. New Delhi: Excel Books India. Blythe, J., 2008. Consumer Behaviour. Belmont: Cengage Learning. Dibb, S. and Simkin, L., 1997. The Marketing Planning Workbook.: Effective Marketing for Marketing Managers. 2nd ed. Belmont: Cengage Learning. Gitman, L. and McDaniel, C., 2008. The Future of Business: The Essentials. 4th ed. Belmont: Cengage Learning. Greene, C., 2011. Entrepreneurship: Ideas in Action. 5th ed. Belmont: Cengage Learning. Kotler, P. and Armstrong, G., 2010. Principles of marketing. 13rd ed. Essex: Pearson Education. Lamb, C., Hair, J. and McDaniel, C., 2011. Essentials of Marketing. 7th ed. Belmont: Cengage Learning. Lamb, C., Hair, J. and McDaniel, C., 2010. Marketing. 4th ed. Belmont: Cengage Learning. 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