The Practices Associated with Marketing and the Challenges Posed by Mass Production - Essay Example

? The emergence and evolution of marketing in response to challenges of mass production Introduction Mass marketing was originally aimed at advertising new products. Producers of the industrial revolution period had to introduce a range of recently invented products like cars and light bulbs. As a result, advertisers had a pressing need to alert customers about the existence of some new innovation and convince them that their lives would improve if they used the new products (Ellis, 2010, p.239). This paper explores the evolution of marketing from the first principles to the modern web based marketing. In addition, the adoption of marketing strategies in the face of increasing competition is discussed. The evolution of marketing On the advent of the factory, new products began to emerge while old products appeared in strikingly new forms. With the flooding of the market with uniformly mass produced products that were virtually indistinguishable from one another, branding was introduced to differentiate the products. Competitive branding evolved to compensate for the product similarity, thereby, achieving image based difference. Essentially, advertising changed from delivering product news to developing an image around a branded version of a product. Design theorists assert that logos were introduced to evoke familiarity in an effort to address the new and unsettling similarity of packaged goods. Brand names replaced small shop keepers as the interface between the consumer and the product (Klein, 2001, p.12). In recent years, marketing has gone into an overdrive with increasing numbers of ads and aggressive new formulas for reaching customers. The astronomical growth rate of the advertising industry is well reflected by the 1998 projection which set the total ad spending at $196.5 billion while the global estimate was $435 billion. This figure outpaces the growth of the global economy by a third. This trend is attributed to the firmly held belief that brands need to continuously and constantly increase advertising in response to increased competition. According to the law of diminishing returns, as more firms increase their ads firms are under increasing pressure to aggressively market their brands (Arvisdsson, 2006, p.178). As a result of the competition, marketers invented more strategies to attract customers. This caused marketers to introduce more clever and intrusive selling techniques. For instance, Calvin Klein stuck CK Be perfume strips on the back of Ticketmaster concert envelopes to attract customers to the CK Be brand. Proponents of branding claim that markets where producers compete based only on price, promotions and trade deals are susceptible to product duplication leading to decreased profits. Some companies have over time integrated their respective brands in the fabric of their companies. Such companies mould a corporate culture around the brand. Everything within such organizations is an ad for the brand; this includes branding employees with such tags as partners, superstar CEOs and design consistencies (Brownlie, et al, 1999, p.379). New media has revolutionised the interaction between consumers and organizations characterized by a shift in power where consumers have more influence on the product. The rise of consumer generated content has turned consumers into content producers. Consumers now possess greater control over what is provided in corporate communications. The shifts in power have not only changed consumer expectations but also have changed purchasing decisions (Bob, 2005, p.285). There is extensive evidence of a decline in traditional media usage among advertisers. In response to changes in technology, marketers are shifting expenditure to new media options. New media has transformed many aspects of brand marketing such as segmentation and targeting through positioning, distribution and customer relation management (Bob, 2005, p.285). Marketing strategies Marketing strategies evolved as a result of the need by marketers to deal with competitors. Companies respond to competitor challenges by counteracting with increased advertising expenditure, cutting prices, increased innovation and introducing new products. As a consequence of mass production, firms need to increase market share by taking away customer from rivals or by creating new markets. Consequently, firms need to guard themselves against attacks by established firms seeking to expand their scope of coverage or by new entrants (Lee, 2001, P.233). Firms must defend their market share and strengthen their position making it hard for competitors to enter the market or for existing firms to challenge them. In addition, incumbent firms may seek to enter a new market, reposition themselves or improve their market position. To this end firms employ both offensive and defensive strategies (Brown, 2001, p.418). Defensive strategies are designed to fend off competitors. They are designed to make a possible attack unattractive. Over the years, marketing managers and business strategists have developed different defensive marketing strategies to fend off competitors and maintain their salesvolume and profitability. Two types of defensive strategies exist. Pre-entry strategies are taken by incumbents before they are attacked by challengers while post-entry actions are taken after the challenger has entered the market (Earls, 2002, p.294). Signaling involves announcement by firms on their intention to take an action. Such announcements can be made through press releases or interviews with the media. Signaling reasserts a company’s commitment to the industry and serves to preempt or deter competitors. Companies often employ the threat or retaliation to lower the probability of attack by competitors. For instance firms may threaten to undersell the competitor by reducing its prices to match those of the rival (Goddard, 1998, p.351). Companies may also defend their market share by fortification and defense. This strategy attempts to build barriers to entry for competitors. Defensive strategies lower the inducement to attack. Firms often enter an industry because the incumbent earn high profits. If the incumbent earns very high prifits, competitors are more motivated to enter the market. To counter this, firms reduce the inducement to attack by reducing the profit expectations of the entrant. The most common barriers to entry are economies of scale, product differentiation, capital intensity, proprietary technology, patents, and access to inputs (Harrison, 2005, p.183). Firms can employ product proliferation, which involves introducing new brands to provide a full product line or to fill gaps used by competitors to enter the market. Proliferation may involve introducing several different versions of a product in terms of models or product size in order to block access to the industry by new entrants. For example, a leading ready to eat cereal company may compete with a full line making it hard for rivals to enter the market. Procter & Gamble is one firm that employs this strategy. A special case of proliferation is the introduction of blocking brands into the market. Blocking brands are designed to fill a gap in the market that a competitor could use to enter the market. Blocking brands safeguard existing profitable brands by precluding competitors from accessing the market and reducing market share by introducing lower prices for the same product (Yannopoulos, 2011, P.7). The continuous improvement strategy involves innovation, and improvement of the existing marketing mix. Innovation involves offering superior features and benefits. Price innovation involves offering better sales terms and other incentives. Continuous improvement helps firms stay ahead of the competition. Sometimes firms can make their own products obsolete by replacing them with new versions. For instance, Intel constantly introduces new and more powerful versions of microprocessors at regular intervals in order to satisfy consumer needs for more processing power (Gabriel and Lang, 1995, p.422). Fighting brands are inferior brands introduced by organizations to fight a competitor’s brand that threatens one of the company’s major brands. Competitor brands are typically lower priced versions of the firm’s premium brands that offer equal quality at a much lower price. Introducing fighter brands helps fight off a price-cutting brand that is cutting the core of the brand. For example, Heublein used a fighting brand strategy to successfully protect its Smirnoff vodka brand. When a rival introduced its brand at a lower price than Smirnoff, Heublein raised the price of Smirnoff and introduced a new fighting brand at a lower price than the competitor’s brand (Yannopoulos, 2011, P.7). One prominent offensive strategy is the predatory strategy where a firm accepts lower profits for the purpose of keeping out new competitors or inflicting damage to existing rivals, which kicks them out of the market. This strategy involves predatory pricing where firms cut prices below costs to eliminate a rival, with the hope that prices will rise after competitors exit the market. Sometimes predators selectively cut prices in intensely competitive markets and use proceeds from less competitive markets to sustain the price cuts. This strategy is most effective against rivals with limited financial resources. Other predatory tactics include tying and bundling. This is where firms cut their rivals lines of supply. Firms can form alliances or obtain contracts with part manufacturers, suppliers and distributors to stifle competitors by blocking their access to markets or materials (Ferrell and Hartline, 2011, P.197). The internet is a powerful tool that companies can use to obtain a competitive advantage. It offers businesses and marketers opportunities to grow sales and reduce costs. Research indicates that small businesses that use the internet have grown 46% faster than those that do not use it. It is important for marketers to create strong online brand presence by providing customers with a positive experience. Companies hoping to attract and retain customers and visitors to their website need to improve their service levels and offer superior value and satisfaction (Rao and Klein, 2013, P.160). Branding is especially important in internet based marketing and business as customers prefers prefer to buy from well-known and reputable companies. Many consumers avoid purchasing online because of trust and privacy issues. Well established brands usually have an advantage over less familiar brands as they have been established for several years and enjoy a higher level of trust among customers (Rao and Klein, 2013, P.160). The internet offers marketers excellent pricing research and testing capabilities. The internet allows marketers to research and test pricing decisions in real time and at low costs. By tracking consumer responses to prices, marketers can set prices with better precision and make appropriate adjustments. Information stored online in data bases helps marketers segment their markets and uncover profitable customer groups (Weitz and Wensley, 2006, P.104). Conclusion Mass production of goods induced producers to invent advertising and branding to differentiate products and offer customers a safety net against inferior quality. Branding helps companies sell products in expansive markets while maintaining the same quality and service. Marketing strategy evolved out of basic advertising as companies sought to fend off competitors and increase market share as the volume of production increased and as more competitors emerged. Bibliography: Yannopoulos, P. (2011) Defensive and Offensive Strategies for Market Success. International Journal of Business and Social Science. 2 (13):1-12. Ellis, N. et al (2010) Marketing: A Critical Textbook. London: Sage. Arvisdsson, A. (2006) Brands: Meaning and Value in Media Culture. London: Routledge. Brownlie, D. et al. (1999) Rethinking Marketing: Towards Critical Marketing Accountings. London: Sage. Bob, C. (2005) The Marketing of Rebellion. Cambridge: Cambridge University Press. Brown, S. (2001) Marketing: The Retro Revolution. London: Sage. Earls, M. (2002) Welcome to the Creative Age: Bananas, Business, and the Death of Marketing. Chichester: John Wiley & Sons. Gabriel, Y. and Lang, T. (1995) The Unmanageable Consumer. London: Sage. Goddard, A. (1998) The Language of Advertising: Written Texts. London: Routledge. Harrison, R. et al. (2005) The Ethical Consumer. London: Sage. Klein, N. (2001) No Logo. London: Flamingo. Lee, O., (2001) Internet marketing research: theory and practice. Hershey, Pa.: Idea Group Pub, Ferrell, O. and Hartline, M., (2011) Marketing strategy. Australia; Mason, Ohio: South-Western Cengage Learning, Rao, P. and Klein, J., (2013) Strategies for high-tech firms: marketing, economic, and legal approaches. Armonk, N.Y.: M.E. Sharpe, Weitz, B. and Wensley, R. (2006) Handbook of marketing. London: SAGE, Read More

 

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