The American Marketing Association: Marketing Theory - Term Paper Example

?Marketing Theory Table of Contents I: INTRODUCTION 3 1 Marketing Theory 3 2 Business Idea: Book Store 3 2 Mission and Objectives 4 2.2 Products and Services 4 1.2.3 Suppliers 5 II: MARKET ANALYSIS 5 2.1 Industry Analysis 5 2.2 Market Segmentation 6 2.3 Competitors 6 III: STRATEGY IMPLEMENTATION 7 3.1 Marketing Mix 7 3.2 Competitive Advantage 8 3.3 Use of Technology 8 3.4 Company Lifecycle 9 IV: CONCLUSION AND RECOMMENDATION 10 Work Cited 11 Name of the Student: Name of the Professor: Course: Marketing Theory I: INTRODUCTION 1.1 Marketing Theory According to the American Marketing Association, “Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives” (Calonius 419-428). This definition of marketing forms the core of all marketing theories that has been developed by various authors. It emphasizes on the purpose that marketing has in business or organizations around the world. Keeping in mind the concept of marketing theories and techniques, the establishment and operation of a new business venture would be discussed. The new business venture selected for this study is a book store. 1.2 Business Idea: Book Store The new business idea that has been considered for this study is a book store that would be set in California. The name of the book store would be “Book Worm”. However, setting up a business requires following the marketing theories and utilizing the strategies. In this section of the study, specification related to the new venture has been stated. 1.2.1 Mission and Objectives Book Worm’s mission is to offer quality books at the lowest possible price to the customers in California. The company would additionally allow customers to exchange old books and projects or assignments for their requirement (books, CDs and magazines). In order to attain this mission of the company, the objective of Book Worm would be: To offer hassle free purchase of new as well as second hand books, assignments and magazines at an affordable cost. To offer the students every university books and reading materials those are important to them at least possible price To offer online shopping experience to the customers along with the store To offer home delivery of products ordered within a specific area To attend break even in business within an year of commencing business To generate positive revenue at least after 4-6 months of inception To gain considerable amount of goodwill in comparison to the other competitors in the market (Ahmed 30-43). 1.2.2 Products and Services Book Worm will offer products as well as services. The products will range from text books (new as well as second-hand) for purchase, class notes, text books, audio book CDs on rent, etc. The text books available would include fiction and non-fiction books, subjects like business, physics, accounting, management, marketing, engineering and many more would be available. These products would be available through the store of Book Worm. However, services like information regarding textbooks or class notes for rent or sale, web links for assignments, or solved assignments would be available for sale on the website of Book Worm. Book Worm would be offering a wholesome academic assistance to the students (Barkema and Vermeulen 7-26). 1.2.3 Suppliers Suppliers have a major role to play in the marketing environment because they are one of the integral players in the supply chain. Book Worm would be selecting the book wholesalers in California to avail the books for the customers. The second hand books or old class notes and assignment can be procured from the students, so they will play the role of suppliers in this case. However, as the business grows in terms of size and revenue, Book Worm can also directly procure books from the publishers and their stockists (Belin and Pham 44-50). II: MARKET ANALYSIS This section of the study plays a major role in the discussion of marketing theory because analyzing the industry, segmenting the customers based on the offering and selecting the target customer group is important for any marketer. This will assist the marketer to have an edge over its competitors. 2.1 Industry Analysis The book publishers have been facing a slow down since the last five years. Though, 2013 holds the record of highest student enrolment, yet the demand for textbooks or trade books have not increased with the above records. This is because the sales of e-books have increased by 43 percent in spite of the slowdown. Publishers are expecting that soon 50 percent of the revenue can be generated from sales of e-books alone (Beri 46-69). However, this might pose a threat to the book stores as well as publishing houses, which generate majority of its revenue from the hard copies or physical books. 2.2 Market Segmentation Market Segmentation signifies grouping customers with homogeneous needs and wants. This assists the marketers in identifying their target groups and accordingly they plan the positioning strategy to introduce the business to the market. In this case the customers can be segments depending on their age groups and education level. Customers from age group of 6-17 are in their schools, customers between 18- 25 years old, are in college or university. They might be involved in other distance courses and projects. Even professionals (25-35 years old), study for promotion at work place or for part-time projects. Book Worm would be targeting customers from 18 and above years old as they would be mainly the college and university students, etc. This is because the school students are generally offered books from the schools and they rarely have to avail additional books or study notes from outside (Croft 35-50). 2.3 Competitors The books industry is cluttered with players. The publishers have their own stores, while other wholesale and retail stores are also in adequate amount in every city. California being a hub of education with the most number of colleges and universities has enormous small as well as big book stores. Apart from this, the online book stores such as amazon.com, etc are also the competitors for Book Worm. The most notable competitors of Book Worm in California would be Amicus Books, Dutton’s Books, Lobal Orning, Book Soup, Bart’s Books, Mysterious Galaxy, Vroman’s Bookstore, Acres of Books, etc. These book stores have significant market share in this segment and well established reputation among their customers (David 120-135). III: STRATEGY IMPLEMENTATION 3.1 Marketing Mix Marketing mix is the business tool that assists in determining the appropriate measure of the ingredients required for marketing the products or business in the industry. The four major elements of marketing are product, price, place and promotion. Product: The products as it has been discussed above would be the new as well as second-hand books, assignments and class notes. Apart from this, e-books, online assignment, etc would be also offered. The unique selling proposition of Book Worm would be its offering through both online as well as offline mode. The shop would be able to attract those customers, who are simply looking for fiction or non-fiction books, who might not be the students. The online web links, e-books, audio books, solved assignments or assignment links would be the most attractive segment for the students (Gagnon 125-138). Price: The presence of many competitors in this segment has to be considered and competitive pricing strategy would be most suitable in this case. Book Worm would try to offer occasional discounts on the new books. For the second-hand books, the lowest possible price would be charged considering the competitors’ product price. Similarly, the price of audio books, e-books and assignment s would be lower in comparison to the competitors. In the initial stage of the business, the pull strategy would be incorporated. The customers would be pulled towards Book Worm through attractive price for authentic books and study materials (Newbold 294-304). Place: Book Worm would be located in California, which is among one of the major cities of USA. California homes around 399 universities and colleges of US, which is one of the highest figures among all the other cities or states. New York is in the second position, which is followed by Pennsylvania, Texas and Ohio. This signifies majority of students stay in California, who are the major target group for Book Worm. Promotion: In order to make Book Worm different in the saturated market segment, it has to avail unusual promotional strategies. The company can begin through social media channels, where it can use catchy phrases for promoting assignments, class notes, and books. Pamphlets can be distributed in University and college campus or distributed with newspapers. If the company has adequate funds for promotional purpose, then they can also go for sponsoring university or college events, which will make Book Worm highly popular among students (Walters 709-720). 3.2 Competitive Advantage Competitive advantage was the term first proposed by Michael Porter in 1985. It signifies productive growth through focus towards the marketing strategies. A company gets competitive advantage, when it can develop or acquire attributes that allows the company to outperform from its competitors. In this case, the company can attain competitive edge through lower price of the products, wide selection of offerings, large store and buy back offers. Along with these features, a comfortable shopping environment would be offered to the customers in order to retain them. Apart from this, the availability of online assignments and class notes in a book store like Book Worm would be a feature that most of the book shops are not offering (Croft 70). 3.3 Use of Technology The significance of technology needs to be discussed because it has become one of the major marketing tools in every industry, irrespective of the products or services being sold. The book industry majorly dealt with sales and purchase physical products (hard copies of books or class notes). However, nowadays the sales of ebooks or online assignments have increased rapidly. This may be because of environmental causes, such as reducing the use of paper and wastage. Secondly, due to convenience and longevity, the students as well as the teachers are prone to online books, class notes and assignments. The Web 2.0 platform is interactive and students and teachers can easily interact through internet. This is where Book Worm would be able to find its target customer group and motive them to visit its stores. 3.4 Company Lifecycle In this section of the study the life cycle of the company would be discussed and significant strategies can be proposed as the company moves ahead through the different stages of the life cycle. The company or business life cycle can be seen in Figure 1, stated below. Figure 1: Business/ Company Life Cycle Source: (Author’s Creation) Book Worm now is a start-up firm and it is in its initial stages. The company with the above discussed marketing mix strategies would be able to growth past its initial stage and move towards the growth stage. In the growth stage, the promotional strategies have to be designed in a comprehensive manner and proper fund has to be allocated for that purpose. Book Worm should think of opening more stores for ease of accessibility and for generating more revenue. As the company moves towards its maturity stage, Book Worm can get into strategic alliance with publishers or other firms in order to expand its business and offer better services to customers. The maturity stage is where the business growth becomes stagnant. Book Worm would be slowly move on to its decline phase, however, the owner of the business may choose to exit or diversify. If Book Worm chooses to exit, they the business can be sold at high price or it can also go for diversification to take Book Worm towards a new direction ((Walters 709-720).). IV: CONCLUSION AND RECOMMENDATION The purpose of this study was to discuss the marketing theories with the help of a specific industry or a business. As already discussed, Book Worm is the book store that has been considered in order to analyze its mission and objectives, products and suppliers. The market analysis has been done in order to suggest strategies for implementation. Book Worm is going to venture in a highly competitive environment, so it needs to have ample competitive advantages in order to not only pull customers but also ensure adequate market share in the sector. Work Cited Ahmed, Pervaiz, K. “Culture and Climate for Innovation.” European Journal of Innovation Management, Vol. 1.1(1998): 30 – 43. Print. Barkema, Harry and Freek Vermeulen. “International expansion through start-up or acquisition.” Academy of Management Journal, Vol. 41(1998): 7-26. Print. Belin, Joshua, B. and Chi T. Pham. “Global expansion: Balancing a uniform performance culture with local conditions.” Strategy & Leadership, Vol. 35.6(2007): 44 – 50. Print. Beri, G.C. Marketing Research. New Delhi: Tata McGraw-Hill Education, 2000. Print. Calonius, Henrik. “Contemporary Research in Marketing: A Market Behavior Framework”, Vol. 6. 4 (2006): 419-428. Croft, Mary Jane. Market Segmentation: A Step-By-Step Guide to Profitable New Business. London: Routledge, 2000. Print. David, Fred, R. Strategic management: Cases and concepts (13th ed.). Florence, South Carolina: Pearson, 2011. Print. Gagnon, Stephane. "Resource-based Competition and the New Operations Strategy", International Journal of Operations & Production Management, Vol. 19.2(1999): 125 - 138. Print. Newbold, Tony. “Making Networks Work.” Journal of Communication Management, Vol.4.3 (2002): 294 – 304. Print. Walters, David. "Developing and Implementing Value-Based Strategy", Management Decision, Vol.35.10 (1997): 709 - 720. Print. Read More