The Main Characteristics of a Marketing-Oriented Organization - Assignment Example

The Main Characteristics of a Marketing-Oriented Organization 1a. Compare alternative definitions of marketing. You should use the key words from the definitions to formulate your own definition. Marketing as defined by different sources; 'The management process responsible for identifying, anticipating and satisfying customer requirements profitably'- The Chartered Institute of Marketing 'Satisfying needs and wants through an exchange process'-Philip Kotler ‘Marketing is a social and managerial process by which individuals and groups obtain what they want and need through creating, offering and exchanging products of value with others’-Kotler 1991 So conclusively marketing can be defined as a core management process which creates and indentifies the needs and wants of the customers and results in a mutually beneficial relationship in which the customer’s needs are fulfilled and the company earns its profits. Key words of the definition: Management Process: Marketing as a process is a function of the whole management, it requires planning, coordinating and implementing of its own which can only be done with competent managers and staff. Create: Marketers are always striving to create. They create new products and new approached to convey the information to the target market. The process of marketing is ubiquitous. Indentify: Marketing involves to amply identifying the needs of the customers. The efforts involved in gaining knowledge about customers, competition and market status also comes under identifying. Beneficial relationship: The end result of marketing should be beneficial to both the customer and the company. In this relationship the need of the customer is fulfilled while the goal of the marketer is also achieved which is to gain profit. 1b. identify the main characteristics of a marketing oriented organization and explain if you think Virgin exhibit these characteristics. The Characteristics of Marketing Oriented organization: The organizations which pursue a marketing oriented strategy basically put all their focus and efforts in catering exactly to the customer’s needs. A marketing oriented company is driven by the altering needs of the market. Such organization enjoys a very intimate and close relationship with their target market in order to fully comprehend the needs and demands of the market. According to Peters and Waterman (2004), following are the characteristics of marketing oriented companies. 1. Knowing their customer well: Profound understanding of the changing needs of the customers and taking in to consideration those needs. 2. Valuing the internal customers (employees): Marketing oriented companies increases their productivity through people including the employees. 3. A drive to act: The marketing oriented companies are driven to act. They are adaptable and flexible to cater to the needs of their customers. 4. Value driven: They strive to provide the customers with the products and services that are incongruent with their needs. 5. Facilitation of face to face contact: The customer interaction is made comfortable through the front line employees. The success of Virgin as a brand can be associated with its adoption of market oriented strategy. The market oriented approach of Virgin group is evident from the belief of its founder Sir Richard Branson who states that ‘in principle there were no product or service boundaries limiting a brand name, provided it was associated with quality products/services on offer’. Knowing their customer well: The various ventures of Virgin Group have been carried out after considerable research and analysis and post taking the customer point of view. A drive to act: The Virgin Group has diversified in many other industries including entertainment, travel and lifestyle. They amply cater to their relative market in all these arenas. Their drive to act and succeed is in fact the basis for their market oriented approach. Valuing the internal customers: The decentralized management of Virgin group is testament of its market oriented approach. Virgin allows the managers to amply assess the needs of the customers and then bring forth the desired products. 1c) Compare the selling concept with the marketing concept- which one best describes Virgin? According to the selling concept, a firm should work to make profits and put all its focus and efforts in making a sale while the marketing concept holds that the firm should first identify the needs and wants of the market and then plan an appropriate marketing mix that fulfills the specifications of the customers. So the two major distinctions between the selling concept and marketing concept is that; The selling concepts cater to the needs of the seller while the marketing concepts take in to account the needs of the buyer. In sales concept the product is converted in to cash while in marketing concept the product is seen as an ultimate solution to the customer’s problems (Hodgetts 2002). The virgin is making use of the marketing concept. The corporate strategy of virgin in the Virgin Charter highlights its inclination towards the marketing concept. The sub brands of Virgin are all working as autonomous enterprises under the umbrella of the brand name Virgin. The decentralized nature of the brand makes it makes the decision making easier and more in favor of the customers. As opposed to the centralized organizations where the top management’s focus on making profit translates into pursue of selling concept by the managers, the decentralized nature of the Virgin allows the managers to amply assess the needs of the customers and then bring forth the desired products. 1d) Identify and assess the benefits and costs of implementing a marketing approach to Virgin. The adoption of marketing approach has led the Virgin brand to the heights of success. Virgin group succeeded in holding leadership position in many markets e.g. airline industry by amply catering to the needs and demands of the customers. The consistent growth and profits of the Virgin group can be attributed to its marketing approach. Among other benefits that Virgin Group enjoyed due to its marketing approach are its profitable and loyal customers. The regular marketing research associated with the marketing approach revealed that the airline venture of Virgin Group in Australia lacks in some crucial key areas. It was found that the in flight food was not up to mark and the flights were rated to be considerably boring. The Virgin blue at once launched its no frills and discounted airline which ultimately resulted in happier, more satisfied and loyal clientele. In the same manner the Virgin Mobile delivered 15% growth in active customer numbers to 4,153,400 up from 3,603,700 during the year 2005 (Interim Report 2005). The Virgin mobile was also awarded with the most superior customer satisfaction rate in 2005 by the JD Power and Associates survey for 2005 (Interim Report 2005). Source: (Manning & Salter 2008) The marketing approach comes with some costs; the decline in the service gross margin to 59.4% from 62.2% in year 2008 of Virgin can be attributed to its concentration on the marketing research and setting up of marketing focus structure and initiating and building outstanding services that comes with the marketing approach (Interim Report, 2005). The other costs of opting for a marketing approach for Virgin has been regular marketing research, and the setting up of a separate Information technology department. 2a) Identify and explain the relevance of 2 macro and 1 micro environmental factor to marketing undertaken by Virgin. Source: (Porter et al. 2006) Micro environmental Factor; Employees: The various principles of HRM are used to manage the work force of Virgin. The 25,000 diversified employees in all the Virgin’s outlets worldwide are reflection of the fact that Virgin Group has a liberal and modern approach towards its workforce (Interim Report 2005).The internal communication undertaken by the employees work to advertise and market their respective products and services as well. The intranet, buzz videos and the annual parties are testament of the marketing activities undertaking within the organization. Additionally the front line employees and the customer service department through their loyalty to the organization and training work to increase the customer satisfaction and loyalty which ultimately translates in to financial growth and profits. The satisfied customers of the Virgin Group have been able to build long term relationship of the organization with its customers. Macro Environment Factor; Economy and Culture: The recent global downturn of economy affected the Virgin Group too. The outsourcing and the cost cutting brought down the marketing efforts consequently. The lack of commitment and the loyalty on the part of the staff was also attributed to the economic uncertainty. The investment and the customer acquisition were also halted for the time being due to several redundancies post the economic downturn. The Virgin group has its operation in US, Europe, Africa, Australia, Caribbean, Asia, and Middle East which can be a base for many cultural conflicts and issues. The customer experience has been compromised because of the cultural conflict. The marketing approaches and techniques undertaken in these diversified market are also different from each other and are incongruent to the requirement of the host culture in which the virgin Group is operating. 2b) Select two (2) Virgin products / services offered to different markets. Propose and explain how Virgin could use appropriate segmentation criteria. Segmentation: Segmentation is done to help the marketers focus more on individual sets of markets. These segments are mostly comprised of people who are more likely to buy the offerings (Baker 2004). 1. Virgin Atlantic Airlines: The segmentation for Atlantic Airlines can be done according to the classes and ranking in the status. One segment can be of the business class who are mostly male and aged over 35. They are highly paid and run and work in renounced organization. Another segment that exists for Atlantic Airlines is the premium economy passengers are travelers for both business and leisure. They are also mostly male with an average age of 41 (David 2001). The third segment is the passengers who prefer economy are from all social class and the ratio of male and female is equal. 2. Virgin Mobile (India) The segmentation for the mobile users of India is very difficult because the market is very diverse and characteristic of the market over lap. The mobile subscribers are over 250 million with enormous additions every month (Sinha 2008). They can be segmented by making the age criteria. The first group is the mobile users can be between the ages of 18-35. Another segment can be of business class. 2c) State the target market you would choose for these products and explain why you think this target market would be attractive to Virgin. 1. Virgin Atlantic Airlines: The target market of the Virgin Atlantic airline is primarily the business class. The airline can work to gain market share in the business class by marketing their core values “quality, fun, innovative, honest, and caring” to the target market. This particular market would be chosen because they pay premium prices. 2. Virgin Mobile (India) The virgin Mobile brand can target the youth because they form the 215million people in this age group. The reason this specific segment was chosen because the growth rate in this segment is also predicted to be very high with 50 million new subscribers in the next three years. Another reason is that the youth contribute to the 50% of the revenues generated by a mobile company. This number is expected to rise. 2d) For a Virgin product / service outline two (2) different buying situations and explain how Virgin takes account of buyer behavior in each situation. Buying Behavior: Buying behavior is basically the decision making act which involves buying and utility of the final product. Source: (Lee & Garrow 2008) E-commerce of Virgin Atlantic Airline: The Virgin Group has evolved to take in to account the changing needs of people even when it comes to the buying behavior. Different businesses are offering different products and services for all the consumers online at any point. It has been recognized as the most important source of direct marketing (Ko et al. 2004). Like many other businesses that have opened their sales online, Virgin group also sells its tickets online on its official website. The virgin group times recognized the consumer’s inclination to shop online. The buyers who prefer to shop for their air tickets online are usually professionals who do not have the time to engage in the hassle of going to a travel agent. The virgin mobile amply caters to this particular characteristic of the buyers who shop online by making sure that their online experience is easy, timely and comfortable. The professional interface of the airline website and their easy transaction through most of the major sources only add to the ace of the online shoppers (Ycine 2002). Direct Buying of Virgin Mobile India: The Virgin mobiles made its presence felt in India in 2008 with its products and services made available in over 15,000 outlets initially. In order to enhance the customer experience in India, Virgin Mobile has separate priority relationship managers. Additionally the sales and distribution officers fully comprehend the inherently dynamic and diverse local market. 3a) Analyze how Virgin gains competitive advantage through their products: Competitive Advantage: The competitive advantage is the ability of a company to produce the products and services in such a manner that it out stands the competition. The values on which the brand Virgin operates includes; value for money, outstanding customer service, innovative, challenging and fun makes the brand stand out from its competition. The sub brand of Virgin, Virgin Atlantic Airways has made its low prices its competitive edge. It provides its business class with luxuries that are not offered in any other airline which ranges from on air hair stylist to in flight massages. Even if these features were quickly picked up by other industry rivals, the Virgin Atlantic Airways was always associated with them. There are many other competitive advantages of Virgin group that has set it at par from its competitors. In addition to the reputation of Virgin group as a leader in its relative industry, the partners and the Virgin’s management style are the attributes which have given it an extra edge. The Virgin group has strengthened its name with consistent delivery of quality and made a name in the industry. 3b) critically evaluate the distribution (place) strategy used by Virgin for their products. Suggest ways in which it could be improved. The products and services of Virgin have been amply places where they are accessible and readily available for the target market. The strategic alliance and the joint ventures of Virgin group have only helped in this regard. The virgin group with its partnership has enjoyed more mature channels of distributions. It has also greatly helped in the marketing of the Virgin product and services in the appropriate markets. The coverage of the Atlantic Airlines was greatly increased after its partnership with Singapore Airlines. It started to offer more destination spots to its customers at better prices. Similarly another sub brand of Virgin group; Virgin Money Australia formed an alliance with Citibank Australia and succeeded in coming up with more banking products and services and thus increasing its distribution (Virginmoney 2009). These strategic alliances and partnerships amongst others have greatly increased the coverage of Virgin Group and it has enabled it to reach out to more markets with minimum investments (Reeves & Deimler 2009). These channels have worked fine for Virgin. However, Virgin can work to increase and develop its hold in its various businesses by exploiting more opportunities. One option can be of convergence marketing. It will increase the customer base because of various value added services associated with it. 3c) Explain how the prices set by Virgin reflect their objectives and market conditions. The pricing strategies of Virgin group are based on various trends in the market place. One such trend is premium-tization in which the consumers pay premier prices for the exclusive service and high perceived quality. Simultaneously the virgin Group also offers discounted prices for some of its products and services thus gaining a profound balance. This price strategy has worked well for Virgin group as it has come out as leader in many of the sectors it has ventured in. The objective of Virgin Group to diversify and explore more avenues has been fulfilled as a result of this price strategy. The industries of travel, leisure, entertainment and mobiles have been marked significantly by Virgin group. It has fulfilled its long term goal of establishing itself in most of the world’s major economies. 3d) Comment on the effectiveness of their promotional strategy in helping Virgin to meet their marketing objectives for their products The Virgin Group has kept its customers amply informed about their products and services through various promotional activities they have undertaken. They have made use of TV advertising, direct advertising, offers and promotions, fare discounts, sponsorship, event, partner liaison, public relations, database marketing amongst many other additional channels of communication. The fact that the Virgin Group is leading firm in its respective industries is testament of the success of the marketing and promotion. The shareholder value has been increased for the shareholders through numerous sub brands of virgin. The active venture capital can be predicted to be keep growing. These promotion strategies can be for a large degree credited to provide the shareholder with ample return on their investment. 3e. Outline how the additional elements of the extended marketing mix (People. Process, Physical Evidence) could be applied to Virgin. The people/human resource of the Virgin group has proven to be a great asset. They have played a major role in achieving and sustaining the business success. The principles of HRM have been utilized by Virgin’s management. All the process of selection, recruiting, training, rewards and motivation have made the company liberal and modern and set its foundation for success. Additionally the front line employees and the customer service department through their loyalty to the organization and training work to increase the customer satisfaction and loyalty which ultimately translates in to financial growth and profits. The physical attributes of Virgin Group e.g. its web pages, brochures and furnishings have also been up to mark. The buildings and scenic headquarters of Virgin Group reflect its international standards and reputation as a competitive firm. 4a) Choose one (1) Virgin PRODUCT and devise two (2) marketing mixes for the product. Start your analysis by outlining two different market segments that the product is aimed at and devise a marketing mix for each market. The marketing mix includes the product, price, place and promotion which can be used for devising a marketing strategy. The following are two marketing mixes for two different segments; the Virgin Atlantic caters to i.e. Upper Class and Economy. Marketing Mix for Segment # 1 Upper Class: Product: The flight service for the upper class would include; A limo ride to and from the Airport In flight salon Wide array of cuisine options Bar at disposal 11” TV screen Comfortable sleeping space Sleeping Accessories Promotion: The publicized promotional activities for the upper class would include the flying club which would also encourage loyalty in customers. The club house access and other benefits would be given to the members. Promotion would also be done through celebrities who flew from the Airline and had a wonderful experience. Additionally internet marketing would also be made use of. Price: The price for the upper class ticket is around $9,000 dollars. Place: The tickets can be bought from designated travel agents or bought online. The marketing Mix for Segment # 2 Economy: Product: The flight service for the Economy Class would include; Personal Video Screen with access to movies, music and games 3 options of meals Free Ice cream and beverages during the flight Price: Economy tickets are currently priced at $500.00 dollars Promotion: The Virgin Atlantic Airlines would make use of various marketing techniques for its promotion. It would include; TV, press, magazines, brochures. Additionally the Airline would also be promoted through poster on the taxi and bus sides. New routes and destination would be amply communicated to the target market. Place: Virgin Atlantic would sell tickets primarily through the Internet, travel agents, and direct communication with customers. Explain the differences in marketing products and services to organizations rather than to consumers. The marketing efforts that are used to sell to industrial organization and businesses are considerably different than that of regular customers. It is relatively easier to sell to intermediate buyers rather than whole organization because their needs are more eloquent and specific and decision making is dependent on a single entity. They are also not very price sensitive and are more open to ideas. This is not the case with the industrial customers. They require a multi-step process in which the final decision is to be made after consideration of many parties (Lamb, Hair & McDaniel, 2002). They are more price sensitive and cautious buyers since their purchase is usually in bulk and have more financial and functional risks associated with it. Explain how and why international marketing differs from domestic marketing for Virgin. The international marketing considerably differs than domestic marketing for Virgin. The international marketing differs from domestic marketing for Virgin because Virgin Group has taken to cater, market and advertise to a very diverse groups worldwide. The needs, perceptions and thinking of these groups are very difficult and at times contradictory to each other. The Virgin Group while marketing in the domestic market makes necessary changes in the packaging, functional features, standards and regulation. In the same manner before marketing internationally it takes in to account the many factors including; competitors, reputation of their brand and their capability to alter and devise effective strategies that would work internationally (Bennett & Blythe 2002). References: Baker, M (2004), ‘Marketing: Critical Perspective in Business and Management V4’ London; Routledge. Bennett, R & Blythe, J (2002), 'International marketing: strategy planning, market entry & implementation'. London: Kogan Page Publishers Hodgetts, R (2002). Management: Theory, Process and Practice. Philadelphia: W.B. 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