Major Issues on the Purpose of Business - Essay Example

Exam Question The phrase ‘the purpose of business is to create and keep a broadly conforms to fundamental goals of business of ensuring customer satisfaction. Companies encounter decisions which involve deciding which consumers have a positive customer lifetime value and are therefore most commendable for venture (Levitt, 2006). Businesses do so by producing goods and services that meet the requirements of people or the customers. Thus, customers or consumers become the mainstay of business (McKenna, 1991). Research indicates that customers are the principal basis of future income. Since consumers are influential growth-producing investments, it becomes more imperative to change them to true patriotic fans (McKenna, 1991). This emphasizes the significance of marketing to gratify consumers and even please them and not just acquiring them. Arguably, research indicates that customer satisfaction leads to customer retention, increased future incomes and future promotion attributable to affirmative word-of-mouth (Vandermerwe, 2004). For this reason, organizations can create and retain customers through customer satisfaction. The organization can attain customer satisfaction be through a great customer emotional experience (Vandermerwe, 2004). Question 2 A powerful product branding makes a product stand out. It is the product brand that assists the product to weigh down the other products in the market (Mullins & Walker, 2009). Saxonville Sausages is a prime example of how effective branding and market entry strategies allowed it to position its products in the market (Moore, 2007). They had targeted family and homemakers who relished home cooked food. The advertisements showed women using Saxonville sausages to make different dishes and enjoying it with family (Moore, 2007). Thus it was able to create a niche market position. Through right positioning, it was able to revive its declining profits (Mullins & Walker, 2009). Mountain Man brewery case, on the other hand emphasizes the need for new product to meet the challenges of time (Abelli, 2007). Mountain Man is an established brand of lager with regional specialty that primarily caters to the niche market of coal miners. Its brand equity is associated with long history of coal mining and has a loyal customer base which now is elderly populace (Abelli, 2007). The new light beer would meet the tastes of young generation but fears that it could threaten its brand equity (Abelli, 2007). But this is a risk which the firm must take to maintain its competitive advantage in the industry. Question 3 Market research is intrinsic part of business strategy that is used to identify and analyze changing customers’ requirements which the firms meet through new product development or value addition (Vandermerwe, 2004; McKenna, 1991). This process involves defining the problem or need, identifying who will carry out the research, identifying the appropriate methods, gathering the data, analyzing and presenting it (McKenna, 1991). Surveys of buying behavior through in-depth interviews and American fact finder are important tools for qualitative and quantitative analysis that help identify the changing trend of the consumers and competitors (Vandermerwe, 2004). For example, qualitative study through in-depth interviews would show that coke is a favorite drink but diet coke is preferred more because of its low calorie. On the other hand, quantitative research would indicate that coke is more popular than Pepsi. The qualitative tools are used to reveal people’s feelings about an issue while qualitative tools are used when there is a need to produce significant metrics that describe the magnitude of a reaction (McKenna, 1991). In-depth interviews are most appropriate when there is a need for comprehensive information, probe of susceptible issues, and when there is a need to spawn ideas (Vandermerwe, 2004). On the other hand, American fact finder will be used appropriately when there are desires to measure many variables and where presentation of illustrations is required (McKenna, 1991). The in-depth interviews provide first hand information that is not quantifiable while American fact finder will provide quantifiable secondary information researched by someone else (Vandermerwe, 2004). Various firms like Red Bull, Reebok, and Nike have used market research to identify their requirement that was used for new product development. Red Bull and Nike employed the use of focus groups and self administered mail surveys while Reebok employed the use of mini groups and telephone interviews. The focus groups assisted with generating ideas on how the new products can be brought into the market while the mail surveys assisted in knowing the preferences of the consumers and the number of consumers who prefer a certain brand (McKenna, 1991). This assisted in identifying the type of consumers and their tastes. The mini groups used by Reebok also generated ideas on how the company can improve on its products to suit the needs of the consumers (McKenna, 1991). On the other hand, the telephone interviews provided the company with insightful information on how much a customer is willing to spend on foot and sportswear. These researches seem to have yielded useful information on how to bring new products into the market (McKenna, 1991). However, all the companies used a limited sample which makes the information obtained not so reliable (Vandermerwe, 2004). The companies should have used different consumers from parts of the world or nation to obtain information. On the other hand, the telephone interviews and the self administered mail surveys are prone to bias. For this reason, the information obtained by Nike, Reebok and Red Bull may have been biased (McKenna, 1991). Question 4 One of the most significant decisions for an organization to make is to select its consumers or market that it can effectively serve. The firm should decide whether it can serve the whole market against strong competitors before venturing into the market (Yankelovich, & Meer, 2006). If the company does not enough resources to satisfy the whole market, it can best serve better than its competitors by dividing the market into parts. In reference to Yankelovich and Meer (2006), market segmentation refers to a process of splitting a market into groups of customers who have analogous requirements for a service or product offering. On the other hand, target marketing refers process of deciding which segment to pursue. Yankelovich and Meer, (2006) note that product positioning refers to the creation of an image or perception of the product by consumers in a selected target market. The process of segmentation, positioning and targeting is an extremely vital attribute of the promotional mix (Mullins & Walker, 2009). They are intertwined to work effectively together. After a marketer decides on the consumer group within the market segments, he or she has to decide on how to present the products to the target audience (Mullins & Walker, 2009). Red Bull has judiciously exploited market mix to address the needs of their customers who are the health conscious and sports-loving youth loving. It has been major sponsors of college events and uses popular sportsmen to advertise its products. References Abelli, H. (2007, May 28). Mountain Man Brewing Co.: Bringing the Brand to Light. Harvard Business Review. Retrieved October 2012, from http://hbr.org/product/mountain-man-brewing-co-bringing-the-brand-to-ligh/an/2069-PDF-ENG Moore, K. (2007). Saxonville Sausage. Harvard Business Review. Retrieved October 2012, from http://hbr.org/product/saxonville-sausage/an/2085-PDF-ENG Levitt, T. (2006). What business are you in? Harvard Business Review, 84(10), 126-137. McKenna, R. (1991). Marketing is Everything. Harvard Business Review. Mullins, J.W., & Walker, O. C. (2009). Marketing Management (7th ed.) NY: McGraw Hills. Vandermerwe, S. (2004). Achieving Deep Customer Focus. MIT Sloan Management Review, 1 April 2004. http://sloanreview.mit.edu/the-magazine/2004-spring/45307/achieving-deep- customer-focus/ 16 October 2012. Yankelovich, D. & Meer, D. (2006). Rediscovering market segmentation. Harvard Business Review. Read More