The Steps in the Marketing Process - Essay Example

MARKETING al Affiliation) Key words: marketing, utility, rational, cognitive approach, segmentation, targeting Define the term ‘marketing’ and outline the steps in the marketing process. How do micro and macro environmental factors influence these steps? The objective of every company is; to maximize profits. Profits can only be maximized through sales. This is only possible when there is an efficient marketing system in the company. Marketing refers to, “creating awareness on the existence of a product”. It is an important management process, whereby products move from concept to the consumer. Companies are concerned with satisfying the consumer’s needs. Marketing, in a broad sense, involves maximizing the value obtained from customers and building a strong company to consumer relationship. This process is considered successful when all the steps are in full coordination (Ryan, & Jones, 2009). The marketing process involves the following five steps: An evaluation of the marketplace to identify the consumers’ needs and wants. Consumers are rational; that is, they seek for products that will maximize their utility. Marketers need to conduct a market analysis to identify whether the consumer needs can be met through a new product or an advancement of the existing products. After sales services are also considered at this stage. Consumers would be influenced to purchase a product if the marketers offer significant after sales services. After identifying the consumers’ needs and wants, marketers should design a consumer driven strategy. The strategy formulated ought to be in line with the identified customer needs and wants. A comprehensive strategy is one which is formulated in line with the customer needs and wants. Marketers may also decide to segment the customers. This will ensure that similar consumer needs are grouped together for better attention. The third stage involves formulating a marketing mix, which matches the needs of the targeted market. The marketing mix involves; designing a perfect commodity, formulating favourable pricing decisions, distributing the products to the right places, and adopting the right promotional techniques: Products, place, price and promotions (4ps). These components of this stage will dictate the manner in which the company will penetrate the market; in terms of producing a product that matches the needs and wants of every consumer, charging a favourable price and adopting a suitable promotional strategy. A company should ensure that it builds and manages a profitable consumer relationship. Relationship management is an important component of contemporary marketing. This step focuses on gaining customer loyalty. This is only achievable through creating a positive and profitable customer relationship; referred to as, “customer relationship management” (CRM). In the business market, companies create relationships with each other to bring more value to consumers; referred to as, “partnership relationship management” (PRM). The final step involves reaping the ‘fruits’ of success. This step is after the company has been able to capture as many customers as possible, through customer loyalty. The marketing environment is dynamic; tastes and preferences change. Companies should formulate ways to increase their product life cycle. This calls for advancements in the existing products and services. The marketing process is influenced by specific micro and macro environmental factors. The most common micro environmental factors that affect the marketing process is the company’s internal environment, financial capability, management levels and image. The most important aspects of the internal environment are the research and development activities (R&D). Research and development influences how information about the market condition is obtained. Failure to retrieve sufficient marketing information may lead to poor strategies. The company’s financial capability is critical to the implementation stage of the marketing process. The availability or lack of sufficient funds may lead to the success or failure of the process respectively. A company’s image is attributable to its public relations techniques. The public relations techniques is an element of the marketing communication tools. Positive publicity may lead to a successful marketing process, while a negative image may have an adverse effect on this process. Components of the macro environment that affect the marketing process include; the technological advancement, economic, and the political environment. The use of sophisticated equipments to derive sufficient information concerning the market may lead to better strategies. A simulation process can be used to evaluate the success of the implementation process. This model can create a good analysis of the market condition, formulate the appropriate strategies to be adopted, and enhance the implementation process. Laws and regulations influence the marketing process. Some goods, such as cigarettes, are considered to be harmful to the consumers’ health. These regulations set a limit to how companies producing such goods can conduct the marketing process. 4. Explain the difference between a ‘Consumer market’ and ‘Business market’. Give an example of each in your answer. The consumer market involves the purchase of goods, by buyers, for final consumption; not for resale. It is characterized by psychographic, geographic, demographic, and behaviourialistic traits (Richards, 2009). For example, usage rate is a common aspect of the behaviourialistic trait of consumer markets. Basic needs (food) are made readily available to the consumers. Food is an important aspect of survival. Consumers buy food on a daily basis to survive. This is a business to consumer (B to C) transaction. A business market is the practice of corporate businesses facilitating the sale of their commodities to other businesses that in turn resell them. For example, retailers buy commodities from wholesalers. The purpose of this transaction is not for final consumption, but for resale. This is a business to business (B to B) transaction. 6. Explain the concept of buyer behavior and how it affects marketing activities. Buyer behaviour refers to the factors that influence the selection, purchase, consumption, and disposal of a product. This behaviour originates from the urge to satisfy desires. For many years, economists have examined the basis on which buyers make decisions. Their decisions influence the marketing strategies employed by different companies. Companies engage in healthy competition through different marketing communication tools. Each company tries to outdo each other, in terms of having the largest market share. They engage in various marketing activities, which are responsible for ‘selling-out’ the product or service offered. The most prevalent theory of buyer behaviour in respect of marketing activities is the ‘Utility Theory.’ It proposes that; buyers make decisions based on the expected result of their decisions (Bray, 2012). Buyers employ a rational behaviour when choosing commodities to consume; that is, they are concerned with self interest. Marketers are always aware that buyers will only consider the products and services that achieve the highest level of satisfaction. With this knowledge, companies produce products that meet the buyers’ needs. This theory views a buyer as ‘a rational man.’ Companies are influenced by this behaviour to design a product or service that will be desirable to the buyers. Marketing activities tend to focus on research and pricing domain of the product. Buyer behaviour arises from the objective of satisfying a need. This stage advances in information search; on a product that satisfies the need. The buyer then evaluates various alternatives obtained from information search. A purchase intention arises from the evaluation of alternatives. The purchase intention triggers the buyer to buy the product, consumes it, and then disposes it. This is the complete view of buyer behaviour. Marketers are aware that buyer behaviour advances from; a need to the actual transaction. Marketing activities will tend to focus on promoting their products. This promotion creates awareness; that is, it sensitizes the potential buyers about a particular product or service being offered. Buyers tend to apply a cognitive approach when deciding on which products to consume. This approach focuses on the buyers’ observed behaviour to intrapersonal cognition. The experience achieved from the previous use of a product determines its influential role. Most buyers are inclined towards a particular brand. The market place is laden with numerous products. Buyers are selective in terms of the experience achieved from using a particular product or service. They will tend to make their consumption decisions based on a specific brand. Marketers need to conduct public relations as a marketing communication tool. Public relations refer to the creation of positive publicity of a certain product, service or company. A new product may not have buyer preference, since buyers have no previous experience about it. Marketers should employ public relations, to create a positive impression of their product or service. Marketers understand that buyers apply a cognitive approach when selecting goods and services. They tend to apply a marketing strategy that enhances the product publicity. An important aspect of buyer behaviour is based on information searching techniques. The urge to satisfy a need triggers potential buyers to search for sufficient and reliable information. Marketers realize that marketing activities involve the promotion of a product. In the modern world, marketing activities employ a different approach to create awareness and promote a product (Ryan, & Jones, 2009). Potential buyers use the internet to search for information. Sales transactions have shifted from physical to online transactions. Marketing activities have also shifted from direct marketing to online marketing. Companies should focus on the following areas for effective marketing activities; web design, search engine optimization, social media, and content creation and promotion. These areas create a platform for posting relevant information about a product. Buyers appreciate the availability of online information. It saves them time and money. Marketing activities have shifted from direct marketing to online marketing. This shift is attributable to the availability of sufficient and reliable product information. This marketing strategy is readily available and cost-effective. 7. Discuss the process of ‘segmentation’. List and discuss the major bases for segmenting consumer and business markets. The forces of supply and demand have a significant influence on the marketing mix that an entity employs. These forces define the general acceptability of products to different types of consumers. Basic needs are consumed and used for different customers and different reasons. Consumers who have common interests are grouped together. There are other factors which influence the criteria used to group consumers: age, sex, spending power, and buying attitude. The process of splitting a particular market into groups is referred to as ‘segmentation’. Individuals in the same group purchase or react in a similar manner. Segmentation is an important marketing technique, whereby marketers combine prospective buyers into segments. These segments are characterized by common needs and responses. For instance, an athletic footwear company may group long-distance runners and basketball players. These two categories of athletes have a common need; spending power. Athletes have a high spending power, meaning that they will respond to various advertisements. It would be impossible for a company to target the whole market; attributable to cost, time, and effort constraints. The process of segmentation begins with defining a group of prospective buyers, who can be identified and targeted with reasonable cost, time and effort. Once the group is identified, it is evaluated to establish whether it can be targeted with the available resources. A company needs to consider whether the group can respond to marketing actions such as; prices, promos, schemes, and advertisements. If this step is successful, the company should consider whether it will be profitable to sell to the individuals in that group. The final step is; considering whether the value and number of the segment will grow. This final step is an important point of consideration in market segmentation. Companies should consider whether its product will grow in sales and profits, in line with an increase in the number and value of the group. A common challenge that most companies face in market segmentation is; different segments may forward conflicting demands. It can be overcome by evaluating the demands of the different segments and relating them to the company’s strengths. The company may select one or two segments on which to concentrate all of its efforts. This selection process involves collecting information about a particular segment, its prospective performance, the strength of the market competition, and the company’s strength. This selection process is referred to as ‘targeting’. Segmentation is successful if a company can make a specific segment the main target. Business and consumer markets cannot be grouped on the same bases (Richards, 2009). Bases for segmenting the consumer market 1. Geographical variables: The consumer market is partitioned into separate geographical units such as; by population density, by climate, and/or by regions. 2. Demographic segmentation: the market is partitioned into small groups based on variables such as; age, religion, gender, occupation, income, social class, and education. 3. Psychographic segmentation: The consumer market is classified on the basis of personality characteristics, social class, and lifestyle. 4. Behavioural segmentation: The market is partitioned into groups based on consumer knowledge and/or response to a product. Variables in this category include; brand loyalty, user status, and usage rate. Bases for segmenting the business market 1. Company size: Business markets are grouped in terms of their size. Company size variables include; floor space area, annual transactions, and/or market share. 2. Industry: The industry in which a business serves determines its segmentation. Preference lies on industries that produce priority goods (such as agriculture) to industries that produce luxury services (such as tourism). 3. Geographic variables: Businesses that have a high industrial growth rate, a high customer concentration, and/or favourable international macroeconomic factors are grouped together. 4. Purchasing approaches: variables in this category include; the nature of previous relationships, purchasing-function organization, and/or the purchase policies adopted. Despite the different approaches of segmenting consumer and business markets, there are inherent characteristics evident in every segment. Individuals in a particular segment are homogenous (have common needs), distinct (unique from other groups), and respond to the market in a similar way (Lannuzzi, 2013). Reference list Bray, J. 2012. Consumer Behaviour Theory. Approaches and Models, 1, 2-33. Lannuzzi, A. 2013. Market Segmentation Criteria. Five essential criteria, 1, 1-6. Richards, L. 2009. Small businesses. What Are the Basis of Segmenting Consumer Markets?, 1, 1-5. Ryan, D., & Jones, C. 2009. Understanding digital marketing strategies for engaging the digital generation. London: Kogan Page. Read More