Market Response to a Major Policy Change in the Marketing Mix - Essay Example

Introduction to Marketing Contents Introduction to Marketing Contents 2 LO1 3 LO2 5 LO3 6 LO4 7 LO1 The relevance of marketing in the business world in many senses is synonymous with success. In the corporate world of today, in 2014 creating a successful organization faces many challenges. These challenges often affect the organizations` bottom line and also their longevity. Even industries which have an international recognizance and standard operating procedures struggle d to maintain their status in market. Marketing is an important component for the prosperity of any organization. Some of the popular marketing strategies are getting new clients, branding, modifying and influencing customer behavior and buying decisions. All of such strategies are used to increase sales of products and services. Marketing has a lot of definitions. One of them defines marketing in a way such that it relates marketing to the way society promotes spending on particular products and services. Marketing generally targets a specific consumer segment depending on the type of merchandise or service. It is very important for marketing initiatives to focus on customer needs and wants of the specific target audiences. Marketing is such a topic that covers a wide range of aspects, which includes advertises, public relations, sales, and product promotions. Many people confuse sales with marketing, when the truth is the two are a lot different from each other. Sales involves activities which aim at getting a product or service into a market, promoting the product, influencing the behavior of consumers, and influencing the consumer buying behavior. The actual function of a Sales division is to transfer the ownership of the products or services from the produces to the customers. The marketing and financial results of the companies depend on a number of interrelated internal and external factors. The analysis of these factors has been a constant concern for academicians and practitioners. The very complexity of this subject requires indulging into more narrow aspects of research of the issue. One of the many possibilities is that while seeing through the glass of marketing initiatives of a company, while assuming that such possibilities predetermine any contact between the company and the target market. These initiatives significantly influence overall growth and success of the company. However, the span of marketing initiatives as well as their influences are extremely wide and can hardly be analyzed at once as a single entity. One way to cover logically a part of such a broad picture is through analysis of the marketing division in terms of its importance to the organization from the viewpoint of the top management of the companies. Evaluating the marketing division is important as a complete function and also as separate units, differentiated by its more sub-divided and narrowly explained activities, looks like the relevant methodology to understand the typical stereotypes in the management arena and linking them to the results (out-puts) of the activities carried out by the companies. To understand the strategic as well as the managerial views of marketing activities, the managerial perspective will have to be integrated into the picture. Webster points out that through strengthening the managerial structure of marketing companies can achieve significant profits in terms of business performance when critical marketing in every area of the strategy formulation process is taken into consideration. While firms where marketing division does not contribute much to strategy formation (Morgan, 2000) suffer losses. In other words, financial as well as overall results of the company are far better, when top management understands the relevance and role of marketing in a company. It is more important in the case of changes, as the roles and importance of marketing is constantly transforming (Fox, 2003) Thorpe Park is also a service organization which relies heavily on the marketing function. Designing the product and service offerings of the theme park based on their marketing capabilities is a way it can improve its value proposition as well as better its general organizational results (Saunders M. N., Saunders M., Lewis and Thornhill, 2011). Thorpe Park has designed exclusive entertainment packages for its target segment which consists of mid teens, singletons and families with children more than 1o years of age. The packages are so designed to thrill customers out of their chairs. The marketing is generally done through visual advertisements in television and through the social media. Thorpe Park banks heavily on word of mouth marketing (Thorpe Park, 2014a). LO2 Market Research is collection and analysis of information that can revel important and significant facts about customers, the target market segment or competitors which can be leveraged to achieve the aspired goals by an organization. There are many ways to gather information from largely two types of sources, primary and secondary sources. There are different kinds of information that can be gathered mainly quantitative and qualitative types of information (Malhotra, Birks, Palmer and Koenig-Lewis, 2003). Generally organizations use some combination of these research types to arrive at a conclusions through the results obtained through these approaches. On the basis of the way the information is gathered there are two types of researches, Primary research and secondary research. Primary research also known as field research is a type of research in which one gathers original information directly from the sources or the purpose, and not from published sources. Primary research consists of surveys, direct observations, focused group discussions and interviews which are organized and conducted through market research professionals. Primary research provides the control on the kind of questions to be asked and the type of information has to be gathered (Healy and Perry, 2000). Primary research ultimate results are extremely valuable; but, they are much more time consuming and costly than secondary research. The primary research can be used after the secondary research has been conducted to determine if the required information has to be gathered from the market or it already exists. Secondary research which is also called desk research is a type of research in which existing information is gathered through already existing sources. Secondary research methods consists of information on the internet about previously conducted market research results, existing information from the customer database of organization, information from official agencies likes industry bodies, libraries and government departments (Stenbacka, 2001). Secondary research helps organizations to understand and gather very interesting information about the target market segment and the market at large. Although, it is a challenge to get the information that is really required but secondary research can be used to get an understanding of the market. The analysis of secondary data is easier than primary data as, in most cases; it may be already analyzed by someone else. Secondary data should be careful used and interpreted as it is in most probability it has been collected for a purpose different from the present requirement or the data may be pertaining to a market segment which is not relevant to the segment for which the data is required. Also if the secondary information is out-of-date, it cannot be used as the market changes very quickly which will affect the ultimate results (Baumgartner and Steenkamp, 2001). The secondary research can also be used to determine factors inside the business and their effects on the business. Thorpe Park can use the secondary research to understand the customer segment it wishes to target. Since a lot of work has already been done on primary data collected from the target segment of Thorpe Park, it can utilize those to determine the factors affecting the consumer decision to visit a theme park. Thorpe Park can then build on those factors to improve the footfall and attract more visitors in the park. Based on the market research, it can also introduce innovative services which will help them increase the customer touch points through which it can improve their bottom line. The secondary market research will be less expensive tan primary market research and also provide all the necessary elements that are required by Thorpe Park to make its marketing initiatives more effective and robust. LO3 The product is the main point around which the marketing strategy is formed. The marketing function understands the product and its significance to the consumer. Thus, marketing division plays an important role in deciding the looks of the product which must be in line to the market needs and wants. It also defines the function for which the product will be used such that they address the requirements of customers, determined by market research. Price is one aspect of marketing mix, which affects sales revenue to the maximum extent (Danaher, Hardie and Putsis, 2001). The price of a product is the most important determinant of the dales revenue. The price should be determined through the understanding of the customers’ perceived value of the product being sold. Understanding the customers opinions about price they are willing to pay for a product is quite important as it indicates the price at which the product should be marked so that the product sells. The pricing policy of an organization can vary with time and circumstances to suit the needs of the consumers and organization. The prices vary widely and change with change in product. Place is related to with methods of transporting the product produced, storing them and then making the products available for the consumers (Yoo, Donthu and Lee, 2000). To get the product to the market in time distribution system has to be healthy. The choice of distribution method will depend on a number of situations. It is convenient for few product producers to sell to wholesalers and then they in turn sell to retailers, whereas others would find it convenient to sell directly to customers. Promotion is the way of communicating of benefits of products or services to customers. It provides information which assists the customers to make a decision about purchase of a product or service. The cost which is associated with the promotion of goods and services do represent a large portion of the total cost of production a product. Successful promotion of products and services increase sales revenue, thus promotional and other expenses are spread over a larger production output. Though increase in promotional activity points towards a response to competitive activity, it helps an organization develop a series of messages which can be quite cost-effective (Ailawadi, Lehmann and Neslin, 2001). The product range of Thorpe Park is a function of the marketing mix. The service proposition of Thorpe Park consists of thrilling rides, annual passes, thrill nights, comfortable stay and merchandise. The range may be widened or a brand can be extended for tactical reasons, like matching competition or catering to seasonal fluctuations. Thus Thorpe Park has to introduce services which cater to the needs of customers or seasonal requirements of the target customer segment. Thorpe Park caters to a niche segment of thrill seekers, who live in the city of London, as it is the perfect getaway from the hustle and bustle of the city. The place of service offering is fixed so it can improve on the connectivity to the location from different parts of London. Each event and service offered should be appropriately priced to attract customers from all income groups. The main revenue generators and cost drivers should be identified and a pricing strategy should be devised to ensure the flow of revenue in times of seasonal fluctuations. The promotional strategy of Thorpe Park at present targets the main customer segment consisting of mid teens, families with children and singletons through national advertisements. An effective on line promotional strategy should be devised through blogs and social media that targets children and family audiences so that they can have s gala time together for an entire day (Thorpe Park, 2014b). LO4 The Product Life Cycle (PLC) is used to define the lifespan of a product or service. There are generally four stages in the life of a product. In the introduction stage in which the product or service is initially promoted. Public awareness is quite important to the success of any product or service. In this stage the stress is laid on promotion of the product. The next stage is growth stage in which the product starts to grow. Huge amount of money is spent on advertising and concentration is on convincing the consumer benefits of the product over competitors products. The next stage is maturity stage in which sales revenue grows at a fast rate and then gradually stabilizes. The main activity in this stage is differentiating the products from the similar products which are being offered by competitors. The maturity stage leads to the decline stage in which sales of the product begins to fall. The product is either outlived its lifetime or new innovative products have replaced the product. Thorpe Park is in the growth phase as its sales revenue is steadily growing thus more expenditure should be targeted at promotional activities to maximize revenues. (Source: Northern Kentucky University, n.d.) PESTLE strategy consists of six factors which include the political, environmental and social factors in which the product or services are being offered. These factors affect the production of goods and services. The other factors include technology factors, which affects the products once there is change in technology in the marketplace; Legal factors, which affect the products produced through rules and laws created by the government and economic factors, which influence the buying power of the customers (Simkin and Dibb, 2012). The political and social factors favor Thorpe Park as the major political of wave of “Buying British” catches up and greater stress being laid on giving children actual thrilling experiences rather than let them have it online. Due to recessive moods in the economic scenario the revenues of Thorpe Park can suffer a bit but through newer technology and newer thrills Thorpe Park can provide greater value to its customers. BCG matrix is a marketing tool to define the position of a product and service through which marketing strategy can be designed (Smith, 2002). (Source: Northern Kentucky University, n.d.) Thorpe Park is in the growth phase as its sales revenue is steadily growing. The sales revenue and visitors to the park has been steadily rising each year suggesting that it is in the underdog phase of the BCG matrix as its market growth is high but market share is low (Thorpe Park, 2014c). Thus the best marketing strategy for Thorpe Park is to invest in advertising and promotional activities and increase its sales revenue. Reference List Ailawadi, K. L., Lehmann, D. R. and Neslin, S. A., 2001. Market response to a major policy change in the marketing mix: Learning from Procter & Gamble’s value pricing strategy. Journal of Marketing, 65(1), pp. 44-61. Baumgartner, H. and Steenkamp, J. B. E., 2001. Response styles in marketing research: A cross-national investigation. Journal of Marketing Research, 38(2), pp. 143-156. Danaher, P. J., Hardie, B. G. and Putsis Jr, W. P., 2001. 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(2000). An examination of selected marketing mix elements and brand equity. Journal of the Academy of Marketing Science, 28(2), pp. 195-211. Read More