Marketing Principles for Business - Essay Example

Marketing Principles for Business Market is a place consisting of different people organizations having different needs and wants and they possess the ability and willingness to purchase goods or services to satisfy their needs. A group of people in market sharing similar characteristics of purchasing the same products to satisfy their needs is called market segment. Is the marketing bugging salesperson on the doorstep, attractiveness of the package, or is the free gift that tempts an individual to make a purchase? Philip Kotler points out that one of the biggest problems faced by the companies today is that they produce far more goods than customers can buy. Excessive production as well as many number of players leads to hyper competition that ultimately leads to price wars. (Kotler, 2003). According to Kotler, marketing is too often confused with selling. But marketing is not just selling, and price is not the only factor for competition. According to Peter Drucker, the aim of marketing is to make selling superfluous. This essentially means that marketers do not have to do much of selling, if they are able to identify unconvinced requirements of customers and satisfy them (Drucker 1990). The term marketing refers to orders specifying the designs of the product and its features. It also generates passing on production requirements and catering to the needs of the market by involvement of planning, organizing, developing, controlling the marketing functions including advertising and brand building. (Brassington & Pettitt, 2006) Administration, finance, human resource, etc are staff functions and a company can afford to outsource them. But, it can prosper only through its marketing offerings and line ideas. Companies have realized the requirement to provide good customer service. However, increasing competitive pressures have forced companies to reduce their costs, which have had a negative impact on the levels of customer services. However, companies have to realize that customers now have many options to choose from. If a customer is not satisfied with a company’s product or service, he or she can immediately switch to a competitor. This leads to not only the loss of sales but also the loss of customer lifetime value. The cost of loosing a customer can be quantified as 95% and it will be very difficult to build up marketing efficiencies. It is also necessary to create value, customer loyalty and satisfaction that would be more relevant and recommended for profitability as well as deriving economic value added including opportunity value added. The process of dividing a market in to a number of sub markets is called as market segmentation. Each segment of a market is differentiated by the requirements, purchasing behavior and features of consumers among the segments, but would be same within each segment. Market segmentation helps the marketers to form a target market as each segment has homogenous features within it. Segmentation also helps the marketers to identify the requirements of the target customers. It is also helpful in making marketing effort more productive and economic (Croft, 1994). Because markets are basically of people, with varying likes and dislikes, tastes and needs. A number of different products and services are required to satisfy these different needs. This is the main reason why it is imperative for marketers to segment the heterogeneous groups in homogenous areas. It is essential for a marketer to identify different consumer groups within a market to enable to choose their preferred target segment. Once the marketer accomplishes this, they can freeze the needs, wants and desires of their target consumers. And they will be able to elicit precise forecasts of the reactions of their consumer group to their proposed offerings. These reactions facilitate the creation and production of the right products and services and to put in place proper channels for distribution and transportation, promotions, pricing and delivery to their customers (Baker, 2000). Consumer market segmentation has been using various, different approaches. Research has been carried to find out how different responses from say laborers, executives and office workers would be to values and attributes in different products. No matter that approach is taken, the marketing plans must fit the different groups of customers and their different needs and wants. On the larger front consumer market segmentation will be broadly based on the following variables such as geographic, demographic, psychographic and behavioral parameters of the process of segmentation (Lamb et al., 2008). Geographic segmentation is done by dividing the market into distinctive entities such as countries, states, counties, cities, districts and localities. Within these segments further segmentation can be done on the basis of climatic conditions, urban or rural areas (Botha et al., 2005). Demographic segmentation takes into consideration the following factors such as age, gender, occupation, education, income, religion, race, family, size, nationality and so on. Marketers show a preference for demographic variables mainly because consumers needs and wants their product and service choices are closely connected to these variables. In addition, evaluation of these variables is also quite easy. These demographic features are helpful in identifying the size of the various segments, which in turn help making the right choices for the media mix. Amongst all the variables, the income, or should it be called purchasing power is the most important. With the availability of cable television marketers are finding it easy to target consumers by gender. One does not have to be a genius to know which television programmers attract male and which attract female viewers. Similarly, with a plethora of choices are becoming more or less automatic and spontaneous. Magazines with high cover price also give marketers clear clues that they cater to the high income and super rich groups as well as their elite (Kurtz et al., 2009). A combination of psychology and demographic variables are used to get to know customers. In psychographic segmentation, the following factors are used to separate customers into separate groups, personally life style, attitude and values. Customers that belong to the same demographic group could possess totally different psychographic features. From the marketers point of view the customers’ life style is the most important variable in psychographic segmentation. The automobile and watch industry have exploited these variable very successfully and happily. Behavioral segmentation separates customers into different groups taking into account the customer’s depth of awareness of the product, their past experience with it and how they personally react to the product. There are as many as five different parts that people could assume in taking final decisions to buy a product or a service. These different parts are the driving of suggestions, a guide, the decision maker, the actual purchaser and finally the customer or end user. As an example let it be reviewed and magnified definition that would create various ideas for the developments that would create the psychological behavior of teenagers suggest Corfu Islands as a holiday destination. Either parent could then gather information on the place, costs of air travel, accommodation, etc. And if they find it suitable either the father or both parents jointly decide to accept the suggestions by approaching various travel companies such as Cox and Kings as well as a clear advice from various other leading travels in the world. The mother could then make all the travel arrangements through a reliable travel agent and the whole family enjoys a vacation on Corfu Islands. This example demonstrates different people contributing to the final decision. Marketers need to bear in mind that all the contributors for market segmentation are very essential (McDonald & Dunbar, 2007). After a company has chosen market segments which show promise, it is time to decide the number of these segments that need to be targeted. Then it selects the actual segments. For segments to be meaningful they should fulfill certain norms such as the size, affluence and characteristics of the segment must be assessable. The area or region should be easily reached. The segment should be big enough for which the company could customize products or services profitably. The segments should represent varying likes and tastes so that they react differently to the advertising and promotion efforts aimed at them. The segment should be responsive to various programs the company runs in it (Gilligan & Wilson, 2009). Product positioning can be simply described as the process of creating a product that would find and fix itself in a specific place in the minds of the target customers. At the same time the company must decide the criterion on which it will base its positioning strategy. Eminent personalities like Jack Trout and Al Ries, and Michael Rotschild are all in agreement that product positioning is the place the product finds in a consumer’s mind according to their perception of the offer, rather than the product itself (Stevens & Loudon 2005). No product line can appeal to everyone. People are different and so are their likes, dislikes, tastes and perceptions as well as their needs and wants, even their feeling and desires. This has led to the necessity of positioning products that would meet the needs of a particular market segment. This positioning strategy will of course include highlighting one or more attributes or values of a product that fulfills the needs of target customers. The features, attributes or values chosen could belong to various categories, something competing products do not possess, meet a particular need or desire in the market or perhaps fill a void that exists in the market. Any one of these or even a combination of them can be selected and used to position the product or offering for a selected target audience. Discerning these attributes or values and using them creatively as a platform to introduce the product, in a nutshell, as the core of product positioning. A product line can be positioned towards the different target groups of prospective customers, such as the rich and famous, only the male gender, teenagers, health sensitive, kids, expecting mothers, and the list is endless (Krafft & Hesse, 2007). A product can be positioned on a number of different attributes, features or values, source of which could be, grandeur, a one of its kind product, something new, something totally different, something affordable or really convenient or perhaps even good value for money. It must be borne in mind that the product positioning strategy is aimed at getting into the customers mind through their perception of the offering. A defective positioning strategy would not only be a disaster but a very expensive one as well. It must be stressed here, that products are often being repositioned at various stages of their life cycle that is quite easy to accomplish. However, repositioning a product that has been faultily positioned is a very difficult task. The progress of a product is making in a particular market segment needs to be continuously tracked to ascertain exactly how the positioning strategy is faring. The actual sales volume achieved in the market will be an indicator of how well it has been received. The marketer needs to determine whether the intention in the positioning strategy actually marching the perceptions or preferences of the customers. At times the projected attributes or values may not meet the target market’s needs and hence the positioning strategy has gone awry. Even if the positioning strategy has achieved its goals at the introductory stage, it still needs to be monitored on a regular basis and any essential repositioning of the product. This should be properly handled during the growth stage of its life cycle for creating a powerful featuring that would augment positive factors for the purposes of beneficial coverage (Johanson, 2008). A product must have a value or attribute that is important, distinct and irresistible, that can be used to position the product properly. The marketer must know for certain the value they are offering and in what manner their customer is getting benefitted. Value added positioning translates into the declaration of the gains and gratification the customer is being offered so that they are attracted and shows a preference for the product line (Patrick, 1997). Once the promise of certain values or benefits is made, the company must ensure that these are delivered to their customer’s complete satisfaction and utility value. The positioning strategy of both the company and its product should be combined in a positioning statement. An example of direct to home satellite services that provide television channels by passing the cable television service provider, could be for discerning customers, direct to home satellite services offer one or two or as many television channels as they need for viewing. Here the company declares it is in the category of television channel providers and then its differentiator pay for what they view unlike cable television where they pay 100% and watch 10% or more percent such as Sony of Japan (Capon, 2009). Conclusion The principles and practice in marketing management would involve an aspect of enchantment that would make aspirations for a lot of thrust on augmentation of revenues. 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