Understanding the Concept and Process of Marketing - Coursework Example

UNDERSTAND THE CONCEPT AND PROCESS OF MARKETING Table of Contents Table of Contents 2 AC 1 3 Marketing 3 Needs and Wants 3 s Value 4 Evolution of Marketing 5 Limitations of the Concept of Marketing 6 AC 1.2 6 SWOT 6 PEST 7 Marketing Objectives 8 Target Market and Marketing Mix 9 Product strategy 9 Pricing Strategy 9 Place Strategy 9 Promotion Strategy 10 Competitive Advantage 10 Importance of Different Marketing Concepts 10 References 12 AC 1.1 Marketing Marketing as a concept or a subject can be defined in a number of different ways. Two of them are discussed below: According to Kotler et al. (2003) marketing is defined as: “Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others”. This is a broad definition of marketing provided by Kotler and includes a marketing concept called value. Hence, marketing is a process of exchanging products as well as value between individuals in order to satisfy their personal needs and wants. According to Chartered Institute of Marketing (CIM) marketing is defined as: “Marketing is the management process which identifies, anticipates and supplies customer requirements efficiently and profitably” (Blythe, 2006, p. 5). The above definition signifies the importance of customer in the marketing process followed by the management of a company. Marketing process actually caters to the needs of only those customers that could be satisfied in a profitable manner. Marketing is thus a management process which includes a wide range of activities starting from the market research to the development of a new product. Customer Needs and Wants Customer needs refer to those products which fall under the category of basic requirements of people and are basically required by them for their survival. The customers mostly buy these products themselves and are not required by the marketers to push them to buy these products. Wants are actually dependent on the needs of the customers and are a step ahead of it. Thus the desire of a customer to have a particular service or product to satisfy the need behind it is defined as the want of a customer. It is necessary for the markets to identify the needs and wants of its customers to have a competitive advantage in the market and be able to provide the services or products to the customers which best suits the needs and wants of the customers. It is necessary to satisfy the specific needs and wants of the customers because it would ultimately help to generate more revenues and achieve the overall mission, vision and objectives of a particular company. Customer’s Value Customer value can be defined as the values gained by him as a result of owning and utilising a particular service or product in excess of how much it had cost to him in the process of acquiring such service or product. Customer satisfaction is dependent on the extent up to which the expectations of the buyer matches with the performance of the product or service as perceived by him. If in any case the product performance does not match or falls below the expectation levels of a customer he becomes dissatisfied with the service or product offered to him. Marketing actually takes place when people takes the decision of satisfying their wants and needs through exchange. Exchange is thus a process through one obtains the desired product from someone and in return offers something back to the person. Thus a company offers its products or services to its customers in exchange of money. However the concept of marketing is changing rapidly and is no longer limited to the exchange process only. Relationship is also vital to the marketing process and the companies are now focussed on relationship marketing which helps to create, maintain and build a strong long term relationship with the stakeholders of the company including its customers (Palmatier, 2008). Evolution of Marketing The concept of marketing has evolved over time and customer is given the highest priority by any business organisation in this modern era. A company which is market oriented keeps the customers at the central position and all its business activities revolve around the customers. It tries to align its marketing strategy with the needs and wants of its customers. Customer orientation is also similar to market orientation wherein the companies are focused to satisfy the wants of the customer and create value for them. Apart from focusing on the customers a company also needs to look into the facts related to how its competitors in the market are able to satisfy all the needs and wants of the customers. The company needs to have knowledge about the strengths and weaknesses of its competitors and look for opportunities to outperform its competitors and have a competitive advantage in the market. Hence an integrated marketing approach would always help a company to perform its business activities in an effective and efficient way. The evolution of marketing can thus be considered to have taken place through five different phases which could be distinctly differentiated from each other. Those five different phases include the era of trading, era of production, era of sales, era of marketing department, and era of marketing company. In the trade era products were produced in limited quantities and the supply was limited. Then in the production era the concept of mass production was introduced. Next when the customer demand started becoming saturated the companies needed to make extra efforts to sell their products. This era can be termed as the sales era. Then when the organisations realised the fact that the sales pattern followed by them did not correspond with the consumer needs, then the need for a separate marketing department was realise. It can thus be named as the marketing department era. Next came the marketing company era when the need of organisations to focus on its customers to achieve its goals was realised. Hence, customer is given the highest priority in any of the marketing activities followed by the organisations. Limitations of the Concept of Marketing One of the major limitations of marketing concept is that proper attention is not given to the suppliers and employees of a company. It is so because the concept of marketing is focused on the satisfaction of needs and wants of the customers of the company In addition to this there are few evidences indicating the advantages of marketing concept applied by the organisations. The organisations might face operational problems in relation to identifying the specific needs and wants of the customers. It is a difficult task for organisations to balance all the demands of competitive stakeholders of the company. AC 1.2 The costs and benefits associated with the marketing orientation of an organisation have been discussed in this section. SWOT SWOT analysis is carried out to assess the internal strengths, weaknesses and external opportunities and threats of a company (Williams, Champion, and Hall, 2011, p.108). The SWOT analysis of Vodafone has been illustrated below: Internal Strengths International presence Huge Brand value Technically up to date products Network infrastructure `Weakness Poor connectivity in some rural areas. Depends on European market Price competition from other mobile network operators External Opportunity Larger geographical access Sound diversification strategy Cellular market expanding at a fast rate Threats Tremendously competitive and saturated market. Emergence of low priced brands. High penetration costs in some of the European markets PEST PEST stands for Political, Economical, Social, and Technological factors. It is an external environmental analysis tool which helps the organisations to determine the external trends. The PEST analysis corresponding to Vodafone Company is discussed below: Political – The political system of United Kingdom is a constitutional monarchy and also a parliamentary system. On the whole the country is very much politically stable. Economical – UK is one of the largest economies around the world. Manufacturing is the most important industrial sector of UK. The other important sectors of UK include agricultural and fishing, tourism and finance. Social – The social factors include trends in demographics such as population size, age, cultural factors and consumer activities. The culture of UK refers to the idiosyncratic cultural norms. UK generally speaks English as the native language. It is characterized by the existence of different types of consumers in the market. Technological – Technological factors include rate of new product development, increase in process automation and other technical infrastructures such as technology inducements, technology transfer, impact of internet and R & D activity. In UK technology is one of the central parts of any business. They make heavy use of technology in almost every sector. Marketing Objectives Marketing objectives of a firm are designed in such a way that ultimately it leads to the attainment of the overall objectives of the business firm. The marketing objectives actually set out path for an organisation towards achieving the marketing activities that are needed to be performed by the company. Some of the marketing objectives of Vodafone include retaining the leadership of the company in the market measured on the basis of revenues earned per customer, customer satisfaction and network quality. The marketing strategy of Vodafone is customer oriented and is focused on carrying on its business activities to satisfy the needs and wants of its customers. Target Market and Marketing Mix Vodafone operates its business activities in different parts of the world and mainly targets the people falling under the category of medium income group. It has a customer base which is diverse in nature and the marketing mix of the company has been designed to satisfy its targeted customers. Marketing mix is also known as the 4p’s of marketing. The elements include product strategy, price strategy, place strategy, and promotion strategy. The marketing mix of Vodafone is illustrated below: Product strategy In the product category the company has voice calling services, messaging services and also the data transfer services. The unique product of the company includes Vodafone live, and special interactive services. Apart from the concept selling the company also has products which are available in the physical form such as data cards, mobile handsets etc. The company has a wide range of cell phones to satisfy the diversified needs of the customers. Pricing Strategy The company has different types of schemes available for its customers to suite their respective needs. In order to have a large base of loyal customers the company offers a broadened structure of prices. Place Strategy The company has its presence in around 30 countries of the world. To be more specific in the context of United Kingdom the company operates through more than 300 stores which are owned by the company itself. Promotion Strategy Vodafone focuses heavily on the promotional segment of the company. In order to promote their product the company uses advertising on TV, magazines, billboards. This helps to spread the communication to a large number of audiences. They also make use of different celebrities to make endorsements. Competitive Advantage As discussed previously, the marketing strategy and the marketing process of Vodafone is customer oriented. This type of marketing process has helped the company to have a competitive advantage in the market because it has resulted in reaching out more people and thereby increasing its customer base significantly. The brand image of the company has improved and has resulted in increasing the revenues earned by the company significantly. Importance of Different Marketing Concepts Different marketing concepts like providing the desired quality of products as sought by the customers, giving priority to customers and their satisfaction, building a strong relationship with customers, etc. helps a company like Vodafone to get benefited in a number of ways. It results in retaining the existing customers and acquiring new customers; ultimately leading to the increase in revenues earned by the company and increases its profitability. It is very important to have a detailed knowledge about the quality of products desired by the customers so that the companies can take the advantage of increasing the customer satisfaction through the implementation of personalised marketing policies. Customer service can be defined as a provision through which companies are able to serve its customers during the process of purchasing the product and also after the purchase. It consists of a series of activities linked together to increase the satisfaction levels of the customers. Relationship marketing is one of the new concepts in marketing strategy followed by different organisations. It implies building a relationship of trust and loyalty with the customers so that they do not switch over to other companies to receive their desired products or services. It thus gives rise to another concept in marketing called customer retention which means preventing the existing customers of an organisation to shift to other company or brand. Retaining the existing customers can help in increasing the revenue generation of a company in a big way and is thus given high priority in the marketing strategies followed by various organisations. Another key marketing concept is customer profitability which means how the customers of a company add to its profitability. It is a metric commonly used by organisations to have an understanding about how its customers are helping to increase its profits. Cost of narrow marketing focus is another important marketing concept which means the marketing strategy followed by the companies is focussed on a specific or narrow market segment. It can be costly for the company in a way that it can result in failure to attract new customers to buy its products and services and it may also result in lost sales for the organisations. References Blythe, J., 2006. Principles & Practice of Marketing. Connecticut: Cengage Learning. Kotler, P., Armstrong, J. Saunders, G., and Wong, V., 2003. Principles of Marketing. Harlow: FT Prentice Hall. Williams, C., Champion, T., and Hall, I., 2011. MGMT. Connecticut: Cengage Learning. Palmatier, R. W., 2008. Relationship Marketing. [pdf] Available at: http://faculty.washington.edu/palmatrw/docs/MSI.RM.Book.pdf [Accessed 27 September 2012]. Read More