Introduction to Marketing Issues - Research Paper Example

Introduction to Marketing – Organic Cornish Heaven Table of contents Introduction 3 2. Overview of the current marketing mix and its importance to the organisation 3 3. Identification and definition of current customers 7 4. Identification of the organization’s current problems and strengths 7 5. Selection and definition of a future target market 7 6. Conclusion 8 7. Recommendations 8 References 9 1. Introduction The identification of markets that can secure high profits is among the key priorities of marketing. However, the achievement of this target is not always easy, especially in highly competitive industries. Current paper focuses on the potential value of a specific framework of marketing, the marketing mix, to help a business operating in the British organic food industry, the Sea View Farm, to improve its performance. The fact that the business owners do not have experience on marketing practices should be taken into consideration when deciding on the marketing strategies that the firm would implement for securing its market position and for setting the basis for growth in the future. It seems that marketing could help the business to increase its performance but only under the terms that all the phases of the relevant plan will be closely monitored. The cooperation with a professional of the marketing industry would increase the chances for the success of the above initiative. 2. Overview of the current marketing mix and its importance to the organisation. In its most common form, the marketing mix includes four elements, also known as ‘four Ps’: product, place, price and promotion. These elements need to be reviewed and evaluated in order to decide on the marketing strategies that would be most appropriate for covering each organization’s needs. Relevant literature should be primarily reviewed. Marketing mix is a framework that has been established for covering specific marketing needs. In fact, these needs seem to be common in businesses in different industries (Doole & Lowe 2008). The marketing mix introduces four criteria that can be used for developing an effective marketing plan (Leadley & Forsyth 2004). One of the key advantages of marketing mix is its standardization (Lamb, Hair & McDaniel 2011). Indeed, firms that decide to use the specific approach need to focus on four elements, as included in the marketing mix, without having the potential to alternate or to replace these elements (Usman et al.2012). Of course, failures when implementing the specific approach are difficult to be fully avoided. In practice, it has been proved that the marketing mix has certain drawbacks, such as: a) the marketing mix is developed according to ‘the seller’s perceptions on market’ (Kotler & Armstrong 2010, p.77); b) it is partially opposed to the market rule that in the context of each market the interests of the consumer need to be primarily served (Czinkota, M. & Ronkainen 207). In fact, the marketing mix highlights the interests of the seller as being of equal worth with those of the buyer; c) the structure/ content of marketing mix cannot be effectively protected; competitors can develop similar marketing mixes for protecting their market position (Lamb, Hair & McDaniel 2011); d) marketing mix may not cooperate well with certain business strategies that are widely used for promoted products/ services worldwide; reference is made, as an example to the case of branding (Riaz & Tanveer 2011) and e) marketing mix may not be quite effective in markets with strong socio-cultural environments, where the influence of culture on ethics is quite strong (Keramati et al. 2012). The potential expansion of marketing mix, i.e. above the 4Ps, could possibly help to resolve the problems presented above (Goi 2009). In addition, it should be noted that in turbulent markets, the findings of the marketing mix would not be quite credible (Borden 1984). The market conditions would be changed regularly under the pressures of external forces; thus any assumption for the actual qualities/ potentials of the particular market would be quite risky (Borden 1984). In the case of Sea View Farm, the elements of marketing mix would be analyzed as follows: a) Product; the firm’s products belong in a particular category: organic dairy products; the current quality of these products is high, taking into consideration of the loyalty of the firm’s customers. In addition the fact that the activities of the firm attracted local media indicates the success of the firm’s products in the local organic food market; in the future the firm’s products should not be changed, in terms of its content/ quality; b) Place; as explained in the case study the business focuses on the production of ‘organic diary products’ (case study, 1st par). Such products are not unique in the British market. In fact, the organic food industry is highly developed in Britain. According to an article published in 2008 in the British newspaper Independent, the demand for organic food in Britain is so high that local producers are not able to respond to the relevant market needs (Hickman 2008); However from 2010 onwards a trend for decrease in the sector’s profits has appeared. Indeed, in 2010 the decline in the profits of the organic food industry in UK reached the 5.9% - compared to 2009 (Smithers 2011); also in 2010 the organic food producers in Britain were reduced by 4.2%, as compared to 2009 (Smithers 2011); c) Promotion; as noted earlier, in 2010 the first signs for the decline of the organic food industry in UK have appeared (Smithers 2011). On the other hand, in 2008 the demand for organic food products in UK was so high that local producers could not respond to orders (Hickman 2008); it is clear that the potentials of organic food products in Britain are significant; however, in current market conditions consumers in UK could be convinced to buy such products only if the pricing practices were aligned with the current cost of living in the country; the advantages of the firm towards its competitors in terms of quality and price could be highlighted through appropriately customized marketing schemes; According to a study of Stanford University the findings of which were published in 2012, organic food does not result to specific health benefits (BBC News 2012). The marketing of such products should emphasize on studies that have highlighted the potential benefits of organic food; d) Price; the price of organic food products in UK is rather high; in fact a continuous increase has been identified in regard to the prices of these products for the period from 2002 to 2008 (Hickman 2008, see Figure 1 below). For the years 2008 to 2011 a similar trend was expected to appear (Hickman 2008). In order to compete its rivals in the particular industry the firm should keep its prices at low to average levels. In any case, the level of price should be based on two factors: 1) competition and 2) monthly expenses. This means that the prices of the firm’s products should be low as possible but under the terms that the firm’s monthly expenses are fully covered. Figure 1 – Price of organic food products in UK, from 2002 to 2011 – the dots reflect the estimated prices of these products from 2008 to 2011 (source: Hickman 2008) 3. Identification and definition of current customers People living locally are the current customers of the firm. In the case study there is no reference to customers in other areas of UK. Also, there is no reference to specific businesses, as key clients of the firm. In addition it is noted that the firm’s customers need to visit the farm for buying its products; however, delivery to the place chosen by the customer is also mentioned as a potential option. It can be implied that local businesses are also customers of the firm but at rather low level, an assumption that can be derived from the following fact: in the past the firm’s owners were able to stop working around 7pm and had plenty of time to rest. 4. Identification of the organization’s current problems and strengths Currently, the firm is well positioned in its market. In fact, its products are sold with no problem. Due to the quality of its products and the friendly behaviour of its owners the business has managed to keep the loyalty of its customers at high levels. However, the firm has also a key disadvantage: there is no specific operational strategy. This means that orders are processed randomly while the rate of production is not controlled. In this way, inconvenience could not be avoided, especially if the level of demand is changed, temporary or in the long term. This problem has appeared recently when an increase for the firm’s demands appeared under the influence of the promotion of the firm’s activities through local media. 5. Selection and definition of a future target market Through the marketing practices that the business will incorporate its customer base will be changed; individuals and businesses across UK will have access to the firm’s products. 6. Conclusions The use of appropriate customized marketing practices could help the Sea View Farm to improve its market image and to increase its customer base. The marketing plan involved, as suggested below, should be continuously monitored and evaluated periodically as of its performance. The key challenge that the firm would have to face is the following one: the development of an effective marketing plan would require funds for covering the relevant expenses. Also, if the targets set by the plan would be achieved another issue would appear: the level of the production should be increased while the time of delivery should be reduced. Such goals can be achieved only by retrieving adequate funds, either in the form of investment or in the form of loans. The owners of the business, before entering a marketing project should have to decide whether they would be willing to take the measures necessary in order to retrieve these funds. Sharing the ownership of the business would be possibly required in order to increase the firm’s capabilities in terms of production. 7. Recommendations It is clear that the implementation of a marketing plan in the Sea View Farm is inevitable. However, such plan should be carefully designed ensuring that the firm’s goals and its resources are taken into consideration: a) the social media would be employed as a key marketing tool for promoting the firm’s product; low to zero cots is the key advantage of the particular marketing tool. This fact is critical for the business the potentials of which to invest high amounts on marketing plans are quite limited; b) local media should be further used, as in the past for highlighting the quality of the firm’s products, as one of the firm’s major competitive advantages; c) the participation of the business in local cultural and athletic events should be possibly discussed, taking into consideration the time/ cost involved; d) media at national level would be avoided, at least at a first level, since such initiative would be quite costly; e) emphasis should be given on the update of technology currently used in production, so that the volume of production is increased; in regard to this issue, marketing would help in the following way: funds could be raised locally, through events arranged in the local community centre. The promotional plan involved should emphasize on the following fact: locals could buy products at lower price but at higher quantity so that the funds required for updating the firm’s equipment are retrieved. References BBC News (2012) Organic Food ‘not any healthier’. September 4, 2012. BBC. Available at http://www.bbc.co.uk/news/health-19465692 Borden, N. (1984) The concept of the marketing mix. Journal of Advertising Research Vol 2, pp.7-12. Available athttp://www.commerce.uct.ac.za/managementstudies/Courses/bus2010s/2007/Nicole%20Frey/Assignments/Borden,%201984_The%20concept%20of%20marketing.pdf Czinkota, M. & Ronkainen, I. (2007) International Marketing. 8th ed. Belmont: Cengage Learning Doole, I. & Lowe, R. (2008) International Marketing Strategy: Analysis, Development and Implementation. 5th ed. Belmont: Cengage Learning Goi, C. (2009) A Review of Marketing Mix: 4Ps or More? International Journal of Marketing Studies Vol 1, No 1, pp.2-15. Available at http://ccsenet.org/journal/index.php/ijms/article/download/97/1552 Hickman, M. (2008) Organic industry unable to cope with demand. Jan 25, 2008. Independent. Available at http://www.independent.co.uk/life-style/food-and-drink/news/organic-industry-unable-to-cope-with-demand-773865.html Keramati, A., Ardalan, A. & Ashtiani, P. (2012) Relationship between marketing mix and sales performance in the context of the Iranian Steel private firms. International Journal of Arts and Commerce Vol. 1 No. 6 November 2012, pp.195-199. Available at http://www.ijac.org.uk/images/frontImages/gallery/Vol._1_No._6_/21.pdf Kotler, P. & Armstrong, G. (2010) Principles of marketing. 13th ed. Essex: Pearson Education Lamb, C., Hair, J. & McDaniel, C. (2011) Essentials of Marketing. 7th ed. Belmont: Cengage Learning Leadley, P. & Forsyth, P. (2004) Marketing: essential principles, new realities. London: Kogan Page Publishers Padel, S. (2011) The UK market for organic food. The Organic Research Centre. Available at http://orgprints.org/18365/12/padel-2011-uk-market.pdf Purnomo, S., Lee, Y. & Soekartawi, Why is understanding customer attitude toward 4Ps marketing mix important? The case of the livestock input industry in Indonesia. Journal of Development and Agricultural Economics Vol. 2(4), pp. 107-114. Available at http://www.academicjournals.org/JDAE/PDF/Pdf2010/Apr/Purnomo%20et%20al.pdf Riaz, W. & Tanveer, A. (2011) Marketing Mix, Not Branding. Asian Journal of Business and Management Sciences Vol 1 No 11, pp.43-52. Available at http://www.ajbms.org/articlepdf/ajbms201211i11103.pdf Smithers, R. (2011) Sales of organic products in UK fall by 5.9%. April 4, 2011. The Guardian. Available at http://www.guardian.co.uk/environment/2011/apr/04/organic-food-sales-fall Usman, M., Ullah, I., Kayani, M., Haroon, F. & Khan, M. (2012) The Impact of Marketing Mix and Market Orientation on Export Performance. Journal of Economics and Behavioral Studies Vol. 4, No. 1, pp. 66-71. Available at http://www.ifrnd.org/JEBS/Vol%204/1(1)%20Jan%202012/7.pdf Read More