Why Should an Organization Embrace the Marketing Concept - Example

Understanding Marketing Understanding Marketing 1 Introduction: 1 Section 1: Why should an organization embrace the marketing concept 2 Question 2: Marketing Plan 7 Recommendations for the campaign: Marketing Mix 12 Reference: 16 Downing, Leanne, Sensory Jam, How the Victoria Preserving Company Pushed Australian Cinema Space into the New Millennium, pub, Journal of Media and Culture, vol. 9 no.6, 2006 16 Malhotra, N, Shaw, M, and Crisp, M, Introduction to marketing Research, 1996 16 Nickles, W and Wood, M, Strategy Development and a customer focus, 1997 16 Introduction: Marketing can be understood to be a social process by virtue of which individuals and groups attain the things that they require or want. This is done through the creation and exchange of products and values with others. (Kotler, 26) Marketing can be understood to be the analysis, planning, implementation, and control of carefully formulated programs designed to bring about voluntary exchanges of values with target markets for the purpose of achieving organizational objectives. The process is heavily reliant on designing the organization’s offering in terms of the target markets’ needs and desires, and on using effective pricing, communication, and distribution to inform, motivate, and service the markets. (Philip Kotler, 28). Summary The following paper shall try in two basic parts to demonstrate the reason and rationale that governs the requirement for marketing in any given organization and the apt marketing mix that needs to be adopted as per the product produced for sale. The paper is divided in tow basic sections. Part one will deal with the theoretical aspects of the marketing process and part two will develop on the theories outlined in part one a list of recommendations for ‘Greater Union Cinemas’ that would be the basic framework of a marketing policy that could be adopted by the company for better promotion leading to better sales. Section 1: Why should an organization embrace the marketing concept In order to understand the process of marketing, it needs to be clarified, first and foremost that the process is one in evolution, there are changes in the approach that one needs to take and these changes are frequent because they need to be in congruence with the anticipation of customer behavior and the ways in which to reach the customer and model behavior according to the targets of the campaign. This would then mean that technological innovations, strategic alterations, and competitor analysis all needs to be part of the campaign design and goals. The central role of marketing in the enterprise stems from the fact that it is a process through which the firm creates value for its target audience and chosen customers (Silk, 3). The process is initiated and completed by meeting customer requirements. A given organization therefore should define itself not by the product that it sells but by the customer benefits that the sale provides. In fact scholars such as Levitt responsible for the development and evolution of classic marketing theory support the view. The basic idea is that organizations must never forget what business they are in. This theory can be understood in line with the railroad example. Railroad companies for example are not in the business of making trains; but in the transportation business (Levitt, 138-149). The idea therefore is simple; businesses need to be able to evaluate themselves, by taking inventory of the target market and making an assessment of what the market really needs. The marketing process helps the business do just this because its very basis lies in an answer to the fundamental questions like, whether the market needs additional features or does it really just need an entirely different range. These analyses are dependent on the product at hand, the needs of the market and ways and if the product meets these needs. Having created value for its customers, an organization is entitled to capture a portion of that value through the process of pricing (Dolan, 14). In order to remain a viable concern, the firm needs to sustain this process of the creation and capture of value over time. Within this framework then, the plan by which value is created on a sustained basis is the firm’s marketing strategy. Marketing strategy involves two major activities: 1. The selection of a target market and the determination of the desired position of the product in the customer’s mind and 2. Specifying the plan for the marketing activities to achieve the desired positioning. In these activities, positioning is the unique selling proposition for the product at hand. In order to understand the rationale behind the process of undertaking a marketing process by embracing the concept is important that one outlines the actual factors that underlie the process. There are in fact five major factors that underlie a marketing based process of decision making. These are also known as the 5 Cs and include: customer needs ( needs that the firm seeks to satisfy); company skills (special competencies that the firm needs in order to process and meet those needs); competition ( the competition which rivals in the firms in meeting these needs); Collaborators ( those that the firm needs to enlist in order to help and the ways in which these helping factors can be motivated); context ( the cultural, technological and legal factors that limit the possibilities- these are the constraints and the restrictions that the marketing process will need to deal with and over come). A second point of reference would be the global economic crisis that has put in jeopardy the life of most businesses including the ones that are based on the leisure lifestyle needs of individuals (Kotler, Jain and Maiscincee, Introduction ix-xii). Markets are changing and changing fast. Customers today are price sensitive there is new competition that needs to be dealt with. Beside this a business in order to be successful in staying afloat and indeed, in making a profit needs to be capable enough of making use of newer and more innovative channels of distribution and communication such as the internet, wireless commerce, globalization and deregulation. Markets are not just changing, so are the technologies that support market demand and supply regulations. And it is in marketing more than any other field of business management that the impact of these changes can be seen. It can be stated unarguably in fact that making use of marketing mechanisms and technologies is imperative for the success of a business by virtue of the fact that if one does not do so, there is no hope for the business to survive competition that would offer the customer more value for his money. The conclusion that can be derived from the above discussion is that the fundamental need for marketing and the application of marketing concepts to a business arises from the fact that an organization can prosper and survive only if it is able to meet the demands of its customers. The underlying concept should be to match the company’s abilities with the demands of the customer and this exchange takes place within what is known as the marketing environment. An organization that adopts the marketing concept accepts the needs of potential customers as the basis for its operations. And it is on the basis of this need that it streamlines product thereby creating the basis for its success. Consumer wants are fashioned by societal and civilizing forces which are inclusive of the media and marketing activities of businesses. Consumer demand is a want for a specific product supported by an ability and willingness to pay for it. An organization which applies these principles as the basic organizational and functional principle in the management of business can be said to have adopted the marketing concept. It is important for an organization at adopt a marketing concept because it helps the organization streamline its products making them seem more (1) attractive; (2) efficient; (3) affordable; and (4) available. The following report shall look to apply the analysis that has been above to the Greater Union Cinemas, a multiplex chain located in Australia also known as Birch Carroll & Coyle, found in Queensland, the Northern Territory and in New South Wales. The chain owns more than fifty screens spread over 20 centers all over the country (Greater Union Cinema, official webpage). There are serious expansion plans that have also been undertaken by the chain with new complexes set to open in New South Wales by 2010. The greatest competition that the business faces is from the Hoyts which is the other big multiplex cinema chain operating in country. An application of the above given analysis on marketing concept to the movie business especially to the world of multiplexes and megaplexes would need first and foremost an understanding of the fact that the movie business had undergone a radical transformation in the past decade and a half. It has in fact now been accepted that the entire movie going experience has now been revolutionized and that it has undergone a sea change. What this means is that multiplexes and cinema halls are not just in the business of putting up a movie show but they are in the business of selling a few hours of a luxurious relaxing entertainment to their customers, which cannot just include a movie-it would also then include the variables associated with watching cinema, variables such as the sound, the seating, the parking, booking tickets among a host of other things. Modern multiplexes are high investment propositions, providing consumers with all the comfort and luxury that they demand (Morley, 26). There is more to cinema going than seeing films. There is going out, the sense of relaxation, combined with the sense of fun and excitement, rather than selling individual films, cinema is best understood as having sold a habit or a certain type of socialize experience. The idea in the second part of the assessment therefore will be to address the issues related to Greater Union Cinemas on the basis of the application of these principles and making recommendations that would help in a better application of the marketing concept to the management and organization of the multiplex chain through an outline of the market segmentation, outlining some market research techniques thereby setting marketing objectives and finally coming up with ideas that could help fulfill these objectives. Question 2: Marketing Plan Market segmentation is process which identifies different groups of users within a market who could possibly be targeted with separate products or marketing programs (Croft, 1). The concept has its origins in early economic theory where it has long been established that demand is linked to the level of competition and to pricing. The idea of dividing up a market into homogenous segments and targeting each one with a distinct and/or message is now at the heart of marketing theory. The idea behind segmentation is simple: dividing buyers into distinct groups on the basis of needs, characteristics or behaviors, and wooing them with separate products that bring in acceptable returns (Ong, Film Ratings and Market Segmentation). Market segmentation in case of a multiplex audience is varied and complex as this will not just decide the manner and form of marketing strategy but would also determine, the actual show timings; the manner of ad campaigning; the sponsors that need to be approached and the actual movies that would be picked for the shows. Dealing effectively with multiple market segments is consistent with good strategic business planning. The process has to begin with the identification of the business identity. This has already been defined. Second, there needs to be the evaluation of one’s own business strengths and an assessment of the competitors' strengths and weaknesses. Finally, there needs to be an evaluation of the customer base. The customer base in case of a multiplex chain such as Greater union would be the customer that wants the premium movie experience and does not mind doling out a bit more to get it; the customer that wants a simple enjoyable evening out with family or friends. Market segmentation therefore in case of Greater Union needs to be broad and be inclusive of the entire movie going audience. Marketing Research that needs to be undertaken for in order to make apt recommendations has tow basic goals (Malhotra, Shaw and Crisp, 50): 1. Linking individual technique to the research problem 2. Ensuring that multiple research techniques are combined over time to address large scale business issues. The idea is simple. Develop through research a body of information related to customer choice and behavior that can assist in making decisions related to the development of an effective marketing strategy. In principle marketing research and business strategy share a relationship that is reciprocatory in nature (McQuairre, p53). The traditional techniques of marketing research include: secondary research, customer visits, focus groups, survey research, choice models, questionnaires and experimentation. The first most important technique for research that needs to be used in our case is that of secondary research. This would mean a survey of the already existing literature on customer behavior, ratings given to complexes providing cinematic experience and the research papers that demonstrate rankings and total earnings along with the strategy adopted by Greater Union as well as rivals like Hoyt. This helps in making an assessment of market opportunities and threats, and recognizing existing strengths and weaknesses not just of the organization but also those of the rivals. This would help demonstrate the value that the movie go-er is looking for in his cinema experience. This particular process helps at the environmental scanning stage of the decision making cycle and can be used to identify. The second major technique that is to be used here is that of a focus group which would be made up of at least two members from each of the target groups in the market segment. For example the focus group would include a few regulars from the Gold Class, the 3D auditoriums, a few children and their parents, teenagers and two film critics. This would provide a group varied enough to be a sample of the actual target audience of the marketing campaign. The greatest merit of the focus group method is its uncanny ability to throw up surprises and produce a fresh perspective. This technique though is rough around the edges, but is important by virtue of the fact that it brings the marketing professional in direct contact with its audience. The third technique that can be used is that of sampling. It’s highly technical and as a process would most likely be outsourced to a professional survey agency or a marketing research vendor. This would mean an initial set of samples that would give the research direction-a limited number of people within the audience would be contacted and asked to answer a few basic questions about brand identification and their expectations from the movie experience. From this is derived the obtained sample which is in essence answers from those who actually completed the questionnaire. The sample frame is devised and data from the accessed population is used to complete the research. Objectives of Marketing Campaign: The objectives of the campaign can be outlined at the corporate and at the functional levels. The objectives or the targets that are set at the corporate level are concerned with the overall business or the organization. This would mean the tangible returns that the campaign should bring back to the business. This particular campaign sets itself a modest target of a 20-25% increase in the footfalls within a two month period of the implementation of the project. It also aims to increase earnings per share by at least 5% this year. The second part of the objectives that are set are however more important despite the fact they will not demonstrate themselves in terms of hard or tangible results for the organization but will yield and impact which will be felt on the long term profits for the brand as a whole. These are the functional targets of the project at hand. The first and the most important objective is brand building and brand differentiation for Greater Union Cinemas. The importance of brand equity consists in numerous benefits for companies that own brands. Brand equity has positive relationship with brand loyalty. More precisely, brand equity increases the probability of brand selection, leading to customer loyalty to a specific brand. The audience should be able at the end of the project cycle, to distinguish clearly the value added services that have been provided by Greater Union and chose the movie experience provided over any other multiplex or stand alone theater. The other most important objective is the buildup of a customer base that extends to over 50,000 across centers within three months. The idea is increase market share by 8% from the time that the campaign is launched till the time that the campaign reaches the end of its shelf life. Recommendations for the campaign: Marketing Mix The structural model of the effects of marketing mix elements on brand equity is defined in line with the existing theoretical findings. The marketing mix to be considered here is product-cinema; pricing-the price that the consumer has to pay for the ticket; promotion-the manner in which the product is being brought into the limelight making it desirable for the customer and place-the medium and the manner in which the customer is being reached (Belch and Belch, 300). At the very beginning of the recommendation outline it can be mentioned that there is not much that can be done related to innovation regarding the product at hand that Greater Union is trying to sell. What needs to be done however is that show timings for movie genres should be adjusted and fitted to as to go with the appropriate timings for the niche audience. For example, an animation flick will not find many takers during school hours on weekdays or very late at night since the target audience would be children. Show timings therefore should be adjusted towards the evening so as to give the product utmost scope to sell. Secondly, the Greater Union Multiplex itself is the product. For this purpose the unique and the differentiating factors of the chain need to be highlighted. This would mean that the idea of a great cinematic experience for every need would be the underlying feature of the campaign. What this would do is that it would be in keeping with the broad nature of the market segment that has been identified and targeted. Along with this the facilities and the value added products that come along with the chain must be put in focus. The parking, the sound quality and the seating and the culinary experiences also need to be marketed. The staff should be trained in order to provide a great hospitality experience. The AIDA model should find application here. The model basically states that in order to get a customer interested one has to first gain attention, thereby arousing desire which would ultimately lead to action. This also means that the price that the customer will have to pay needs to be worth the service that he is being provided (Nickels and Wood, 76) This means in simple terms that the customer has to feel that he is getting value for his money. Pricing needs to be competitive and yet it needs to ensure that there is a profit. For this purpose the overheads needs to be reduced. Staff should be kept to the absolute essential and there needs to be major usage of technology. Also it is here that the idea of promotion and that of bulk selling to corporates and to schools can be adopted. Special care needs to be provided to the ones who come in big groups. The principles of demand and supply would obviously apply. Another innovation that can be implemented possibly is that the price of the food, drink and parking is included in the price of the ticket and the rest of it at a little bit of a discount. Innovations to draw in new loyalists: The creation of new loyalists is important if the business expansion plan has to go as planned. There are a number of ways in which newer crowds can be attracted. The idea is getting customers for the first time, then retaining them through impeccable value added services and additions. It is for this purpose that the chin can host cinema festivals which would put on show alternate and regular cinema appealing different parts of the market segments. The chain can also act host to a number of reality show auditions for the kids and the youth that tend to dominate TV these days. This gains free publicity and helps in brand creation showing that the brand is identifiable with the youth and all that is considered exciting new and ‘happening’. Posters can be put up to this end at coffee shops and youth theatre. A brochure campaign would also come in handy. The musty important aspect of the marketing mix however would be the promotion and the medium that would be used (Chaston, 98). Promotion strategy should reinforce market segmentation i.e. the theme of ‘a cinema for everyone’ needs to be expanded. Therefore the campaign has to be inclusive and try and attract the teenagers, the children and the adults. Advertisements on hoardings and pamphlets which would be handed out should be based on the theme of fun for family, couples and kids. Promotion strategy would also include contests held over the radio, and on newspapers. An SMS or a texting campaign is an economically viable yet effective medium of again getting noticed. The best way of ensuring footfalls however is to try and manipulate the cyber world. This means that it needs to be ensured that a search on a movie in a particular town should yield the results of Greater Union Cinema before everyone else. Popup ads are handy devices in this case. Web ads on mails social networking websites are also interesting and highly effective options (Downing, Sensory Jam). The idea is simple. The choice should be made clear. A brand ignored is a brand lost. Beside this on the spot marketing and the traditional methods of PR need to be employed with some level of seriousness in order to get the brand exposure not as just an ad but as editorial advice. Press releases including pictures are the best way of doing this. Finally, it should be ensured that interval advertising is not discontinued and the marketing for the next release starts when the crowd is visiting the present movie itself. Conclusion: In conclusion therefore it may be summarized that the report has basically tried to assess the need for the adoption of marketing concepts in the context of the highly competitive world of business today. The basic point to be noted is that a business needs to have a clear understanding of the product that it is attempting to sell and the methods that would be most suited in aiding the organization in making a sale of the product at hand. There are a number of marketing tools that can be made use but it is important that these tools understood and being congruence with the product being sold or they can have a boomerang effect. Finally, getting the marketing mix right is an absolute essential to the success of any marketing or advertising driven campaign and in the absence of a proper marketing mix that has not been based on appropriate research there can be more harm done than good. Reference: Silk, Alivin, What is marketing?, published: Boston, Harvard Business Press, 2006 Levitt, T. Marketing Myopia, pub, Harvard Business Review, Vol. 82 No.7/8, 2004 Dolan, Robert J, Note on Marketing Strategy, Class Note 9-598-061, Published: Boston, Harvard Business School Publishing, 1997 Kotler, Phillip, Jain D and Maiscincee S, Marketing moves: a new approach to profits, growth, and renewal, Pub, Boston, Harvard Business Press, 2002 Croft, Michael, Market segmentation: a step-by-step guide to profitable new business, Pub, Routledge, 1994 Ong, Jamie S, Film Ratings and Market Segmentation, pub, CBE Faculty in the column of Business Focus of Manila Bulletin, 2003 Morley, David, Conditions of Post Modernity, pub, London: Routledge McQuiarre, Edward, The market research toolbox: a concise guide for beginners, Published by SAGE, 2005 Chaston, Ian, New marketing strategies: evolving flexible processes to fit market circumstance, Pub, Sage, 1998 Downing, Leanne, Sensory Jam, How the Victoria Preserving Company Pushed Australian Cinema Space into the New Millennium, pub, Journal of Media and Culture, vol. 9 no.6, 2006 Malhotra, N, Shaw, M, and Crisp, M, Introduction to marketing Research, 1996 Nickles, W and Wood, M, Strategy Development and a customer focus, 1997 Read More