The Marketing Mix of a Transport and Logistics Company - Assignment Example

Marketing

Question 1: Explain the 7Ps of the marketing mix. Evaluate the marketing mix of a transport and logistics company of your choice.

The marketing mix refers to putting the right product or a combination thereof in the right place, at the right price and at the right time. These are essentially referred to as the 4Ps of marketing. The 7Ps of the marketing mix is a model that comprises of the 4Ps of marketing expanded to include people, processes and promotion and is generally used in the service industries. Product is defined as an item produced or built to satisfy the needs of a given group of people. For the transport and logistics industry companies such as DHL Express Ltd, it is the service of conveying parcels from one point to another for the clients.

Price basically refers to the amount that the customer pays for the product. The price has an impact on the product in terms of its perception in the market and also influences its demand and therefore sales. For DHL there are different pricing strategies for entry in different countries to respond to the market which later are adjusted to the pricing in the rest of the world. Placement refers to distribution or positioning of the product in the market. DHL Express Ltd has offices and hubs in many parts of the world and also online platforms where customers can access their services. Promotion is comprised of elements that are aimed at boosting the brand recognition and sales. These elements include sales organization, advertising, sales promotion and public relations. DHL uses all of these in its promotion such as advertising/commercials on television and other media. People as a component of the 7Ps model are the target market as well as others directly linked to the business such as the staff at DHL Express Ltd. Processes are the systems and procedures involved in the execution of services and provision of goods to customers. Physical evidence pertains to how a business and its products (brands) are perceived in the market and also its presence and establishment. When one thinks logistics the brand name of “DHL” comes to mind.

Question 2: For an industry of your choice, explain how you would develop a customer service policy and discuss the service elements you feel are particularly important to that sector.

The importance of customer service policy is the continuous improvement of products and services so as to meet and even anticipate the need of the customers. In the banking industry, the service elements of people, processes and physical evidence are important. Developing a customer service policy begins with learning about the service in relation to then customers. This can be done through documentation of customer complaints and comments. Surveys can be conducted as well as focus groups. Information can be obtained from operational data, vendors, service providers and employees. For instance, the tellers are a useful source on the customer feedback.

Next create the customer service policy beginning with development of a mission statement. This basically sets out what the business seeks to achieve. Customer service goals are then set based on the vision statement and research. Based on the goal, the customer service policy is then developed. For example if the goal is quick access by customers, the policy can state that customers must be served within the first three minutes of arrival. The policy will essentially create the processes to be followed as an important service element. Train the people (bank staff) on the processes and allow discretion so that the policy is not a weapon against the customers. Customers should not be denied simply for the reason that “it is the policy”.

Finally, evaluate the customer service policy and set a baseline to establish the responsiveness of the policy. This creates a customer oriented culture for the company based on the understanding of their needs and expectations. Ease of complaint and comment must be provided especially given that 9 out of 10 unsatisfied customers will not report. The employees should be appraised on their knowledge and proper execution of the developed policy as well.

Question 3: Describe the environmental forces affecting a company’s ability to serve its customers. What frameworks can be used to analyze the interaction between the various elements of the marketing environment?

Environmental forces that affect ability for a company to serve its customers include those arising internally and also externally. Internal forces within the microenvironment can be controlled by the business and include staff, facilities, organization and the marketing mix as part of the marketing function. Top management can decide on the marketing mix, the structure of the organization among other things. Financing decisions are also controlled internally such as the composition of the capital structure and this affect the product and thus marketing. Technology within the business influences product research and development and determine its ability to compete with rivals.

External environmental forces include political, economic, social-cultural, Technological, environmental and legal factors commonly referred to as PESTEL. These factors arise outside the business and therefore are not controllable. Political factors include political stability, the party in power Vis -a -Vis their policies among others all which affect business.

Economic factors include the rates of interest, level of inflation, the economic cycle and others which impact on then customers’ purchasing power. Favorable economic conditions result in increased purchasing power and production which ultimately increases sales for individual businesses. Socio-cultural factors include the demography of the target customers such as their ages, their religions and beliefs, tastes and preferences.

Technology changes rapidly and this can affect the business without a chance for control. For example the shift to online marketing is inevitable and businesses have no option but to join in. Environmental forces include acts of nature such as earthquakes, avalanches, droughts and others. Natural disasters affect business and therefore customers. Finally, legal factors referring to the laws and regulations apply. Examples are laws on dumping and environmental degradations that have serious legal and cost implications if broken.

Question 4: Describe the product life cycle, supporting your answer with examples. How can a portfolio of life cycles increase the likelihood of business success?

The product life cycle is a series of various phases undergone by a product in the course of its existence. The first phase of the lifecycle is the introduction whereby promotional costs are relatively higher than the revenue owing to the extensive promotion (Armstrong and Kotler, 2015). This extensive promotion is meant to create awareness of the existence and convincing customers to opt for the new product. Success of the particular product in play is pegged upon use of an effective promotional strategy. For example, the price of the new product may be lowered significantly compared to its substitutes to encourage sales increase.

The introduction phase is followed by the growth stage whose main focus is promoting the product to enter new market segments. This may be done by expanding to new geographical areas and or increasing the product’s family such as introducing new flavors. The growth phase then paves way for the maturity phase which marks the peak profitability level of the product. This is because there is relatively lower promotional activity yet the product should be well established in the market. It is at this stage that firms can take advantage by adopting strategies that prolong the phase consequently increasing the overall profitability of the product. For example, the product may incorporate some new features to boost customer satisfaction while simultaneously attracting new consumers.

Lastly, a product goes through the decline phase whereby sales rely upon the product’s reputation since there is totally minimal, if any, promotional activity. For example, a portion of the consumers such as the elderly may be reluctant to forego the product for an alternative maybe due to its sentimental value. However, despite the continued relevance in the market, firms need to be keen to avoid losses in case production costs supersede the revenue. An understanding of the product lifecycle is crucial for any organization since it allows for manipulation and maximization of the specific phases.

Question 5: Explain the approach used to design a firm’s marketing communication mix (promotion mix). Illustrate the procedures using examples.

Designing a marketing communication mix requires the firm to follow several steps;

• Identify target audience

There is need for firms to first identify the targeted audience in order to come up with an effective communication mix. Identifying the target audience enables firms to know the current image and familiarity levels of the firm and its products among other essential aspects. Having gathered such information, it is possible to decide what and how to communicate in a way that is highly effective.

• Determining communication objectives

This entails determining the level of readiness of consumers in order to formulate the message appropriately to yield the desired response. For example, it is important to determine whether the message is meant to bring a new idea or change the current opinion.

• Designing the message

An effective message should be catchy, specific, and designed in a way that guarantees the desired response. The message should not only have an emotional and moral appeal, but also lack ambiguity. Additionally, the message should have a credibility appeal such as using medical personnel to relay a message about medical products.

• Selecting communication channel

A firm should also invest in determining the most appropriate communication channel be it personal or non-personal. For example, there is need to determine whether the message will be relayed by people such as through dialogue or without personal contact such as in bill boards.

• Establishing communication budget

Establishing an appropriate budget is pegged on a several factors such as the overall financial status of the firm and or the expected productivity of the promotion. Additionally, determining the budget is also affected by the activities and channels followed. For example, advertising in a newspaper may be relatively cheaper than on the television.

• Deciding on promotional mix

It is in the firm’s interest to determine the promotional tool to use such as advertising, personal selling, and or use of public relations. Additionally, the firm should determine whether to use one or several promotional tools.

• Measure the results

There is need for firms to measure the impact of the promotional plan designed. This allows determination of the effectiveness of the plan in a bid to maintain, improve, or adopt a new plan in entirety.

• Managing the marketing communication mix

This entails coming up with effective ways to ensure the smooth and expected running of the formulated plan.

Question 6: Describe the various distribution channel alternatives and identify the various critical elements influencing decisions in a marketing channel strategy.

There are various distribution channels depending on the number of participants or organizations involved. Nonetheless, it is important to note that a distribution channels refers to the path undergone by a product from the when it is produced to when it reaches the consumer. The main players in a distribution channel are the producer, wholesaler, retailer, and consumer. In some scenarios all the four players are present, while in others only the retailer is present, and the other scenario there is direct link between producer and consumer as shown below.

• Producerto Wholesaler to Retailer to Consumer
• Producerto Retailer to Consumer
• Producer to Consumer

It is important to note that distribution channels are determined by a several factors such as nature of the product and target group among others.

Nature of a product is essential in determining a suitable distribution channel due to its complexity and or technicality. For instance, some goods require specialized handling thereby reducing the number of players in a distribution channel. For example, the distribution channel of customized goods is limited to between producer and consumer only.

The target group or rather market is also an essential determiner of the distribution channel. For example, goods produced for military purposes require few players hence the most suitable distribution channel is direct from producer to consumer. Conversely, basic utilities such as food stuffs may pass through all players in the distribution channel.

Legal issues surrounding various products are also determiners of the distribution channel to be used. This mainly applies to products that are meant for specific target groups and not all people are allowed to be in possession.

The unit value of products may also determine the distribution channel adopted whereby high value products require limited players for distribution.

There is also need to make cost considerations while choosing a distribution channel to ensure that only the necessary costs are incurred.

Question 7: What are the differences between a production orientation, a sales orientation and a marketing orientation?

Production orientation refers to a scenario whereby an organization mainly focuses on the production aspect of business to gain competitive advantage. Additionally, production orientation is greatly dependent on the price factor due to the argument that consumers will opt for cheaper products. As such, there is high reliance on reducing the costs of production in order to maintain low prices of products offered while simultaneously ensuring profits.

Conversely, sales orientation is pegged on the argument that there is need for organizations to do more after production. In simpler terms, there is need to reach out to the consumers to notify them of existence of an organization’s products. The sales orientation philosophy argues that failure to carry out sales will reduce consumer’s chances of buying given product. As such, sales orientation is marked by advertisements and sales promotion strategies.

On the other hand marketing orientation’s main focus is on the needs and or interests of the customers. As such, marketing orientation is characterized by extensive research to identify customer needs. After identifying customer needs, firms can go ahead to produce the best product to cater for the specific needs identified. Additionally, there is need for organizations to get feedback from consumers to give room for improvement. This implies that consumers are the main determiners of products to be produced. Marketing orientation was adopted after the production and sales orientations respectively and is the marketing approach used in modern day.

Question 8: Describe the four main business orientations in Western Europe and discuss the changes that have taken place over the last two decades.

Although the concept of marketing has been in existence over the years, it has undergone notable changes to become what it is today. These changes have created what may be referred to as the evolution of marketing. This marketing evolution is marked by four seemingly different eras namely production orientation era, product orientation era, sales orientation era, and finally the marketing orientation era. Production orientation era mainly focused on the production aspect in an organization. As such, organizations focused on producing high quality goods while simultaneously maintaining low production costs in order to have favorable prices. The production orientation era was followed by the product orientation era whereby focus shifted to the product itself. As such, organizations had to concentrate on production of quality products to gain competitive advantage. Product orientation era was thus pegged on the belief that a good product would sell itself by gaining favor among consumers.

The evolution of marketing once again took a new turn whereby firms shifted focus to the sales aspect of a business. Reducing costs during production and ensuring quality products was no longer enough to ensure business success. Sales orientation era brought in the aspect reaching out to the consumers to use products. As a result advertising became an integral part of any business. Nonetheless, focus shifted once again from sales orientation paving way for the marketing orientation whereby the main focus is on the needs and interests of customers. In marketing orientation, customer’s preferences and needs are essential aspects of ensuring business success. This implies that there was need for research to identify customer needs and then production of products and services that satisfy the specific need discovered.

Question 9: Explain what market segmentation is and identifies the types of segments that occur in the market. What are the advantages of market segmentation?

Among the most widely used and effective marketing strategies is market segmentation. Market segmentation entails subdividing or rather grouping the market into small groups with similar needs. As a result of the subdivision, it is relatively easier and highly effective to handle the needs and interests of each particular market group. This implies that market segmentation also requires formulation and later implementation of strategies befitting the various groups created. The process of formulation entails identifying target customers and coming up with strategies to ensure total satisfaction of the customers in each particular group. In fact, the effectiveness of market segmentation is based on this very aspect since different customer groups have their own set of demands that may need specialized attention. As such, market segmentation also has other advantages such as mitigation of risks, customer retention, and increased competitiveness.

There are various types or rather ways of implementing market segmentation based on demography, geography, psychology, and behavior of consumers. Market segmentation via demography yields demographic segmentation that mainly focuses on attributes such as gender, age, race, nationality, and income among others. For example, provision of products and services targeting people within a given income bracket such as low cost or high cost. Behavioral segmentation focuses bringing together consumers with similar usage and decision making patterns. For example, blackberry mainly targeted business people while Nike targets sports enthusiasts. Market segmentation through psychology yields psychographic segmentation that focuses on people’s lifestyles and interests. For example, products that reflect a certain social standing such as producing latest or executive wear in the clothing industry. Market segmentation may also be done based on geography by producing products befitting specific geographical areas. For example, organizations marketing heaters in cold areas and air conditioners in areas with hot climatic conditions.

Reference

Armstrong, G., & Kotler, P. (2015). Marketing: An introduction. Boston : Pearson, 12th Ed.