Modern Marketing and Marketing Concepts - Essay Example

Marketing Concepts Marketing has existed since man first began to exchange goods and sell services to fill s needs. In todays global economy,intense competition has made marketing ever more important and can be the difference between companys success or failure. Information technologies have brought about new ways of selling products. Modern marketing demands knowledge of sociology, psychology, anthropology, and economics. Enlightened customers no longer buy into the old strategy that believes a good product sells itself. It has become a well-balanced mix of concepts and techniques, research and sales, promotion and production. A traditional philosophy of marketing, known as the production philosophy, believes that a good product will sell itself (Sandhusen, 2000, p. 13). By the beginning of the 20th century this had evolved into a sales oriented system. The sales based philosophy worked on the belief that a good salesman could sell anything to anyone. It relied on advertising and customer manipulation (Sandhusen, 2000, p. 13). These philosophies evolved throughout its history and most modern theorists now contend that all business is customer driven and successful marketing is getting the customer what they want at a price they are willing to pay (Lancaster & Reynolds, 1999, p. 78). Marketing has been described as "[...] the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organisational objectives" (Lancaster & Reynolds, 1999, p. 1). It is not so much a single task as it is a concept of visualising your customer through their eyes, and creating a profit by understanding and satisfying their needs by providing something of value (Forsyth, 1999, p.124). In its basic form, marketing matches the companys capability to supply the customer with a customers need for goods. This process is often analysed through the use of the 4Ps/4Cs model. The producer controls product, price, promotion, and place. The customer controls their 4C counterparts of customer solution, cost, communication, and convenience. In general, though price incentives can be utilised on a limited basis at some cost to profitability, marketing can only control the promotion and the place in the short term. The customer controls the cost they are willing to pay, acceptance as a solution, convenience, and communication with the producer. Except by manipulation, the company is limited to only researching the aspects that are controlled by the customer. Todays customer driven company relies less on market manipulation and more on researching the customers desires and buying habits. They seek to integrate the wants and needs of the customer into the companys capability of production and price. However, everything a company does must be central to the needs of the customer (Lancaster & Reynolds, 1999, p. 3). Sound marketing strategies are based on relationships that are long-term, mutually beneficial, and with internal customers who may be agents or distributors (Lancaster & Reynolds, 1999, p. 244). Other marketing approaches stress the need to market to the customer in a way that also takes into consideration the good of society as a whole (Sandhusen, 2000, p. 14). Marketing is the companys interface between the customer and other key elements of the organisation such as finance, production, and design. This concept remains constant and is unaffected by the product type or market sector. It is a continual process of scanning the environment to glean information about the customer in terms of age, politics, economics, culture, and technology. In the end, it does not matter what you market, where you market it, whether it is a tangible good or a service, domestic or global, the basic marketing processes remain the same (Sandhusen, 2000, p.15). The implications of a universal approach to marketing can be seen in the experience at Novartis Pharmaceuticals. Novartis, after years of lacklustre performance, brought in successful ex-Pepsi executive Thomas Eberling as CEO. Eberling contended that selling medicine was no different than selling soft drinks, and in his words, "[...] both require an in-depth knowledge of consumer behaviour" (as cited in Capell, 2001). Understanding customer and market segment behaviour is one of the most important elements of marketing. It requires understanding the segment as well as how they react as individuals. Behaviour impacts profits and marketers employ extensive research to predict customer reaction to a product. This may include a segments willingness to try other products from the same brand, an openness to future upgrades, or their threshold for dissatisfaction (Kumar, 2006, p.43). Customer behaviour is also researched to determine a segments willingness to try new tastes, fashions, or ideas. Marketing must remain cognisant of images that could be seen as inappropriate to a target group, or they risk permanently damaging the brands perception and the products reputation. Products that fail are often doomed because of a misunderstanding of customer behaviour that resulted in a product that was unacceptable to the customer. High technology products that are targeted to early adopters can be impacted by a failure to understand the expectations of the customer. This aspect applies to all aspects of the transaction such as use, features, reliability, and packaging. There are several ways that a marketing department can enhances company profits but there are also ways that customers and organisations are served by efficient marketing. The effect of marketing can be shown in regards to political candidates that have the potential to inform the voter of important issues and a candidates stance. Marketing serves the customer by producing and delivering the desired information at an affordable price. Marketing professional services can aid the customer by making them more aware of the specialities and technologies that are available. Marketing research that is able to anticipate and supply industry with new technologies in a timely fashion, benefit their customers by reducing the lag time that would be involved with typical reactionary sales. The tourism industry serves the tourist and the public from a multitude of aspects. Potential tourists are given quality products and an awareness of what is available. Steven Pike in his book Denstination Marketing Organizations (2006), contends that marketing a tourist destination benefits the host country, the natural environment, the commercial tourism sector, and as such fulfils a large societal benefit (as cited in Lovelock, 2006, p. 423). This is the case where marketing is the central figure in integrating the customers demands with the producers products for everyones benefit. The act of tailoring a product and price to satisfy a given group of customers is known as positioning and is accomplished through segmenting or targeting a well defined customer base. Without adequate market positioning, a company would end up trying to satisfy all the market all the time and end up satisfying none of them (Lancaster & Reynolds, 1999, p. 9). Ideal positioning is the ability to direct promotions at the segment of interest and design new products to satisfy their unique needs. A segment must be narrowly defined yet large enough and to be of any value. It may be defined by age, sex, class, family size, or ethnicity. Segmenting the market demands meticulous research. Exploratory research tests the market composition and demographics. It is the foundation that other research decisions will be based on. Questionnaires and focus groups help gain insight about the customers initial reaction to a new product. Pricing research and test marketing is pivotal as the company moves a product from design to market. This research is critical to establishing the potential for initial acceptance of a new product. It makes no sense to deliver a product that costs more than the customer is willing to spend, or to sell at a loss just to move a product. It is also a disadvantage to sell at a price that is so low that it negatively affects the customers perception of brand quality. Marketing research can also aid in the of resource allocation decision process. As an example, the cost of advertising may not make it possible to mass market a consumer product even though it has universal appeal. It may be necessary to target the most likely buyers first and roll out the campaign in stages (Sandhusen, 2000, p. 457). Research can also help to weed out the winners from the losers. When Coke introduced New Coke, the market was unreceptive for brand reasons that were not related to taste. They were then faced with the dilemma of pulling it off the market. However, that would leave them with a product that was now Old Coke. They rebranded the original as Classic to maintain the products prestige and maintain their customers brand loyalty. Promotion to effect change is often expensive and time consuming and relies on the ability to establish communication with the customer through promotions. Customers that are isolated from the producer present a special challenge to marketers such as the case of Guardian Insurances Retirement Plan. Sold through a distributor network, the agents became an obstacle to product promotion. Independent plan brokers already had existing relationships with other providers and did not have a desire to offer a product with an unknown reputation. Even with the offer of higher commissions, agents were reluctant to offer their customers a new product and put their business on the line (Erlich & Fanelli, 2004, p. 167). The inability to communicate with the customer base through promotion resulted in product failure. The ages old practice of marketing has seen it grow from the simple act of selling and manipulating to a sophisticated process of research and delivery. Even with the parameters they control, marketers are limited as to the short-term changes they can make. Todays marketplace is a customers market where they set the needs and boundaries and the marketer works with the producer to satisfy these requirements. The multi-faceted characteristics of customers and market segments demand that todays marketer be skilled in a wide variety of disciplines. References Capell, K. (2001). Novartis marketing doctor [Electronic version]. Business Week, 1. from Ebsco Host. Erlich, E., & Fanelli, D. (2004). The financial services marketing handbook : Tactics and techniques that produce results. Princeton, NJ: Bloomberg Press. Forsyth, P. (1999). Marketing professional services : Practical approaches to practice development . London: Kogan Page. Kumar, V. (2006). Profitable relationships [Electronic version]. Marketing Research, 41-46. from Ebsco Host. Lancaster, G., & Reynolds, P. (1999). Introduction to marketing : A step-by-step guide to all the tools of marketing. London: Kogan Page. Lovelock, B. (2006). Book review: Marketing destination organisations [Electronic version]. Journal of Sustainable Tourism, 14(4), 422-424. from Ebsco Host. Sandhusen, R. (2000). Marketing: Barrons business review series . 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