Concept and Process of Marketing, and Characteristics of Market Orientation - Essay Example

Marketing Submitted by: XXXXXXXX Number: XXXXXXX of XXXXXXXXX XXXXXXXX XXXXXXX XXXXXXX Submission: XX – XX – 2010 Table of Contents Table of Contents 1 Introduction: 3 Concept and Process of Marketing: 3 Marketing Definition: 3 Characteristics of Market Orientation: 4 Elements of Marketing Concept: 4 Benefits and Costs: 5 Segmentation Targeting and Positioning: 5 Micro and Macro Environment: 6 Recommended Segments: 6 Target Markets and Buyer Behaviour: 7 Extended Marketing Mix 7 Sustaining Competitive Advantage: 7 Distribution: 8 Prices and Market Position: 8 Promotions: 8 M&S and Extended Marketing Mix: 9 Market Segments and Contexts 9 Recommendations to M&S: 9 B2B vs. B2C Marketing: 10 International Marketing vs. Domestic Marketing: 10 Bibliography 12 Introduction: Marketing and various elements of marketing play a very important role in the working of every company. This paper aims at discussing a few elements of marketing using an example of a leading retailer, Marks and Spencer. The paper will firstly provide a brief explanation of the various elements of marketing and will provide the alternative definition of marketing. This will be followed by the example of M&S and will deal with various aspects of the company, like the macro and micro factors that impact the company and the target markets of the company and the buyer behaviour of the target segment. This will be followed by the marketing mix of the company. The paper on the whole provides a deep insight into the company and marketing aspects of the M&S. Concept and Process of Marketing: Marketing Definition: The term marketing has a number of different views and opinions and there is a high level of confusion that can be found on this term. Different people from different industries have different views on the term. Ever industry uses the term marketing for different processes within the company (Webster, 1988). For instance, for a company selling coal, marketing is simply an understanding of the local markets and the cost that he can sell the produced coal. However marketing is very different for a person working for a company that sells products in the market. The alternative definition to marketing includes that by the AMA (The American Marketing Association). The AMA has defined marketing as, “The performance of business activities directed toward, and incident to, the flow of goods and services from producer to consumer or user” (OShaughnessy, 1984, p. 4). The above mentioned definition focuses on the distribution aspects of marketing and there is clearly no mention of the most essential aspect of marketing, i.e. the Four P’s. The AMA has revised this definition and changes it to a more comprehensive one in 1985 which explained, “The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives” (Marketing Library, 2010). As seen the revised definition of marketing takes into account the various elements and concepts related to marketing. The newer definition of marketing is one which provides a completely rounded explanation of marketing. Characteristics of Market Orientation: Market oriented organisations have a number of characteristics which include, a) Customer focus, b) Customer Orientation, c) Marketing Coordination & Integration, d) Long term focus and Survival, and e) Market Intelligence System (Drysdale, 1999). Companies that are market oriented will pay attention to the customers and the customer needs to a great extent along with a focus on the marketing coordination and integration (McCabe and Wolfe, 2000). There is also a high level of market intelligence system that the companies use. This is mainly to cater to the needs of the customers and the target markets. Elements of Marketing Concept: It is natural for people from different fields to define marketing in different words. However it is essential to note that marketing concept has a few set elements which come to play in every industry and every business. These include the following. Firstly, the company, i.e., what the company does and the purpose and vision of the company, this forms the first element of marketing for all companies. Secondly, the next element of marketing includes the customer, i.e. who the company targets and the target markets for the company (Jobber, 2004). The next element of marketing includes the collaborators of the company, i.e. individuals and companies like the suppliers, and people who complement the products and services of the company and the goods and services. The next major element of marketing includes the competitors. Here the company needs to evaluate and recognise all of the competitors and their positions in the markets (Kotler, et.al., 2002). This is an important aspect of marketing and this permits the company to evaluate their overall position in the markets. Finally, the context forms a major element of marketing as well, and it is here that the company can plan their strategies based on the business environment for the coming years (Evans, O’Maley, and Patterson, 2004). Here the company can use information from the industry as well and helps giving a complete outlook into the external environment for the company as well (Kotler, et.al., 2002). Benefits and Costs: The marketing process that is generally applied in companies involves a seven step process (Jobber, 2004). This includes, a) understanding the markets and the needs of the target markets, b) selecting the market segments based on the size of the markets and the various needs of the various parts of the markets, c) proper classification and description of the segments based on the individuals and the needs of the segments, d) Development of specific products and services to meet the needs, e) development of good communication of the products and services and the concept used to the targeted markets, f) good distribution of the product and services to ensure that the target markets and customers receive the products at convenient stores, and finally, g) gain feedback from the customer and make changes and improvements based on the needs of the customers (Jobber, 2004). Segmentation Targeting and Positioning: Marks and Spencer: Marks and Spencer is one of the top six retailers within the United Kingdom. The group was started way back in 1884. Then a small stall opened by Michael Marks. This stall grew to become Marks and Spencer Ltd Corporation by 1903, and has seen continuous growth since (M&S, 2010). Today Mark and Spencer is one of the leading retail stores in United Kingdom with over 21 million visitors visiting the stores each week. The company now operates out of almost 600 stores in UK and abroad and an expanding international business (M&S, 2010). The company provides a variety of products and is the leaders in the women’s wear and lingerie in UK, with a growing market for the men’s wear, kids wear, and the online business. The company provides high quality, excellent value clothing and home products along with the wide variety of outstanding quality food globally (M&S, 2010). Marks and Spencer has created a strong brand name for itself over the years and is now considered in the top ten retailers of United Kingdom. It is the largest clothes retailer in UK and as of 2007 had a market share of almost 11.1%. The numbers of stores that have been set up in UK and the international markets supports the strong market position (M&S, 2010). Micro and Macro Environment: It is essential to understand that all the strategies set by organizations are concerned with a number of different aspects like its own activities with the external environment, its resources, long term goals, and the values, expectations and goals of those influencing strategies. The company also has strong brand equity. It is recognized for the high quality products at reasonable prices. Also the high brand image in UK, as well as international markets is its biggest strengths. Apart from UK the company has shown growth in international markets as well. This has helped M&S to diversify and stabilize its business (Johnson & Scholes, 2004). Recommended Segments: The company deals with high priced products and the market segment that the company currently caters to is the office going staff. Considering two of the major areas that M&S deals with, i.e. Packaged foods and clothing for women, the segmentation criteria that the company can use here can follow the below criteria. Firstly, for the convenience foods, the target markets can include people who look for easier options for the foods and ‘easy to use’ options for the products and services (Aksel, 2007). Also the second segment that can be marketed here are people who are creative with their cooking and are looking for shortcuts and simpler means to use their talents. In the case of the clothing for women, the company requires to focus on the demographic groups between ages of 18-25 and need to focus on gaining complete knowledge of the buyer behaviour of these groups of individuals. Here it would be appropriate to use the term of ‘Loyalty Merchandising’ (Evans and Moutinho, 1999). This has been explained as, “Which means amongst other things that the purchase point suggests a group of values by which the existing or potential buyer chooses this store in the majority of occasions and feels sufficient trust in the establishment so as to be able to develop the role of recommender amongst his friends, neighbors, etc. Therefore the great challenge of loyalty merchandising consists in achieving the purchase point to be perceived as the best alternative, eliminating others from the process of choice and decision” (Martinez & Aguado, 2008). Target Markets and Buyer Behaviour: The target market for the company should include people between the ages of 18 to 25. It is important to note that M&S cater more specifically to women’s clothing and accessories and hence all marketing strategies needs to be based on these target segments. This has a major impact in terms of the choice of the marketing strategies and needs to be focused while developing marketing strategies for the company (Engel, Blackwell and Miniard, 1990). Having studied Marks and Spencer it has been noted that the company’s focus on customer relationship has been intense and the company is able to reach out to the younger audience by using the newer marketing techniques. The company has also been able to implement and provide higher levels of personalisation (Engel, Blackwell and Miniard, 1990). Personalization and customization preferences of the company have been found to be strong and well developed which in turn helps the respondents feel well treated and are more loyal to the company (Beasty, 2007). Extended Marketing Mix Sustaining Competitive Advantage: The choice of products has a major impact on the company and can have a major impact on the sustainability of the competitive advantage. In the case of M&S the company is currently performing well and has been able to sustain its competitive advantage in the markets over the years (Volpe, 2008). The most important element of the sustaining competitive advantage for an organisation is to ensure that the products and services meet the needs of the customers along with the competitive landscape and emerging technologies that the company operates within (Jobber, 2004). To be able to sustain the competitive advantage, the four P’s need to be concentrated upon and focused on rather than simply developing products and then finding the appropriate markets for them. Here in this case, the company improves its products and services based on the customer reviews and feedback and the company ensures that the products are based on the latest styles and trends thereby also meeting up with the competition (Jobber, 2004). Distribution: M&S concentrates on the distribution to a great extent. The company has developed strong distribution techniques and it ensures that the products are available to the customers in a very effective and efficient manner. The company provides the customers with excellent online shopping possibility and provides the customers with a chance to buy the products more easily and in effective manners (Johnson & Scholes, 2004). Prices and Market Position: In the case of M&S, the company prices its products at a relatively higher range however the customers do not mind buying from the company as the quality provided is relatively high and the perceived value of the products is also high (Dobni and Luffman, 2000). In terms of the pricing context and the processes, the company has a upper hand in the markets and customers from different segments prefer to use a M&S product for the level of quality. Promotions: M&S has dealt with the promotional aspect of the company to a great extent. It is clear that the company has been able to build high levels of awareness and a strong image of the company. Also there is clearly a high level of effective communication and integrated communication process that the company uses which in turn allows reaching out to a vast range of customers. The company currently uses a push strategy in the promotion and advertisements (Drysdale, 1999). Also, with the intensive use of the web as a marketing tool, the company has been able to expand itself and has been able to improve the overall reach of the promotional methods. M&S and Extended Marketing Mix: M&S has made very effective use of the extended marketing mix and has been able to develop the business more effectively as well. Apart from the four P’s of marketing, i.e. Price, product, promotion, place, the company also focuses highly on the extended marketing mix which includes people, processes and physical evidence (Kotler, 2002). This is clear from the face that the company’s product – service continuum has improved and there is a much wider range of products that the company deals with. Also the focus on physical evidence is great and the company has been able to develop the improved processes and the process management has been improved to a great extent. Market Segments and Contexts Recommendations to M&S: Based on the above study and the basic concepts of marketing, the aim here has been to build a ‘best practice’ or effective marketing strategy for Marks and Spencer Marketers. From the discussions listed above, the following are recommended to the M&S Marketers, to make their marketing initiatives, a success (Raaen, 2000). Firstly, make the customers feel that they are unique and make them realize that they are valuable to the company. Secondly a high level of focus should be on the queries and issues must be resolved promptly and in a friendly manner. M&S needs to also focus on personalization and database marketing can be utilized to its fullest potential in providing personalized services (Brown, 2000). Also, for M&S, information system should be customer centric and CRM applications should help the service provider to identify the most valuable customers. Finally another important aspect that the company needs to concentrate on is to identify the customers who are likely to switch, conduct a root cause analysis and make an effort to retain the customers by coming up with better offers for them (Brown, 2000). B2B vs. B2C Marketing: B2B B2C Marketing techniques used here is mostly relationship oriented The marketing techniques used here are more product driven and product oriented The aim used here is to maximize the value of the relationship The main aim here is to gain as much as possible from each transactions Target markets are focused and tend to be small The target markets here are normally large and wider than the B2B markets. The buying process is relatively much longer and the sales cycle is much longer Companies try to make the buying process short. The aim here is to simplify the process for the customers. The brand identity and the brand recognition is created on a more personal relationship Brand image, and perception is created based on the repetition and imagery and constant brand building processes. Companies use educational and awareness building activities here in this case The companies tend to concentrate much more on the merchandising and point of purchase activities in this case The business value impact the buying decisions of the company to a great extent. The buying decisions are based on status, desire or price and are mostly emotional buying decisions. (Murphy, 2007, Leopard, 2006) International Marketing vs. Domestic Marketing: The differences between the international marketing and domestic marketing are clear. These include: Context Domestic International Products Based on the needs of the domestic markets and the local tastes Here the companies tend to make different sets of products for different segments of the markets in different countries. Price Here the pricing is generally developed keeping in mind the different segments within the local markets and the country as a whole. Here the prices are based on the local prices of the markets that the company operates within. In a number of cases these prices tend to be much lower. For example the price that Microsoft sells the Office Suite software in USA is much higher than that in India. Promotions Here the markets need to concentrate on the promotional tools that will be useful in the lucrative segments. High focus needs to be made on the local needs and local promotional styles. Here the companies need to adapt to the foreign promotional tools and styles and the conditions. For example, the TV adverts for Coca Cola in US are often dubbed in Chinese for the local markets. Distribution Here the most appropriate channel of distribution is used to ensure that the costs are low as well as the distribution is effective. The companies require concentrating on the foreign governments and the channels of distribution in the different countries. Bibliography Aksel, S., 2007, ‘Minimizing Churn and Building Customer Profitability’, Customer Retention Forum, 30th January 2007, Beasty, C., 2007, ‘The Name of the Game: Personalization’, Customer Relationship Management, Insight, April 2007, p16-17 Brown, S.A., 2000, Customer Relationship Management: A Strategic Imperative in the World of E-Business, John Wiley and Sons, New York Dobni, C.B. and Luffman, G., 2000, ‘Implemeting Marketing Strategy through a Market Orientation’, Journal of Marketing Management, Vol. 16, p895-916 Drysdale, L., 1999, ‘Marketing or Market Orientation: What’s the Difference’, Prime Focus The Professional Journal for Australian Primary School Leaders April pp28-29 Engel, J.F., Blackwell, R.D. and Miniard, P.W., 1990, ‘Consumer Behaviour’, 6th edition, Orlando: The Dryden Press, a division of Holt, Rinehart and Winston, Inc. 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