The process of Planning and Executing the Conception - Essay Example

ABSTRACT This paper discusses Marketing and its overview, marketing concept and strategies. It aims to discuss the following: 1. Major advantages of the marketing concept 2. The key benefits of Michael Porter’s strategies 3. The difference between differentiation and segmentation. The American Marketing Association (AMA) defines Marketing as: “The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods or services to create exchanges that will satisfy individual and organizational objectives.” This definition focuses attention on the behavior of an organization and how it generates value for customers. It affects all organizational functions, whether the business is concerned with fast-moving consumer goods or services, industrial or business-to-business marketing. It shows that marketing is a complicated process that involves many different people and organization. Marketing does not simply focus on selling and advertising. It is an approach that seeks to uncover what the customer requires and to convert this knowledge into products that are distributed and promoted in ways that will provide for the satisfaction of all concerned. MARKETING CONCEPT It is important to look more closely at the core concepts or basic elements. It can be identified as: 1. Needs and Wants A need is a deprivation of some basic satisfaction, for example the need for food, shelter, clothing and belonging. Wants, on the other hand, are for specific items that can satisfy those needs, so that an individual may need to eat, but wants to consume either a certain type of food, or to eat at a certain restaurant. Unlike needs, which are a basic feature of all human society, wants are shaped by social forces and are influenced by such things as the peer group, the media and the business and political system. 2. Products Products are anything offered to an individual to satisfy a need or want – including intangibles such as services. Services are provided by persons, places, activities, organizations or ideas, and can be delivered through physical objects such as an aircraft that provides transportation. The term product can cover anything capable of delivering the satisfaction of a want or need, which is an important consideration as many firms may be tempted to concentrate on tangible products rather than services or benefits those products provide. This is marketing myopia, a failure to recognize the scope of the business through focusing too narrowly on the product. 2. Value and Satisfaction Marketers will have to face up to this issue if the successful sale of a product that satisfies a particular need or want is to be realized. All consumers have a series of alternatives to choose from, but this is best understood by looking at the value derived from the use of a product that satisfies a set of goals. 3. Exchange utility and transaction For marketing to come into its own, an understanding of needs, wants and value is not enough. Exchange is the act of acquiring a product by offering something in return. Each party must, therefore, possess something of value that the other desires. The objective of marketing exchange is to receive something that is desired more than that which is given up. This concept focuses attention to customer satisfaction. 4. Markets All those customers who share a common need and want, and who are in a position to engage in exchange to satisfy that need or want, constitute the market. MARKETING STRATEGY Strategy is defined as the way in which the objectives are achieved. A marketing strategy is a long term plan which is designed to meet the company’s marketing objectives. The importance of strategy is that it relies primarily on clearly stated marketing objectives, and once the strategy is defined and made clear to the marketing team, it must be carefully researched. The implementation of the strategy is carried out using the 4P’s: product, price, place and promotion. The work of Michael Porter on competitive advantage, for businesses and even for countries, has had a great impact on managers and politicians over the past several years. He is currently the most influential business academic. His worked emerged at a key point in the development of United States industry. The growing success of Japan in penetrating export markets created a desire for new understanding of the nature of competition. Porter offered a series of business tools which managers could employ to analyze their own company and its competitive environment. Then devise a strategy for success. He recommends that companies should adopt a strategy which includes: Selling to the most sophisticated and demanding buyers Seeking out buyers with the most difficult needs Establishing norms of exceeding the toughest regulatory hurdles or product standards Sourcing from the most advanced and international home-based suppliers Treating employees as permanent instead of using a demoralizing hire-and-fire approach Establishing outstanding competitors as motivators. There are also 3 generic strategies which Porter has developed in which a firm can select in developing a portfolio strategy, these are: Cost leadership strategy is based on achieving a low-cost production. This is normally associated with high-volume output, whereby economies of scale, experience and learning curve factors result in cost reductions. Experience curve economies result from the firm’s increased experience in managing its functional activities. Learning curve economies are result of workers becoming more efficient and effective as they learn from their mistakes over time, and hence increase their productivity. Differentiation strategy involves differentiating the firm’s products or services so they will be perceived as being unique in quality, brand or some other feature. The firm is then I a position to market the products at a higher than average price. Focus strategy involves concentrating on a small market, product or geographic segment. The firm’s efforts and resources are focused on serving a particular customer group, and it does not compete on an industry-wide basis. It would be nice to think that businesses carefully evaluate the marketing environment and then devise a strategy that fits in with overall company objectives. In reality, the strategy may be imposed by management, shareholders or even circumstances. In some instances, the only business objectives may be survival. Strategy may then be reduced to crisis management. The other reality is that the business environment is not always clear and logical so it may be very difficult to generate realistic and effective strategies. SEGMENTATION AND DIFFERENTIATION Segmentation frequently occurs when there is an obvious subdivision of the type of customer who buys the product. The railway companies are good examples of businesses which have responded to this by selling the same product to different customers at different times of the day for different prices. Market segmentation results from the isolation of factors that distinguish a certain group of consumers from the overall market. The four commonly used bases for segmenting consumer markets are: 1. Geographic segmentation – is the dividing of an overall market into homogenous groups on the basis of population location. 2. Demographic segmentation – is the division of consumer groups according to demographic variables such as age, sex, income, occupation, education, household size, life style and stage in the family life cycle. 3. Psychographic segmentation – is generally defined as the development of psychological profiles of different consumers, derived from the responses of people asked to agree or disagree with certain statements. 4. Benefit segmentation – focuses on the attributes such as product usage rates and the benefits derived from a product. In other word, it is the division of a market according to the benefits the consumer wants from the product. Differentiation is defined as one or more product attributes that make one product different from another. It may or may not be favorable, and thus constitute a differential advantage. Differential advantage is the element or factor in a firm’s product or strategy which makes it a cut above the competitor. CONCLUSION Marketing is a major part of business activity; thus it is essential knowledge for everyone who wants to understand the world of business. It is an important cultural influence in our society. It finances many worthwhile events and services through contributions and advertising. Marketing is responsible for a business’ revenue generation. Without marketing, a business would cease to exist. It lies at the heart of every successful business. Even firms without marketing department have to be focused upon their customers if they are to succeed. It would be wrong to see marketing as purely passive, though. Marketing managers know they must respond to consumer tastes, but the exceptional delight in persuading people to buy what they do not need, or even want. Perhaps because marketing activities are so visible to all of us, in the form of promotional campaigns, market research and new product development, there is a tendency to assume that we all understand it intuitively. Nearly all of us know someone involved in marketing and we have some sense that it involves sales, promotions and advertising. However, the “true” nature of marketing and its significance in not so well known. People often have a limited view of marketing activities and does not always appreciate the way in which within successful organizations, the philosophy of marketing is part of every aspect of the business. REFERENCES Marcousse, A.Gillespie, B. Martin, M. Surridge and N. Wall. Business Studies. UK: Hodder & Stoughton, 2003. Marjorie Cooper. Introduction to Marketing. UK: NTC Publishing Group, 1996. Maxim Clark. The Bear Necessities and Business. New Jersey: John Wyley and son, Inc., 2006 Ian Swift. Marketing. UK: Hodder & Stoughton, 2000 Read More