Marketing is a mix of all activities which affect the alterations to possession of products or items. Many experts have defined marketing in different terms. Some believe that marketing is a complete system of relating business actions in order to plan, fix a price, promote or advertise the product or service and distribute it efficiently and effectively to the consumers or potential customers of the product or service. Yet other experts give a broader definition of marketing by stating that marketing is the function which creates and delivers the living standard to a community. Other experts have contributed their own idea by defining marketing as an art through which value of consumer goods or service is provided to the customers. Some refer marketing to just an art of selling products to the customers however, it is widely believed that selling a product is just a subpart of the complete process called marketing. To elaborate further, it can be said that marketing is a function which an organization undertakes to create, deliver and communicate not just the product but also value to the consumers. This process is all done to gain customer base, retain customers which in turn will benefit the shareholders of the business and the organization itself. Marketing is basically a consumer biased conception and is utilized to satisfy at hand and possible customers in order to meet the objectives of an organization.
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In today’s world, no business organization, be it a multinational business group or not for profit organization, can manage to sustain without effective marketing. Along with other business functions of an organization e.g. financial, accounting, operational etc, the economic triumph of an organization is largely dependent on function of marketing. The contribution of marketing to the success of a business organization cannot be undermined. A company which develops an excellent product with state of the art features, outstanding quality and best packing but does not spread awareness of the products to its potential customers is always at a loss. As no one would know about the product, no one would buy it and therefore the company would be deprived of the sale and hence the profit which it aspires to make. That’s where marketing process comes in. It can therefore be deduced that the primary function of marketing process is to develop awareness of the products and services among the potential consumers and sustain customers through offering of value added services. With the help of the process of marketing, the consumers become more knowledgeable about the merchandise or service presented by the corporate organization and the organization in turn gets to increase sale and make surplus.
Due to the intense competition in the market, a product or a service is offered to the consumers by multiple businesses. On what grounds do the product or service provided by one organization is different from the one provided by other organization, what are the qualities of the product or service that make it superior to those being offered by other businesses and why should customer buy the product from one business organization and not from the other are the kinds of goals which can be achieved by marketing intelligently. Intelligent marketing process therefore, enables a business organization to make new customers, retain customers, capture maximum share of the market and enhance the trust of brand name. Due to such profound effects of marketing on business organizations, most of the firms have created a post for a marketing officer equal in rank to chief financial officer or chief maintenance officer. The growth of an organization, retention of market share and retention of customers are the biggest challenges faced by an organization all of which are affected by how the organization carries its strategy regarding marketing.
The external factors which affect the marketing strategy of an organization are numerous. Firstly, the demographic of the market greatly influence the marketing strategy of an organization. The business can monitor the buying habits of the customers and modify the plan according to the changing demographics. Secondly, competitors operating in the target market are another factor which influences the marketing plan. The business needs to monitor the operating principles of the competitors and determine the basis on which they are competition. A thorough study of this is required to formulate an effective marketing plan. Thirdly, the suppliers and distributors in the operating area are also a big influence on the marketing plan of an organization. Too few suppliers mean inconsistent behavior and problems for businesses. Fourthly, government rules and regulations which are implement for the safety and protection of the customers may vary from place to place. Therefore a different marketing strategy is required for every place the government has implemented a new regulation. Fifthly, the health of economy of the region also has profound effect on the marketing strategy of an organization. With the rise in inflation and unemployment, customers tend to spend only on necessities, thus requiring a modified marketing plan with attractive prices and value for the customers. Lastly, technology and media affect the way organizations practice their marketing strategy. The ever changing technology being introduced in the communities changes the buying patterns of the customers profoundly. Similarly, effective utilization of media can change the perception of a consumer regarding how an organization operates. Therefore careful planning and execution of marketing process is required to gain benefit from intrusion of technology and media into the daily lives of the customers.
It has been a general perception in the not for profit organizations that spending on marketing is a waste of time and resources. However, most of the studies have shown it to be otherwise. In the event of not for profit organization opting to go for marketing, they are making people aware of their cause and manifesto. Similar to for profit organizations who tell the customers about hazards of not providing dairy food to their children and in consequence end up selling their dairy products, the not for profit organizations can also advertise their cause e.g charity for disabled in an effective manner to gain sympathies of the society and raise funds for the cause. However, by just advertising the cause on media is not enough to gain attention of the community. An effective marketing strategy would hire services of established and reliable news sources in order to convince the community of their legitimacy and sincerity. Marketing process actually gets the organization’s image; be it profit or non profit, into people’s minds. Ample amount of information is required to be advertised by the organization to make a positive impact in the minds of the customers. This does not mean that not for profit organizations start spending more than they can afford, it only means that they must devise a marketing strategy to find out the cheapest and most effective ways to advertise and get their message across the community as efficiently as possible.
As already explained, marketing is a process to create, deliver and communicate not just the product but also value to the consumers. All these and many more activities e.g advertising, branding, and pricing are undertaken in marketing process however, there are few critical elements which play a vital role in the success of marketing process. They are research, strategy, planning and tactics. In order to launch a business into a new market, research has to be done to evaluate the needs to customers, their preferences and the opportunities in the region. Similarly, research has also to be done to in order to find out the how the organization could convey it message to the customers in most effective manner. This may entail the use to correct medium and positioning to hit the required market segment. Having acquired all the data regarding the market position and strengths and weaknesses of the organization, the next step in the marketing process is to chalk out an effective strategy. This action plan will depict the vision, mission and objectives of the organization and how it wants to operate in the market. The next crucial element of marketing process is the planning part in which the marketing planning is done by the organization in order to achieve the laid down objectives of the company. This includes but is not restricted to financial, sales and production planning. After completing the phase of planning, the organization involves itself in the area of implementing tactics which are small action plans to achieve long-term goals of the company. Reduction in prices of the products for limited time duration is considered a promotional tactic.
Principles of Marketing
Marketing mix comprises the marketing elements and the role played by each element in order to promote the product or the service till its delivery to the existing or potential customers. The elements of marketing mix comprise of marketing’s 5Ps. For quite sometimes, researchers have been using 4Ps as elements of marketing mix however; recently, 5th P has also been added in the group. The 5Ps of marketing mix are product, price, place, promotion and people. Product refers to the item or service sold by the organization, its attributes and how it differs from the ones sold by the competitors. Price refers to the cost of the item or service and how competitive it is compared to the competitors. Place refers to the area where the product is being sold whereas promotion refers to the means used by the organization to promote the product of service. Lastly, people are the workforce of the company and encompass their attributes and skill levels.
Market segmentation can be done in different basis: on the basis of geographical location and on the basis of demography which includes segmentation on the basis of age, income, gender, occupation, education and attitude. Through geographical segmentation, organizations divide their business into sub-units which operate in different areas and offer services according to local culture. In demographic segmentation, people are divided into age groups-with a belief that same aged people depict a similar behavior, into income groups with a view that same income group people have similar spending habits, into educational groups with a view that people with similar kind of education will have same preferences etc. Market segmenting is reviewed periodically by the businesses in order to determine new segments and target them according to their needs.
Market segmentation has many benefits for the business organization. One of the most important is stronger positioning. Through segmentation, the organization is better able to create a positive perception in the minds of its customers. Improved Efficiency is another benefit of market segmentation. Efficiency is marketing can be achieved by only focusing on the majority of target customers instead giving a general message through a paid content. Yet another benefit of market segmentation is that it helps the organization gain competitive advantage. By carefully segmenting the market, a business can offer customized products and services to each segment of customers. Targeted Media is another benefit which a company enjoys due to segmentation. Due to narrow segments, the organization is able to choose correct medium to approach them in order to deliver their message efficiently and effectively.
According to experts, there are four basic methods of market research: qualitative, quantitative, ethnographic and experimental techniques. The two methods are based on the process of questioning whereas the other two researches are carried out through observation. Qualitative method is basically used to explore a small population of respondents e.g focus groups, through interviews or questionnaire whereas, qualitative methods are used in order to describe results or analysis a precise theory. Through ethnographic studies, the researchers observe a group at one time or for extended time periods in order to find out a certain social behavior in the group. Experimental techniques are used by researchers through creation of an artificial environment and then varying one or more factors to get the desired result.
The intrusion of Technology has had a great impact on the today’s marketing practices. Internet has changed the buying pattern of the people and has influence how a product is promoted to the customers. Extranets are also additional tools which allow the customers to gain access to the internal web services of a company through which organizations are gaining customer loyalty. Similarly, internet has also proven to be great tool for customers in checking the prices and comparing them with other business organizations. Now the customers can do shopping at home with just a few clicks. Technology has also helped the organizations in keeping up with the preferences of the customers through online polls, surveys and segmentation. Technology has played wonders in the field of the way businesses promote their products. From advertising to selling the product, everything can be done online now which has increased the customer base and reduced costs of promotion.
Applications of Marketing Mix
Apple Iphone 5 has taken the market by storm. Its sleek, it’s beautiful and very expensive. However, Apple has still generated millions of dollars in sales in a very short period of time. The obsession of Apple with making high quality products come with a price tag. They tend to target customers with a little extra money to expend on technology. Therefore segment of people who buy Apple good income grouped.
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Positioning is a concept related to the idea that a business endeavors to build an image of its product or service in the minds of the segmented target market. Effective positioning of the item entails a process which includes identifying the target market, identifying the product space or attributes, gathering data from customers regarding their perception about the attributes of the product, analyze current position of the product in market, analyze the correct combination of attributes preferred by customers (ideal vector) and positioning the product as close to ideal vector as possible.
Businesses can distribute their products in the market using direct or indirect channels. Indirect channels are utilized by such businesses that do not trade with the customers directly. This type of channel is used by manufacturers and suppliers of the product. On the other hand, direct channel is utilized by businesses which trade with the customers directly. Due to intrusion of internet, companies are now directly in touch with their customers and tend to avoid indirect channels.
Pricing a product is an important element of marketing mix. Different strategies are employed by the businesses to set a price for their products which they want to introduce into the target market. A patented innovation, when introduced in the market needs to be prices to skim the market or penetrate the market. If skimming is the idea behind pricing, the initial price of the product is kept very high to target specific segment of the market and to recover costs on innovation. However, if penetration is the idea behind the pricing, the prices are kept to an affordable level to target larger market segment.
Promotion is another important element of market mix and is used to build an image of the brand in the minds of the customer. Different strategies are utilized by the organizations to promote the product which include: selling personally- e.g through salesperson, advertising e.g newspaper, magazines, journals and internet, promotions for the customers e.g cash back, low prices for a limited periods, loyalty cards etc, direct marketing e.g directly contacting the customer on internet and communication through print media e.g printed broachers etc.
Marketing Plan for Chocolates
As the holiday season of Christmas and New Year is approaching, the company intends to market its chocolate product with renewed vigor and increase customer base. The aims and objectives of this plan include increase in the number of loyal customers by 3% and increase in sales of chocolates by 5%. The target market for this activity would be mainly families with children between the age of five and fifteen. A larger age bracket of children is kept keeping in mind the liking of all children for sweet products e.g. chocolates. A number of macro and micro environmental factors were analyzed in the market research in order to determine the strengths, weaknesses, opportunities and threats to the marketing plan. According to this analysis, the organization exports its products in more than eight countries worldwide, its sales exceed $8 million dollars annually, the business publishes its own cook book which narrates different methods of using chocolate, the company is brand leader in Asian states. On the other hand, rising inflation in the region, sharp decline of sales in the market and health concerns of the customers regarding consumption of chocolate are areas of concern for the company. In the backdrop of these analyses, the organization aspires to take full advantage of upcoming holiday season, increase cocoa production and do away with health risks by producing organic chocolate. In the same context, the company faces a few challenges from competitors present in the local market due to increase in gas prices and environment friendly regulations of the government, thus forcing the business to invest more for the protection of eco system. As for marketing mix, the marketing department plans to generate a new packing for the chocolate which is more attractive and easy to peel. A reduction of price by 10% is also recommended for this batch to production in order to attract more sales. The product will be sold at all the convenient stores, supermarkets, discount stores, vending machines and near the cash register of every store in town. A special 20 sec commercial has been produced to promote the new product along with printing of posters, ad campaigns and advertisements on the internet gift sites. Special training has also to be imparted to the employees working at the manufacturing and packaging facilities in order to produce the item with no backfires.
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