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MARKETING -The Basics |
MARKETING operates in a dynamic and complex environment and it is the task of the organisation to link resources of the company to the requirements of the customer. So marketing is often defined: "as the identification and satisfaction of a customer need -profitably".
Other definitions of the term see marketing as the "management process responsible for identifying, anticipating and satisfying customer requirements profitably". Marketing aims to design and develop the right product and make it available to the right people, at the right time and place at an acceptable price. I give my views that marketing is the art of satisfying the " Rights":
....this is linked to Philip Kotler's 4P's assessment of Price, Place, Promotion, Product. This as been added to with 3 other 'P's': Physical evidence, People, and Process
(The Marketing is Core is based around: Segmentation, Target, Positioning.....The STP of Marketing)
PEOPLE must be seen as a key contributor to the success of any organisation. Products can be replicated or modified, people are unique and cannot be and thus service of the customer ('Customer Service') can often play a major part in the success of an organisation's marketing strategy and repeat 'business.
What does Marketing involve?
It is more than just selling!
Need, Wants, Demands
Marketing at the early stage is concerned with finding a 'Need'. The organisation must find this and supply the 'answer' to the need. The organisation must than satisfy this need and then create 'extra' needs.
For example British Telecommunications are aware their customers want to communicate and thus supply good quality system's and lines. BT also promote the extra benefit gained from either having an answering machine or second line and promote these by 'creating' needs and thus promoting on the 'added value' effect. Travel agents are the same.
They are aware the need of their customers are for a holiday/break from the norm and thus satisfy this need through a holiday package and 'value' price. They create a need for 'upgrading' or insurance.
Wants are desires for specific satisfaction of the need. Demands are wants for specific products, they are backed by an ability to purchase them
For example:
|
NEED |
Hunger |
|
WANTS |
Hot Meal |
|
DEMANDS |
McDonald's Big Mac |
Generally there are three types of product:
Tangible goods and services (physical goods), services and dreams/ideas. The product offering is a three-stage process:
Core Benefit/Service
\/
Actual product (i.e. brand, packaging)
\/
Augmented Product (anything done to the product should add value to it)
Another analysis of Product offering is shown in the following table:
|
Offering |
Dimensions |
Decision |
|
Core |
Generic |
Product Attribute |
|
Tangible |
Sensual |
Product Benefit |
|
Augmented |
Extended |
Marketing support systems |
Core: is the actual product giving the marketer something to market
Tangible: is a collection of several factors including brand name, styling
Augmented: is the term associated with the 'support' sales. Including delivery, credit, warranty
***Whatever is done at any of the above stages must support each level and 'add-value' to the product. It can also help to differentiate the product and position it away from 'like' products/services.
An example of this. Car dealers all essentially offer the same core product, but they motivate purchase through adding value to the tangible and augmented stages. They may offer free air conditioning and zero percent finance ***
There are many 'environmental levels' to marketing.
INTRA FIRM, looks at things such as Human resources, finance, research and development...and is concerned
MICRO, includes audits on suppliers, customers and competitors
MACRO, looks at the PEST factors of Political, Economic, Socio-cultural and Technological, all external to the organisation/firm
***The importance of environmental trends and changes means that it is important for the planner to appraise or 'scan' the environment. To be effective a systematic framework must be used***
Relationship Marketing
Evert Gummesson extended the notion of the 4P's into the 30R's and saw that marketing had shifted from Kotler's P's strategy. Marketing is more centred around customers and is becoming less mass marketed and less manipulative. Relationship Marketing examines that marketing over the last 20 years as significantly changed to become more relationship, network and interaction focused.
"RM offers a road to improved customer retention, but also long term relationships...when used with skills, leads to enhanced revenue, reduced cost and improved financial performance" (Gummesson, 1999)
The fundamental values in RM are:
-Long term collaboration and win-win
-Recognising that all parties be active
-Relationship and service values instead of bureaucratic-legal values
Essential requirements of marketing
Marketing Management
-an attitude to debate and resolve issues
-responsibility for achieving desired results
-dealing with risks and uncertainty
Marketing Ethics
In the past marketing as not been seen as an art form and often regarded unethical. People believed that through marketing companies could create a customer need to exploit the customer through selling them the product to satisfy the need.
Marketing as evolved into a more market (customer) focused business unit, where the customer is now a coefficient of product development and that the customer is central to the thoughts of the marketer.
The transition from Kotler's 4P's to Gummerson's Relationship marketing often shows that marketing as become more customer orientated. Whatever the business, it needs to make informed ethical decisions often based around the morality debate! It is believed that some businesses reap rewards through this 'moral/ethical-stance).
Ethical issues effect: customers, suppliers, competitors, workers, the environment and the local community. "Marketers must accept responsibility for their activities...serve and satisfy all relevant publics...not knowingly do harm...being honest" (AMA)
(please read my marketing ethics assignment here)
Some challenges facing marketers
How marketing as evolved (In essence the Paradigm shift)
|
From |
To |
|
4P's supported by Relationship marketing |
Relationship marketing supported by the 4P's |
|
Goal/Task directed |
Vision directed |
|
Production and selling orientated |
Value and consumer focused |
|
Service provider |
Solution provider |
|
Shareholder focused |
Stakeholder focused |
|
Structure, stable, rigid |
Innovative, imaginative, flexible |
|
Hierarchically |
Networked |
|
Reactive |
Proactive, learning |
|
Exclusive |
Inclusive |
|
Bureaucracy |
Adhocracy |
|
National |
Global |
|
Product-orientated (product-led, give the market what the company wants) |
Market-orientated (consumer-led, give the market what the consumer wants) |
|
Selling |
Promoting, instructive |
|
Shock tactics ('if x was to happen what would you do') |
Informing of benefits tactics |
|
Push strategies |
Pull strategies (aimed at motivating consumers) |
|
Resource drain |
Resource maximisation |
|
'Micky-mouse' view |
Professional Status |
|
Mass marketing |
'Niche-find' marketing (understands that consumers needs, wants and desires are different) |
|
Respond to change |
Drivers of change |
|
Marketing mix (4P's) based |
Relationship/interaction based |
Marketing is applicable to any organisation of any size irrespective of corporate goals, function, profit or non-profit, product or service based. The organisation these days need to be customer-led rather than product-led. Marketing products and services is complex, dealing with many different types of customers (buys the product) and consumers (uses the product) and these can often be retail/domestic and trade customers. Customers have very different needs and thus marketing is the art of satisfying this need. Often to a new level and positioned greater than the competitor offering. Marketing is "the identification and satisfaction of a customer need -profitably".
© thisisthebarmyarmy.co.uk, 2007