New Era Of Societal Marketing Concept Marketing Essay

New Era Of Societal Marketing Concept Marketing Essay Before the new era of societal marketing concept, this is where by people involves in farming to feed themselves and family. All the agricultural crops or food generated was not for sale but some of the output was bartered (i.e. subsistence economy or subsistence farming). The benefit of subsistence economy creates enough food for its people but there is no surplus food so that no food will be wasted. Marketing started during the mass production of goods and services which is called the production era. What led to production era is scarcity or access demand of products and this make firms to measured their success by involving in mass production because its reduces cost of production and increases profitability. The second marketing era is known as Sale era, this is the generating of income for the firm or business. This was during 1950s where there was excess of supply of product in the market and it was too much for what the market demanded for. To make consumer to buy the excess product supplied. Firms involve in using a variety of selling techniques and promotional techniques to inform potential customers to buy their products, by way of advertising and skilful personal selling in order to convert products to cash. The benefit to firm is that it generates income to the business while to the consumers they buy in lower price. Market era is the third era; this is the understanding of the prospective buyers after the Second World War. So many firms or industries were destroyed in other countries, except for that in the United State. Firms found it easy to sell their products because there was little competition, during these period businesses realised they could produce new product in different ways to satisfy customers need and want. To do this firms change their thinking from that of manufacturing products to that of satisfying customers, for them to be able to produce the right products to the market in a low price and also to reduce cost of production. Marketing era is the fourth era; this is where by every activities of an organisation must revolve around customer. To do this some company set up operating policy, technical research, to provide quality products and services to their customers. Also to reduce prices of their product and increase customer value, these enable organisation to satisfy their customers by meeting the marketing concept. http://www.answers.com/topic/subsistence-farming29/12/2009 http://www.answers.com/topic/marketing#Marketing_orientations 29/12/2009 Consumers are often referred to as the king. Explain this statement from notable marketing definitions and concepts. Consumers are often referred to as a king because without them business or organisation wouldnt be able to survive or exist. Marketing definitions that talks about consumers are: Marketing is the management process that identifies, anticipates and satisfies customers requirements profitably. By The Chartered Institute of marketing. This definition talk about how marketer strives to know what consumers wants are by acting on it to bring the wants to their door steps to please them. Marketing is the human activity directed at satisfying human needs and wants through an exchange process. By Philip Kotler. Marketing is essentially about marshalling the resources of an organisation so that they meet the changing needs of the customer on whom the organisation depends. By Palmer Marketing is the implementation of marketing concept (in the 1990s) requires attention to three basic elements of the marketing concept. These are: customer orientation; an organisation to implement a customer orientation; long range customer and societal welfare. By Cohen. Marketing is the whole business seen from the customers point of view. By Drucker. http://www.marketingteacher.com/Lessons/lesson_what_is_marketing.htm 29/12/2009 Question 2 Every marketing organisation operates in a complex and dynamic business environment. Identify and explain various micro and macro environmental variables affecting marketing companies in United Kingdom. Business environment entails all factors affecting business positively and negatively. This can be classified as controllable environmental factors (i.e. internal environment) and Uncontrollable environmental factors (i.e. external environment). Under external environment we have immediate external and general external. All these factors determine the success of a business as far the organisation is able to manage the internal environment and adapt to the changes of any external environmental factors. Internal environmental factors are: Employees Shareholders Company policy Employees For an organisation to be successful employees play a vital role to enable firm achieve their goals and also firms need to empower the employees to make them perform their duties. Employees in UK may affect marketing companies positively or negatively. For instance, if a marketing company employed the right staff. Involves in training and development of these staff on how to render service to a customer these may be a good impact on the firm because the moment customer is satisfy with the service render these might encourage him or her to come back again. This could be an edge over its competitors. If an employee is not motivated, lack training and development these may be a negative impact on the organisation and it could lead to low sales. Shareholders The UK shareholders may affect marketing company by pressurising or forcing them to change their organisations strategy from satisfying customers and focus on profits. In doing these, the organisation may involve in a new tactics like pricing strategy to make more profit. In a competitive market where the market determines the price like in UK, this could lead to organisation failure. Company policy This is a lay down procedure to guide staff on how best to operate in an organisation, in order to make firms achieve their objectives. In a situation where by the company policy is not well layout to guide the staff on what to do, these may affect marketing company not to achieve their objectives. Immediate external environmental factors are: Customers Competitors Supplier Customers factors Every marketing organisation that is profit oriented definitely depends on it customers for success. In any marketing company, customers are very crucial because without them businesses wont be able to survive. Customers in UK may affect marketing organisation either positively or negatively. For example if the government increase the tax and national insurance charges this may affect the customers spending power and it could affect marketing sales because consumers will have less money to spend on their commodities. It also slow down business sales and reduce their profits. In the other hand, if there is decrease in tax and national insurance. This will favour the marketing organisation and customers. Customers spending power will increase because they have more money to spend on their commodities. However, customers need to be respected, given good services, quality products, build up long term relationship with them, listen to their complains, art fast on their complains and provide value for their money to enable them come back again. Any marketing company who is able to provide all these will be successful. Competitors factors This is where by marketing organisations compete with each other in terms of price, quality products, customer services etc. to enable them be in business. UK government uses these forces to checkmate prices of products. They allow competition because if there is a lot of marketing company, these will make price of products to be control by the market and not by the competitors. This is affecting marketing organisation because they are unable to fix price on their products due to many competitors. Suppliers factors Suppliers effect to a marketing organisation cannot be over looked. If there is sudden increase on prices of raw material, they may be force to push up their prices and these may affect organisation marketing strategy by forcing them to raise their products price and it could slow down sales because not every consumer will be able to adapt to the changes in price immediately. Also delayed payment of suppliers or lack of good relationship may affect quick delivering of goods to the marketing companies and it could make customers not to rely on them anymore. General external environmental factors are: The general external forces are factors that are beyond the firms or businesses direct control. Political Economic Socio-cultural Technological Political factors These are factors that affect businesses and the spending power of the consumers through taxation, legislation etc. UK government can influence businesses positively by reducing the corporation tax and indirect tax charges (i.e. the profits of business and VAT charges on some products) to enable firms make more profits and expand, this could lead firms to reduce their products prices as well for the benefit of the consumer. Also they can influence consumers positively by cutting down tax charges on their income earn to allow them have more money to spend on their commodities or wants. The increase on direct and indirect tax this make business to increase their products prices as well and it also decreases the business profits because not every individual will be able to afford the products. However, consumers may find it very difficult to buy their wants because of the high price of products and high charges on their income earned. Laws made by UK government could affect businesses in so many ways. For example if government increase the minimum wage this could affect them, if they are unable to meet the increase in minimum wage. It may lead to some of the staff retrenched and also they may increase their products prices for them to be in business. Economic factors Marketing companies need to look into UK economy in the short and long terms before planning and also look for ways of adapting to any changes in the future such as changes in income, population, gross domestic profit, exchange rate, inflation rate and climate etc. Currently the marketing companies in UK experience climate change which really affect sales because so many people was unable to go out to do their shopping due to bad weather condition (i.e. snow). Also changes in consumers income might affect marketing companys sales as well. For example, if government increases taxes on income these will affect the purchasing power of consumers because they have limited amount of money to spend on their commodities and these will reduces market organisation sales and profits. Technological factors Marketing companies in UK who wants to dominate the market or compete with competitors should be able to adapt to the new technology. For example, car company as advance in technology by providing consumer a good cars, such as automatic and computerised cars. As we all know that the era of manual cars is going gradually because of advancement in technology. If there is any car companies who are unable to adapt to the new technology these may affect it cars sales in the market because of lack of technology. Also technology have enable car companies to sell their cars via internet, paying by bank card and advertising through the internet which is an opportunities to them to sell more cars and increase profitability. Social-cultural factors This looks into some factors such as lifestyle changing, culture, beliefs, value and geographical differences that may affect any organisations. In a marketing organisation where by the lifestyle of consumers changes due to low income earn these may affect marketing company because consumer would like to change some of his or her product to a lower price once in order to manage its income perfectly to its needs or wants. This may be a threat to the manufacturing of the product left and an opportunity to the product consumer change to. Understanding any market requires a thorough classification by segments. Identify and explain various basis of market segmentation by proposing the segmentation criteria that can be used for two products in different markets. Many market organisation use different criteria to segment their product to a particular market, such as: Demographical segmentation Geographical segmentation Benefit segmentation Demographical segmentation This is where by market is been divided into groups based on factors such as age, income, social class grouping, family size, lifestyle, gender and family life cycle. By proposing a social class segmentation criteria that can be used for two products such as motor cars and clothing, a marketers would like to look into the social status and occupation of individual to enable them provide a variety of cars that will satisfy the upper middle class, middle class, lower middle class, skilled working class, working class and those at the lowest level of subsistence by providing them cars that they will be able to afford. This helps marketers to know where to locate their shop site or operate their business because individual in these category live in a different areas that suit each group. Social class segmentation table Grade social status occupation % of UK population A Upper middle class Higher managerial or professional 10% (Company directors, lawyers) B middle class middle managerial or professional 15% (Managers, nurses, teachers) C1 lower middle class supervisory or clerical (shop assistants) 26% C2 skilled working class skilled manual workers (technicians) 17% D working class semi-skilled unskilled manual worker 20% E Those at the lowest lowest grade workers 12% Level of subsistence (casual workers, state pensioners) Age is another factor of segmentation criteria used for product like cloths This is where by market organisation display their product design and packaging to meet the wants of different groups according to age differentiation of consumers. While some marketers may focus on one particular age group (e.g. mother care shops) only focus on baby things nothing else. In terms of cloths, manufacturer produces cloth of different sizes, different quality and different texture to meet the taste of customers. This enable marketer to reach their customers by locating their shops close to them, also these determine the prices of product like cloth they sell in rich people area and poor people area as well. Geographical segmentation This is a process of identifying consumers according to the area where they live such as villages, city, regions, and countries. Also to look into their climate condition if it will be favourable or profitable for their product. Any marketing organisation that is into multi-national and global business involves in some programme activities that will advertise and promote its products to meet the needs of individual geographic units. Climate In most African countries the weather condition is very hot and these enable car companies to produce cars that will suit the needs of their consumers in that very geographic units, by providing them cars that will acclimatize to the countries climate (i.e. by putting air-condition) to make their customers feel comfortable when driving or inside the car. Most of these African countries use a left hand drive cars, so any car companies who want to supply it product to these geographic unit should be able to provide them what they really wanted for the purpose of making profits. Countries Cloth companies produce cloths that will suit the benefit of consumers according to their geographic unit because each country has their own culture and traditional wears. Like in India, the cloth they produce wont sell in United Kingdom due to their different believes. Benefit segmentation This may be used by organisation such as car companies to develop a range of products by segmenting the market through benefit that consumers find from product. For example, some people will be interested in safety, others in load space or performance. Cars companies develop ranges of products to please these different segments and also to promote the product in different ways to the different groups. http://tutor2u.net/business/marketing/segmentation_bases_geographic.asp 12/01/2010 http://tutor2u.net/business/marketing/segmentation_bases_demographic.asp 12/01/2010 Question 3 Explain product life cycle with a typical diagram and identify characteristics and essential strategies for survival of each stage of the life cycle. Definition of product life cycle Product life cycle is the process of improving a product over time through redesigning or replacing old version of product. Adopted from: http://www.marketingteacher.com/Lessons/lesson_plc.htm 2/1/2010 Introduction stage At this stage an organisation may involve in promotion to create awareness to the general public or target market about the new product. For instance, if the product has no or few competitors, a skimming pricing strategy may be used or penetration pricing may be employed to attract customers to buy the product. The level of distribution is limited, at these level sales is low because the product is new to the market. Growth stage This is where by competitors are attracted to the market with similar products because consumers has realised the benefit or usefulness of the product. Sales are growing rapidly and the cost of production per unit is falling (i.e. economies of scale). The product now becomes more profitable and the spending on advertising is high to focus upon the building brand. Because competitors are growing, the firm may still keep to penetration pricing strategy or push up the price a little bit to make more profits. Maturity stage Rapid sales growth cannot last forever. At the stage of maturity these is where by the product sales slowdown and reach it highest because competition is high and most organisations fight to maintain their market share by striving to make their product look difference from competitors products. The profit is quite high and the distribution level is high as well. Pricing strategy employed may be competitive pricing. Decline stage At these stage the market is shrinking, sales is falling and competition is falling as well because no firm will like to invest their money in a product that is unprofitable. To make the product profitable, some company may cut down the cost to enable them use a promotional techniques such as special offer of the product to consumers or by repositioning the product to other market segment (i.e. children, adult etc.). If it doesnt yield any profit still these may be the withdrawal of the product from market but if it does more competitors will rise to do something similar. http://www.marketingteacher.com/Lessons/lesson_plc.htm 2/1/2010 Decision of an organisation to embark on either extensive or selective distribution strategy is contingent on some factors. Identify and explain the factors responsible for the choice of a strategy using both industrial and consumer products as examples. Definition of selective distribution Selective distribution: this is where by producer uses few retail outlets in a geographical area to distribute its product (e.g. Televisions, computers and household appliances) to the consumers. The factors that determine the distribution strategy to be use are Market factors Product factors Producer factors Market factors This is where by buyer behaviour determine how product will be distributed to the market; it means would buyer prefer to purchase the product from retailer or through ordering online and in what ways will the buyer get the product information needed before buying (e.g. like motor cars, computers and household appliances). Middlemen willingness to market the product is a factor as well. Retailer may consider the cost involves in training, equipment needed and warehouse expansion that product required. The cost may be too high for them not to be in support to sell the product. Product factors Product like company equipment may be supply direct to customer because of it size while perishable product like meat, fish and bread may be supplier to the consumer through intermediaries such as retailers. Producer factors Manufacturers willingness to control the price that a product will be sold to consumers is a factor. Producers who want to have control over how, to whom and at what price a product is sold dont need a retailer as middlemen to sell its products, because retailer have control over prices of product in their care do to competitors. However, cost involves in distributing products direct to customer is a factor. A producer may not have the resources to recruit, train and equip salesmen. So it may rather make use of middlemen like retailer or agent to distribute it product to consumers. Question 4 Every organisation is striving to compete in a global market where consumers needs are standardised. Explain why companies strive to be global concerns rather than being national heavy weight. Companies strive to be global concerns because they want to widen their customers base by extending their products to other countries to enable them expand their market and gain more customers. They also strive to be global concerns because they want to increase turnover to make the company financially buoyant to manage all its activities effectively, to put smile on the face of shareholders and to encourage other to invest in the company. However, to ensure a very strong brand name is built by making it known to other countries globally just like what Dell, Nike, Sony, LG and Nokia Company as done. These companies have a very strong brand name by providing good quality of product to their customers, they also involves in sponsoring some activities that will advertise their brand name globally and to make them increase their product sales. Companies strive to be global concern rather than to be national heavy weight because they want to advance in technology, face challenges that will make them better than the national companies and to be able to compete globally or make their products to be known. Prepare marketing mix programmes for any consumers product and hospitality services. Compare and contrast the mix elements for the two. Marketing mix: this is the putting together of product, price, promotion and place used to implement marketing strategy. McDonalds uses various channels to build its brand name by providing quality products and targeting their product on workers and children to enable them gets access to their parents or guardians. They improve on product through listening to customers complains and customers needs on products to enable them give consumers a better product or service. Marketing mix programmes for consumers products in an organisation like McDonalds Restaurant. Product Product is anything that is offer to the market. McDonalds have different types of fast food product for their potential and existing customers; they make these products attractive by designing their menu in such a way that indicate what consumer will be having with any product they chose and what each product contain in a very simple way. However, they also know meeting customers requirements is very crucial on product because they can change taste at any time and these make them to check mate their customer preferable product by getting feedback from them and also through profits made on each product they are aware too. They are extremely careful when introducing new product to the market in order not to affect the existing product sales by redesigning packaging or adding extra features. McDonalds sales on product vary according to the stage they are in their product life cycle and the type of marketing undertaking also depend on the stage of a product. They present their product in more attractive way to motivate their customers to buy. http://www.mcdonalds.co.uk/static/pdf/aboutus/education/mcd_marketing.pdf 28/01/2010 Price Price is the amount customers paid for good or service. It play a very vital role in customers (demand) and producer (supply). These enable McDonalds to make their prices of product reasonable to customers in order to increase sales. However, they also determine price for product through looking at how customers will value the product. Medium Big mac  £3.89 Before they actually fix the price of Large and Medium Big mac, they look at how customers and potential customers will value the combination of the product by asking them selves if they would be able to pay  £3.89 for the combination of product. If yes, they can now fix price on that amount. They may cut down their price of product due to competitors as match with the lower prices which mean no extra demand of the product because consumers can get similar or the same product at the same price elsewhere. This will reduces the profit margin and sales. Promotion Promotion this is a way an organisation communicate with potential customers about its product. The purpose is to persuade customers to buy the product by advertising. McDonalds know the important of promotion on their products because there are many competitors in the market with similar product. So to differentiate their products from others they use various ways of advertising to tell the potential customers about the product and price through advertising on TV, radio, online, newspapers and magazines. However, they also use some promotional techniques such as direct mail, sales promotions, exhibitions, point of sales display, special offer etc to keep their customer inform. The aims of these marketing communications may be to increase customers, to visit the restaurant or to recommend the product to a friend. McDonald uses these promotional techniques to communicate to their customers in different ways. For example, if they would like to advertise on TV they collect some information from customers to know the kind of TV programme they watch most often, to enable them know the TV programme to use and it also make them to present the advert in a reasonable way that we call the attention of audience and look interesting to their targeted audience. Place Place is a way by which an organisation distribute its product to users or consumers. McDonalds distribute their product direct to customers by using good location and providing a place to eat the product to make customers feel relax and comfortable. Marketing mix programme for hospitality services at virgin Atlantic Airways Virgin Atlantic airways use marketing mix to strategise on the kind of products and services render to customers in order to satisfy them. Virgin Atlantic marketing mix Physical Evidence People Place Promotion Price Product Product Some products under air line companies are not physical while some are. Virgin Atlantic has different package of products that they do offer to customers in a different ways, they are: Customers destination and arrival airport Type of ticket or seat customer would prefer to buy (i.e. first class, economy and business class) Kind of food customer would prefer to eat when embarking on a journey (i.e. vegetarian food, meat and fish). The entertainment of customers through watching films, video games, radio. All these are Virgin Atlantic airways product that is package to satisfy their customer, l will like to talk about ticket or seat as a product. They have three type of seat or ticket to offer to customers and the different between these tickets depend on the service they render to individual. The more money you paid, the more value services you get. Price Virgin Atlantic airway makes decision on prices of ticket base on how many seats they would like to sell to customers because they are aware of the fact that cutting down prices do increase demand while high prices affect demand. However, they are been fair to their customers in terms of prices by providing a good offer that will make them happy, at the moment the price of New York economy seat is  £299 and first class is  £1,487 which will end 9th February 2010. Promotion Virgin Atlantic airways knows the important of advertising their product to the general public to enable them get more customers, they do these through TV, radio, newspapers, magazines, direct marketing techniques, personal selling and sales promotion. Direct marketing promotion is a techniques use by a business to communicate or update customers directly through email or telephone. Virgin Atlantic airways use these to update customers about their offer or deal of the month in order to increase sales. They also use it to get feedback from customers to know how enjoyable was their last trip and this enable them to improve in their service. Personal selling promotion this is the selling of product or service through face to face or telephone communication with customer or potential customers. Virgin Atlantic airline use personal selling to make customer or potential customer to locate or call their office for any information they may need before buying their product or service. Virgin Atlantic also use advert on Television, Newspapers and Radio to reach the general public about the offers or deals they have for them. Place Virgin Atlantic airways know the important of location for travellers who may miss place their bag during travelling to know where to go for collection or who miss their flight due to traffic delayed or for other reasons to enable them get access to another booking ticket at the airport in a discounted price. People People play a very vital role in rendering service. It also one of the components of extended marketing mix which talks about how employees strive to satisfy customers in term of service. Virgin Atlantic airways know the important of people and recruiting the right staff that will be able to give effective service to their customers. They also make sure their staff treat customers in the way they want to be treated by showing good manners and also to be able to give a good solution to any customers complains or assistance. Process Process is the procedure of how service is being carried out to customer without delay. If customers receive fast service these may make them come back agai