Principles of Marketing

Introduction

This is a report for small companies how sell a range of personalised stationery products there no effective market in the company I am here to help the owner how to contemporary marketing thinking and techniques and will help sales and profits grow even faster.

Here is mine findings

What is marketing?

• Marketing is about meeting the needs and wants of customers;
• Marketing is a business-wide function – it is not something that operates alone fro other business activities;
• Marketing is about understanding customers and finding ways to provide products or services which customers demand.

Marketing definition

The CIM proposes the following definition for marketing:
"Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably."

And AMA the following definition for marketing:

“Marketing is the process of the planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange and satisfy individual and organisation objective.

The Market mix has four 'Ps in the 1960s. Then extended to seven ‘Ps. Depending on whether you are a product or service organisation, there is five or seven 'Ps' for you. The central premise of marketing is that in order to be successful, and effectively satisfy your customers, there are certain marketing fundamentals that you need to address.
The marketing ‘Ps’: some basics for satisfying customers. See below.

1. Physical Evidence: This means that potential customers perceive greater risk when deciding whether to use a service. Unlike a product, a service can't be experienced before it is delivered, which makes it intangible.

2. Process: Once there have set up there consistent. The processes involved in providing a service and the behaviour of people can be crucial to customer satisfaction.

3. Price: If you're up against larger businesses it may be impossible to compete on price, but you could look at how to add value to your product by offering add-on services that you as a smaller business are in a better position to provide; also, try to add value by exceeding expectations. Customers need to find your pricing acceptable; your pricing also needs to give you a profit and be competitive, but being competitive doesn't always mean being the cheapest.

4. People: Whether as part of a supporting service to a product or involved in a total service, people are particularly important because, in the customers' eyes, they are generally inseparable from the total service. Any person coming into contact with customers can have an impact on satisfaction. This means that they must be appropriately trained, well motivated and the right type of person.

5. Promotion: Whether your promotional material is just a single sheet or a more complex brochure, folder or catalogue, it must be appealing and grab the attention of your customers. It must be easy to read, and it must enable the customer to identify why they should buy your product. You will generally need some means of communicating your products to your customers as your business grows.

6. Place: Product must be available at the right time and in the right quantities whilst you maintain the minimum inventories and distribution costs to achieve this. The place where your customers purchase your product and the means of distributing your product to that place must also be appropriate and convenient to the customer and fulfil their needs.

7. Product: This is obvious, but it's amazing how many businesses choose their products first and then try to find a market for them, instead of firstly finding out what customers really need and then developing or sourcing a product to ...

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Reference: from book principles of marketing third edition

Marketing-orientated business

A business that has a marketing orientation sees the needs of customers and consumers as vital. As it develops and markets products to meet those demands, certain structural characteristics become apparent in the business. These are summarised in the table below:

You should expect to see all the above activities well-established in a business that is marketing-orientated

The implications of believing in the marketing concept become clearer when the alternatives are examined:

There are three main alternatives to adopting a marketing orientation. These are:

(1) Sales orientation

(2) Production orientation, and

(3) Product orientation.

These are described briefly below.

Sales orientation

Some businesses see their main problem as selling more of the product or services which they already have available. They may therefore be expected to make full use of selling, pricing, promotion and distribution skills (just like a marketing-orientated business).

Production orientation

A production-orientated business is said to be mainly concerned with making as many units as possible. By concentrating on producing maximum volumes, such a business aims to maximise profitability by exploiting economies of scale.

In a production orientated business, the needs of customers are secondary compared with the need to increase output. Such an approach is probably most effective when a business operates in very high growth markets or where the potential for economies of scale is significant.

Product orientation

This is subtly different from a production orientation. Consider a business that is “obsessed” with its own products – perhaps even arrogant about how good they are. Their products may start out as fully up-to-date and technical leaders.

Competitor analysis and competitive advantage

Marketing-orientated businesses need to do more than just meet customer needs. To succeed and prosper, a business also needs to meet customer needs and wants better than the competition. In other words - the business needs to seek competitive advantage.

A competitive advantage is a clear performance differential over the competition on factors that are important to customers

Competitor actions have a direct effect on the profitability of a business. These may include:

• Price cuts

• Launching a rival product

• Aggressive expansion of production to increase market share

• Inclusion of significant (possibly costly) modifications to a product which other competitors must also undertake

Market segmentation - why segment markets?

There are several important reasons why businesses should attempt to segment their markets carefully. These are summarised below

Enhanced profits for business

Customers have different disposable income. They are, therefore, different in how sensitive they are to price. By segmenting markets, businesses can raise average prices and subsequently enhance profits

Better opportunities for growth

Market segmentation can build sales. For example, customers can be encouraged to "trade-up" after being introduced to a particular product with an introductory, lower-priced product

Target marketing communications

Businesses need to deliver their marketing message to a relevant customer audience. If the target market is too broad, there is a strong risk that (1) the key customers are missed and (2) the cost of communicating to customers becomes too high / unprofitable. By segmenting markets, the target customer can be reached more often and at lower cost

Market segmentation - demographic segmentation

Demographic segmentation consists of dividing the market into groups based on variables such as age, gender family size, income, occupation, education, religion, race and nationality.

As you might expect, demographic segmentation variables are amongst the most popular bases for segmenting customer groups.

This is partly because customer wants are closely linked to variables such as income and age. Also, for practical reasons, there is often much more data available to help with the demographic segmentation process.

Benefit segmentation

Benefit segmentation relates to the process of dividing a market based on the specific benefits consumers seek from a product. For example, some car buyers want safety and security from their car, while others look for comfort or speed. A car manufacturer, therefore, has to decide which benefits to offer - and how these benefits should be communicated to the customer

There are two types of segmentation variables:

(1) Needs

(2) Profilers

The basic criteria for segmenting a market are customer needs. To find the needs of customers in a market, it is necessary to undertake market research.

Profilers are the descriptive, measurable customer characteristics (such as location, age, nationality, gender, income) that can be used to inform a segmentation exercise.

Enhanced profits for business

Better opportunities for growth

Market segmentation can build sales. For example, customers can be encouraged to "trade-up" after being introduced to a particular product with an introductory, lower-priced product

Retain more customers

Customer circumstances change, for example they grow older, form families, change jobs or get promoted, change their buying patterns. By marketing products that appeal to customers at different stages of their life ("life-cycle"), a business can retain customers who might otherwise switch to competing products and brands

Target marketing communications

Gain share of the market segment

Unless a business has a strong or leading share of a market, it is unlikely to be maximising its profitability. Minor brands suffer from lack of scale economies in production and marketing, pressures from distributors and limited space on the shelves. Through careful segmentation and targeting, businesses can often achieve competitive production and marketing costs and become the preferred choice of customers and distributors. In other words, segmentation offers the opportunity for smaller firms to compete with bigger ones

Market targeting

Market targeting is the process of evaluating each market segment and selecting the most attractive segments to enter with a particular product or product line.

Types of Segmentation

In B2B markets segmentation are divided into macro and micro variable or bases.

Macro variable

Includes organisational characteristics, such as size, location and the purchasing patterns, and products or service application defining the ways in which the products or service is used by the buyer.

Micro variable

leads to the definition is some cases of segmentation of one customer and the focus on the buyer management philosophy decision making structures purchasing policies and strategies are well as needs and what.

In the consumer markets there are five main categories of segmentation are defined geographic, demographic, geodemoemographic, psychographics and behaviour bases.

Key responsibilities are Responsible for Marketing?

They can all have an influence on customer satisfaction through their work to a greater or lesser extent, and this is particularly the case in the small business where roles are less clearly delineated and individuals 'multi-task'. There has to be someone who is finally accountable and who co-ordinates everything related to marketing, but the real answer is that everyone in your organisation is responsible. If satisfying customers is at the core of marketing, if it's just your sales person or you.

Repeated errors with invoicing can be enough to make a customer change suppliers even if they are satisfied with the product. It's not just the obvious activities; supporting services can also play an important role in determining customer satisfaction.

Task is involved?

One way to understand the broad scope of marketing is to refer to the seven 'P's (marketing mix). Marketing is both a concept dedicated to meeting customer requirements and a range of techniques which enables the company to determine those requirements and ensure they are met.

Promotion

Promotion means communication with customers. Promotion is persuasion. Its disciplines include corporate identity, branding, advertising, public relations, direct marketing, sales promotion/merchandising, sales/sales management, and exhibitions. The seventh'P' is perhaps the best understood, most broadly based and most visible aspect of marketing. The way in which all these elements are co-coordinated is crucial to the success of the overall marketing strategy.

Positioning

Companies need to decide what position their product or service should have in the market relative to competing products. Positioning involves using marketing techniques to define the product attributes or key selling points in the customer's mind.

Planning

This can then be formulated into a strategic plan for the company so that the marketing objectives can be addressed. Research must be analysed and evaluated and predictions made on the findings. Planning is at the head of marketing.

Product (or service)

Marketing is fundamental to product development and product management. There is little point in developing a product nobody wants to buy. Marketing therefore involves design, concept testing and product launch.

Place

Effective distribution means getting your product into the right places - an essential consideration given the constant changes in retailing and international trade. The movement of goods from point of productions to point of consumption or use is another key aspect of marketing.

Price

What people really feel about a product or service is reflected in what they are prepared to pay for it. Pricing plays a key role in what is known as the ’marketing mix'. It is the only element that generates revenue - all the other elements represent cost.

People

Marketing must involve customer research. The personal, cultural, social and psychological profile of potential customers is of great importance to marketers if their needs are to be successfully met.

The use Market information and research

Once marketing information about your target market, competition and environment is collected and analysed, present it in an organised manner to the decision makers of the business. For example, you may want to report your findings in the market analysis section of your business plan. Also, you may want to familiarise your sales and marketing departments with the data or conduct a company-wide informational training semi using the information. In summary, the resulting data was created to help guide your business decisions, so it needs to be readily accessible to the decision makers.

Conclusion

The way I am concluding this report is marketing is common sense I thing if he follows this plan this his sales will increase.

Reference: from book principles of marketing third edition By Frances Bassington

Class Notes