PRODUCTS – a product that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a need or want. A product is anything that can be marketed: A good (clothes, food), A service (banking, insurance), etc.
A product has three levels these are:
The Core Product
The Actual Product
The Augmented Product
The Core Product is what need the product satisfies e.g. perfume (romance, a gift)
The Actual Product is the final product that is placed on the shelving e.g. computer (Hardware & Software)
The Augmented Product is the elated services that are given along with the product. E.g. free internet, installation, etc.
VALUE - Perceived Value
Perceived Cost
Customer Value
The Perceived Value is how much you think you obtained, which is affected by the customers wants and demand and also by the price and quality of the product.
The Perceived Cost is the price of the product
The Customer Value is the difference between the price value and the price cost. It is also the profit that a customer makes from a transaction.
QUALITY – total Quality Management involves a continuous effort to improve quality, especially by reducing or manipulating in efficiencies.
SATISFACTION – this occurs when the perceived value is equal to the actual product. This is due to the increase of competition and increase in customer expectations. Organisations try to delight customers – to give them more then they expect
EXCHANGE – it is the act of obtaining a desired object for someone, by offering something in return. Marketing occurs when people decide to satisfy needs and ants though exchange.
TRANSACTIONS - trade between two parties. Between this trade they agree on conditions, a time and place of agreement
RELATIONSHIPS – the buyers market needs to create and maintain strong relationships with all of the stakeholders, so in result the product would be a good value for money
A MARKET - A market includes buyers. There are: consumer markets, business-to-business markets, government markets and institutional markets. There are various types of Markets, which all contain their specific characteristics.
The Industrial revolution
The Industrial Revolution began in the 7th half of the 18th century-in England.
A new system of production developed due to it being a series of technology advances that transformed completely the social and economic relations all over Europe.
“The only purpose of production is consumption & therefore it is essential that markets are fond for the company’s products”
New markets of the industrial Revolution were created to have a variety of products and so the importance of marketing grew suddenly.
Marketing Management Philosophies
The Production Philosophy
In the production philosophy instead of concentrating on the needs of the consumer, the firms pay more attention to their production methods, current management experience and its existing raw materials and components; and the current skills of its labour force. This resulted in little choice for consumes and therefore producers could sell whatever they want. This philosophy is useful in two types of situations:
- When the demand of a product exceeds the supply, management should look for ways to increase production and
- When the products costs are too high improved productivity is needed to bring it down.
The production philosophy holds that consumers will favour products that are available and affordable; therefore management should focus on improving production and distribution efficiency.
The Product Concept
A product is anything that is offered to a market for attention, acquisition, use or consumption and that might satisfy any need or want. It includes physical objects, services, persons, places, organisation and ideas.
The product has to be innovative and have a high quality. A new Product Development needs research and development so it will be able to create a new product that customers are interested in buying.
Companies that practice the product philosophy invest highly in research and development.
The Marketing Concept
The Marketing Philosophy holds that achieving organisational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions move effectively and efficiently than do competitors.
The Marketing Concept takes an outside-in perspective. It starts with a well defined market, focuses on customer needs, co-ordinates all the marketing activities affecting customers and makes profits by creating long-term customer relationships based on customer value and satisfaction. Under the marketing concept, companies produce what the consumers want, thereby satisfying customers and making profits.
The Selling Concept
In the selling concept people do not want to spend money on products, they have to be persuaded by promotional and selling campaigns
To have a good promotional and selling campaign then you have to have a good sales team that is motivated to be able to perform well with regular training provided.
“Assume that consumers do not want to spend there money”
The selling concept has to be practiced properly or else it might have a negative consequence due to having customers feeling that they have been cheated on.
The Societal Marketing Concept
The Societal marketing concept holds that the organisation should determine the needs, wants and interests of target markets; it should then deliver superior value to customers in a way that maintains the consumers and the society’s well being.
The societal marketing concept questions whether the pure marketing concept is adequate in age of environmental problems, resource shortages, rapid population growth, world wide economic problems and neglected social services. It asks if the firm senses, serves and satisfies individual wants is always doing what’s best for consumer and society in the long run.
The societal connect is more expensive to implement then the marketing concept but in the long run it turns out to be cheaper then having to face with any fines due to being accused of not caring for the environment. E.g. ‘Coca Cola’ sponsor local boys and girls clubs. ‘The body Shop’ donates a certain amount or profits to animal-rights groups.
The Marketing Process
Target Buyers
A target buyer is the centre of the Marketing Process which has been found out to make allot of research though out the years.
To be successful in today’s marketplace, companies must be customered centered, winning customers from competitors and keeping them by delivering greater value. Before being able to a company must first understand the needs and wants.
There are too many different kinds of consumers with too many different kinds of needs, and some companies are in a better position to serve certain segments of the market. So each company must divide the total market and choose its best segments, and design strategies for profitably serving chosen segments better than its competitors. This process involves: Market Segmentation, Market Targeting and Market Positioning.
Market Segmentation
A market consists of many types of customers, products and needs. So the marketer has to determine which segments offer the best opportunity for achieving company objectives.
Consumers can be grouped and served in various ways based on geographic, demographic, psychographic, and behavioural factors. But the process of dividing a market into distinct groups of buyers on the basis of needs, characteristics, or behaviour who might require separate products or marketing mixes is called Market Segmentation
Market Targeting
Market Targeting is evaluating the market segment’s attractiveness and selecting one or more segments to use. A company should target segments in which it can generate the greatest customer value and sustain it over time.
Most companies enter a new market by serving a single segment, and if this proves successful, they add segments. A large company eventually seeks full market coverage
Market Positioning
Market Positioning is arranging for product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers. Cause of this marketers plan positions that distinguish their products from competing brands and give them the greatest strategic advantage in their target markets.
In positioning a product, a company first has to identify possible competitiveness advantages on which it can build its position.
4 Ps
Product
A Product caries with it features, specifications, appearance, benefits, unique aspects, research and development. Quality control, life cycle, warranties, banding and packaging.
People buy goods and services for a variety of reasons and a wide range of characteristics will influence their decision to buy:
Appearance – it is often the way a product looks is considered to be as important as what it can do.
Function – consumers want to know what the product can do and how well it can do it
Status- consumers often associate products with a particular lifestyle.
The product range and how it is used is a function of the marketing manager. The range may be extended for tactical reasons such as matching competition or catering for seasonal fluctuations. Alternatively a product may be repositioned to make it more acceptable for a new group of consumers as part of a long-term strategic plan.
Price
The Price consists of establishing an exchange value for the product which provides affordability. This could include: short/long tem strategy discounts, allowances, costs, level over time, credit agreements, facilities, flexibility. An organisations’ pricing policy will vary according to time and circumstances.
Promotion
Promotion includes informing the customer about the product and providing awareness. This involves: personal selling, sales force, sales analysis, advertising, mass media, advertising agencies, sales promotion, public elations, corporate image, merchandising and direct marketing. Though, an increase in promotional activity is often a sign of a response to a problem such as competitive activity, it enables an organisation to develop and build up a succession of messages and can thus be extremely cost-effective.
Place
Place involves how and where the product reaches the market and provides availability. This includes: channel of distribution, retailing, wholesaling, agents, franchising, warehousing, transportation and market exposure.
Each of the 4ps contributes to the marketing, mix as a whole. They should be considered together. Alone they are not effective. When defining the marketing mix we can say that it is a set of controllable tactical marketing tools that a firm blend together to produce the response it wants in target markets. The marketing mix consists of everything that a firm can do to influence that demand for its products.
Marketing Management Functions
Marketing Analysis
In marketing analysis a company must analyze its markets and marketing environment to find attractive opportunities and to avoid environmental threats. It must analyze company strengths and weaknesses, and also the current and possible marketing actions, to determine which opportunities it can best pursue. Marketing analysis provides input to each of the other marketing management functions.
Marketing Planning
Due to strategic planning, the company decides what it wants to do with each business unit. Marketing planning involves deciding on marketing strategies that will help the company attain its overall strategic objectives.
In the marketing plan it first begins with an executive summary, which is quickly overviews the major assessments, goals and recommendations. The main sections that are found in a marketing plan present a detailed analysis of the current marketing situation, as well as potential threats and opportunities. It next states major objectives for the band and outlines the specifics of a marketing strategy or achieving them. A marketing strategy is the marketing logic by which the company hopes to achieve its marketing objectives. It consists of specific strategies for target markets, positioning, the market mix, and marketing expenditure levels. The planner explains how each strategy responds to the threats, opportunities, and critical issues. Additional sections of the marketing plan lay out an action program for implementing the marketing strategy, along with the details of a supporting marketing budget. Whilst as the last section outlines the controls that will be used to monitor progress and take corrective action.
Marketing Implementation
Implementation deals with the day-to-day running of the plan. The speed and ease with which the plan is implemented would be affected by the following:
Workers
Work Culture
Action Plan
Reward system
Action plan – if the action plan is carefully worked out and realistic, then implementation of the plan should not be different.
The company’s formal organisation structure – ideally the less formal the organisational structure is the quicker the implementation. However when an organisation becomes large more formality has to be introduced in the structure
The company’s reward system – motivated workers work harder with a reward system scheme.
The company’s personnel – a plan that is only as good as the workers who carry it out.
The company culture – if the plan goes against the company culture the implementation would be slow.
Marketing Control
Marketing control is the process of measuring and evaluating the results of marketing strategies and pans, and also taking corrective action to ensure that marketing objectives are achieved.
Marketing control should be n on-going process with:
- Set Goals
- Measure Performance
- Evaluate Performance
- Take correction action if necessary
A few types of controls are:
Operational controls – it is an on-going process by re-checking internal data frequently. It makes sure that the company achieves the sales, profits, and other goals set out in its annual plan.
Strategic controls – it checks if the company’s basic strategies are well matched to its opportunities.
Marketing audit – it is a comprehensive, systematic, independent, and periodic examination of a company’s environment, objectives, strategies, and activities to determine problem areas and opportunities and to recommend a plan of action to improve the company’s marketing performance
The Global Marketing Environment
The Global Marketing Environment is the forces inside and outside an organisation that affect the ability of marketing management to develop and maintain successful transactions with its target customers.
It is generally uncontrollable forces outside the firm in the macro-environment that poses the most important sources of opportunities and threats of the company.
Kotler divides the general marketing environment into two distinct categories, which he terms the micro and macro-environments. Using the classifications, the micro-environment consists of people and organisations in the company’s immediate environment that affects within the company itself. Kotler reserves the term macro-environment to denote other external forces such as demographic, economic, political, technological and socio-cultural forces.
Micro- Environment
The micro environment maybe defined as the forces close to the company that affect its ability to serve its customers – the company, market channel firms, customer markets, competitors and publics.
It refers to the motivation and training of all staff in order to faster teamwork and provides customer satisfaction. The process by which all marketing and non-marketing personnel understand and recognise the values of the marketing system and their place in it.
Activities in the micro-environment include motivating staff, including incentive schemes and competition, recruitment and retention of appropriate personnel, implementing favourable conditions of service and treatment of employees, instituting staff training programs, explaining and discuss co-operation policies and practices, fastering teamwork, improving communication between employees, researching understanding and satisfying staff requirements in the sort and long term.
The Macro-Environment
The Macro-environment includes all the external factors which cannot be controlled by the firm or organisation but by nature alone.
It is essential that an organisation is very well informed of this environment and its control of it. A study of this environment is done to determine the opportunities and threats.
It is very important for the market oriented organisation to achieve a good understanding of this environment in order to be in a better position to adapt itself and changes which might occur in this environment.
Macro-environment is divided into these factors mainly the PEST factors which are:
Political and legal framework
Economic framework
Social / cultural framework
Technological development
“P” political and legal framework includes – the central/local government pressure groups, financing and government grants, legislation, consumer protection, staturity legislation and all other forces influencing the legal and political stability of a country which will in turn affect the organisation.
“E” the economic framework including all the stages in the business life cycle, rate of inflation, rate of unemployment, interest rates, and resources country has available and level of incomes in the economy.
“S” socio cultural framework including demographic and geographic trends status background, norms and value, lifestyles, habits, socio economic group, pier groups, religion and language.
“T” technological environment including innovation and its desirable affects, more leisure time and better living standards and higher rat of production innovation also has undesirable effects – unemployment, health hazards, and pollution
Major Challenges Nowadays
Nowadays companies are struggling with changing customer values and orientations, a shabby world economy, the growth of a non-profit marketing;
The information technology boom (Internet)
Rapid globalisation (global competition)
Greater ethical & social responsibility
A host of other economic, political and social challenges.
Bibliography
Integrated Marketing communications – Tony Yeshin
Marketing an Introduction – G. Armstong & P. Kotler
Business a Student’s Guide – Evans
Marketing Made Simple – G. Lancaster & P. Reynolds
Marketing: a case study approach – David Stokes
Principles of Marketing – Kotler & Armstrong
By: Kirsten Ann Demicoli Marketing